Report November 2019

During the month of November, Inversion Columbus rose by 4.47% whilst the STOXX 600, MSCI Mid Cap and the IBEX 35 grew by 2.69%, 3.65% and 1.02% respectively. Year to date, performance is 21.95%. At three and seven years, profitability is 26.43% and 82.46%, respectively, and since the genesis of Columbus, in July 2008, the Fund has risen by 114.14%, far exceeding the European equity indexes. The volatility of the portfolio remains at 11.7% much lower than the average of recent years and similar to the volatility of the STOXX 600.

November has continued to be a month of recovery in stock markets. Companies’ results published so far continue to be moderately better than expected and have served to strengthen global equity markets. The elections in the United Kingdom also reduce the likelihood of a no-deal Brexit. We are still expecting an economic slowdown next year and although we do not rule out a recession in the next twelve months, we do not envision it. Our expectation is that the drop in rates in both the US and Europe will have an effect and economic growth will begin to accelerate again in H2 2020, with economies in the developed world steering clear of contractions. In the US, growth, consumption and unemployment data continue in a positive direction. In Europe, economic weakness continues to be the norm, but the slight growth of GDP in Germany was a positive surprise.

We have kept our overweight positions in consumer and service companies and have reduced positions in the banking, cyclical and natural resource sectors as well as in oil companies given their greater exposure to the economic cycle. The portfolio currently has cheap valuations, PERs and EV / EBITDAS. Nevertheless the overall portfolio has strong sales growth and EBITDAs for the coming years. We continue to have faith in our portfolio due to it being diversified in companies with high capital returns and cash generation.

As for the portfolio, in November, Columbus rose by 4.47% and in the year is up by 21.95%. Cyclical companies and out of favour sectors have continued to rally. During the month, Anima, the independent Italian asset manager, rose income by 18%, which surprised the market. The increase in income was a result of new assets under management and higher commissions. Also in Italy, Reply, the digital services company, performed strongly in the month (+18%). It published better-than-expected results with revenue increases of 15% and EBITDA of 35% over last year’s results. We are confident that this growth will continue in the coming years given its leadership in digital innovation and artificial intelligence. We have also continued to increase positions in the German company Software AG, which has significant valuation discounts against other companies in the sector and in Talgo, the Spanish company that manufactures and maintains railway equipment. We expect strong growth in both industries in the coming years.

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Since June 14, 2018, the Master-Feeder structure between Inversion Columbus 75 Sicav (feeder) and the compartment in Luxembourg, Pareturn GVC Gaesco Columbus European Midcap Equity Fund (Master), has been operational. This structure allows domestic and foreign investors to access Columbus’s strategy from a vehicle established in Luxembourg, with two types of shares according to investment volume.

The creation of this structure does not carry any type of fiscal contingency for current investors. The compartment is available on the AllFunds, Inversis and MFEX fund platforms.