Report October 2019

During the month of October, Inversion Columbus rose by +1.74%, whilst the STOXX 600, MSCI Mid Cap and the IBEX 35 increased by +0.92%, +1.77% and +0.14% respectively. Year to date performance is +17.35%. Returns are +30.57% and +77.22% at 5Y and 7Y, respectively, and, since the genesis of Columbus in July 2008, the fund has risen by 104.98%, far exceeding that of the European equity indexes. The volatility of the portfolio remains at 11.7%, which is much lower than the average of recent years and similar to the volatility of the STOXX 600.

October has been a month of recovery in the markets. Business results which are being reported now, are better than expected, and have served to strengthen global stock markets. We have had a new cut in interest rates by the Federal Reserve in the US that seems to indicate that it may be the last for some time. The elections in the United Kingdom also reduce the possibility 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 the second part of 2020, with economies in the developed world avoiding contractions.

We continue to be sectorially positioned in consumer and service companies and with reduced positions in banks, cyclical sectors and natural resources as well as oil companies that have greater exposure to the economic cycle. The portfolio currently has very attractive average valuations. Most of the portfolio has cheap valuations with PERs and EV/ EBITDAS in single digits while our forecast for future years are strong sales growth and earnings. We continue to have confidence in our portfolio, which is diversified in companies with high capital returns and cash generation, with strong growth in both sales and EBITDA for the coming years at discounted prices.

As for the portfolio, during October, Columbus rose 1.74% and in the year is up by 17.35% . We have seen a pivot towards more cyclical sectors. Avast, the Czech antivirus software company, listed on the London Stock Exchange, rose 17.1% in the month and Anima, the Italian asset manager, stands out with a rise of 16.7%. Among the stocks ​​that underperformed, AKKA, the French engineering company, fell -7.5% . We have taken the opportunity to increase our position in Akka. This month, we have also taken positions in the German company Software AG, which is priced at a significant discount against the sector, and in Talgo, a Spanish company which specialises in the manufacturer and maintenance of railway equipment. We expect strong growth 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.