Commentary.
After renting an apartment since moving to the Netherlands in 2019, last month I decided to start the purchase process of a house. After an initial negotiation with the parties involved, the downpayment requirements ended up being significantly higher than originally anticipated, meaning that I was faced with the decision to either (a) back from the deal and look for a new property or (b) continue with the process and drastically reduce the overall NAV of the portfolio to meet the cash needs.
I must admit it was a tough decision, but after thinking about it carefully and consulting it with family and a few friends, I made the decision to go for it. As it is usual in life, plans never go as expected and the offer we presented (an attractive one, I must add) was rejected. Nevertheless, most of the liquidity has been kept outside the market as the search process continues.
As a result, the current NAV of the portfolio is roughly a fifth of the value it had at the beginning of the month. I therefore decided that it was best to concentrate into the six to eight highest conviction holdings, namely ASML, Auto Partner, Brookfield, Evolution, Mader and Water Intelligence.
Performance.
Notes:
Performance is measured following the money-weighed return (MWR) methodology.
Unless otherwise indicated, performance values are expressed in EUR terms.
The market quotation of the portfolio decreased by 2.1% in September, leaving the year-to-date performance at 30.1%.
This compares to a decrease of 1.9% (5.2% at constant currency) for the S&P500 non-financials (SPXN) last month and a return of 17.2% since the start of the year.
ITD:
Since inception in January 2022, the total return has been 21.4% or an annualised rate of 11.7%.
This compares to a 3.1% for the SPXN over the same period or 1.8% in annualised terms.
Contributors.
The following table shows the top contributors and detractors to market performance on a weighted basis and converted to EUR during different time frames: last month, year to date (YTD) and inception to date (ITD):
The waterfall charts below are included for a more detailed breakdown of the individual contribution of each holding:
Activity.
As mentioned in the Commentary section, the portfolio’s NAV was reduced by circa 80.0% last month. Aside from the six remaining holdings, all other positions were exited in full.
Further, the six remaining positions were also substantially reduced (with the exception of ASML):
Auto Partner: reduced by 80.0%.
Brookfield: reduced by 54.5%.
Evolution: reduced by 57.5%.
Mader: reduced by 53.8%.
Water Intelligence: reduced by 50.0%,