Letter to our co-investors 2Q21

Letter to our co-investors 2Q21

5 August of 2021 

Dear co-investor,

In the second quarter, the positive performance that started in November 2020, with the announcement of the launch of coronavirus vaccines, continued. In this “new” environment, value investing has performed well, proving that patience and short-term losses are often essential ingredients for reaping the rewards over the long term. Our funds, of course, attest to this. Horos Value Internacional gained 6.3% over the quarter, compared to 6.4% in its benchmark index, while Horos Value Iberia returned 4.8%, beating the 4.2% rise of its benchmark. Since inception of the Horos funds (May 21, 2018), Horos Value Internacional has returned 13.1% and Horos Value Iberia 3.2%. Since 2012, the international portfolio has gained 177%, while the Iberian portfolio 160%, compared to gains of 200% and 66% in their benchmark indices, respectively.

As we have just pointed out, value investing often goes through periods, of varying lengths, when it seems to stop working. We do not have to go very far to find one of these moments. However, this underperformance is needed for us to be able to obtain attractive returns in the years ahead. Although it may sound paradoxical or inconsistent, it will often be necessary to lose in order to be able to (aspire to) gain more, taking advantage of what is known as intertemporal arbitrage. Given the relevance of this idea, we will devote this quarterly letter to explaining what it consists of and how we can make the most of it.

Thank you for your confidence.

Yours sincerely,

ı———ı
Javier Ruiz, CFA
Chief Investment Officer
Horos Asset Management

Additionally, you can access june factsheets for Horos Value Iberia, Horos Value Internacional and Horos Internacional PP, where you can see more in detail our top 10 positions for each fund.


Letter to our co-investors 1Q21

Letter to our co-investors 1Q21

20 April of 2021

Dear co-investor,

In the first quarter, the trend that began with the announcement of the successful launch of the COVID-19 vaccines in November 2020 continued, characterized by the outperformance of companies with more cyclical businesses, as well as those of smaller size and less liquidity. In this “new” market environment, our funds have had an excellent performance, getting close to or even exceeding their all-time highs. Horos Value Internacional gained 21.5% over the quarter, compared to 8.9% in its benchmark index. In the same period, Horos Value Iberia returned 13.0%, beating the 5.4% rise of its benchmark. Since inception of the Horos funds (May 21, 2018), Horos Value Internacional has returned 6.4%, while Horos Value Iberia -1.6%. Since 2012, the international portfolio has gained 160% and the Iberian portfolio 146%, compared to 182% and 59% in its benchmark indices, respectively.

On the other hand, next May Horos will celebrate its third anniversary, and we can certainly not say that it has been a bed of roses for those of us who are part of this family. In these years we have lived through a period of great political and economic uncertainty (Trump, China, brexit…), in addition to the worst pandemic that humanity has suffered in the last century. A period that, as we have explained throughout our communications, has severely hindered our investment philosophy, with the specialized press announcing the death of value investing. To navigate these turbulent waters, it has taken a lot of patience, calmness and conviction in our work. Personally, the Stoic philosophy, to which I regularly refer, has been a great compass to guide me. I will devote part of this quarterly letter to describing some of its (surprising?) similarities with the value investing philosophy.

Thank you for your confidence.

Yours sincerely,

ı———ı
Javier Ruiz, CFA
Chief Investment Officer
Horos Asset Management

Additionally, you can access march factsheets for Horos Value Iberia, Horos Value Internacional and Horos Internacional PP, where you can see more in detail our top 10 positions for each fund.