Report September 2019

During the month of September, Inversion Columbus increased by 2.21% compared to 3.60% of the STOXX 600, 3.49% of the MSCI Mid Cap and 4.90% of the IBEX 35.

Year to date performance is 16.24%. At 5Y and 7Y return are 28.44% and 77.47% respectively and since the start of Columbus’s, in July 2008, performance is 101.67% by 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.

September has been a month of recovery in the markets, after the volatility of the previous month. Economic uncertainties continue to weigh on global exchanges. Macroeconomic data shows weakness in the industrial production of Germany and China, while the situation in the United Kingdom remains unclear as to what type of Brexit will occur. However, macroeconomic data in the US is mixed, with consumption and inflation data at the top of expectations.

Futures markets discount that the Federal Reserve will continue to reduce interest rates until the end of 2020. We are still expecting for an economic slowdown next year and although, we do not rule out a recession in the next twelve months, we do not expect it. Our expectation is that the declines in rates both in the US and in 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, cyclicals and natural resources as well as oil companies that have greater exposure to the economic cycle.

The portfolio currently has very attractive average valuations, with PERs and EV / EBITDAS of one digit that nevertheless have sales growth and EBITDAS of two digits for the coming years. We continue to rely on 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 the month, Columbus has risen 2.11% and year to date 14.85% as we have already pointed out. During September Interpump, the Italian water pump company rose 11.2% in the month and the French service company Spie also rose 11.3%. Our exposure to the industrial sector and cars has been reduced from the beginning of the year from 25% to 12.75%, given our most cautious position on the economic cycle. We have also increased cash to 9%.

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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.