Letter to our co-investors 1Q24

Letter to our co-investors 1Q24

24 May of 2024

Dear co-investor,

The start of 2024 has once again been very positive for global equities, continuing the excellent performance already shown in 2023. Our Horos Value Internacional and Horos Value Iberia funds have been part of this trend, posting returns of 5.9% and 1.1%, respectively.
Of course, as we usually emphasize, these results are merely anecdotal, as our goal is to deliver sustainable and satisfactory returns over the long term. Hence, we always share the performance that Alejandro, Miguel and I have achieved in our joint career as a portfolio management team. Specifically, at the time of writing, the cumulative returns in these almost twelve years of track record amount to 287% and 217% or, in other words, 12.0% annualized in the international strategy and 10.5% in the Iberian strategy.These figures compare with 11.7% and 7.75% annualized, respectively, for their benchmarks. As a result of this work, in 2024 we have been nominated again as best fund manager and best group in Iberian equities by the prestigious fund analysis firm Citywire.

I would like to take this opportunity to inform you that this will be the last time we report on the performance of our benchmark indexes. The increase in costs which we would have to assume to continue comparing our performance with that of these indexes was the main reason behind this decision. In addition, this comparison seems secondary to us given our very active management style (separate from the indexes). Precisely, I would like to devote this quarterly letter to discuss the rise of index investing in recent years and, in particular, its impact on the stock markets and on the active management of mutual funds.

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.


Letter to our co-investors 4Q23

Letter to our co-investors 4Q23

13 February of 2024

Dear co-investor,

First of all, I would like to take this opportunity to wish you all the best for the new year. We concluded 2023 with two reasons for celebration. On the one hand, our investment funds closed the year at record highs. This means that, in the more than eleven years that Alejandro, Miguel and I have been part of the portfolio management team, we have delivered cumulative returns of 254% in the international strategy (11.5% annualized) and 203% in the Iberian strategy (10.3%), outperforming their benchmark indexes in both cases.On the other hand, the Horos family of products continues to grow, with the launch of Horos Internacional Empleo PPE and, foreseeably in a short period of time, Horos Internacional Autónomos PPES, two pensions plans that will provide a long-term savings solution for employees and self-employed workers, respectively, replicating our successful international strategy.

Taking a shorter-term view, in 2023 our funds were up 14.3% for Horos Value Internacional (versus 18.1% of its benchmark) and 15.7% for Horos Value Iberia (versus 24.5%). Undoubtedly, as we will see throughout this document, this has been a very atypical year, in which various factors (some of them unsustainable) have dramatically pushed global financial assets higher. For our part, we continue to invest true to our philosophy, always trying to find and exploit those inefficiencies that arise in the market in the most advantageous way possible, in order to meet our goal of generating sustainable and satisfactory returns over the long term.

Thank you for your confidence.

Yours sincerely,

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

Additionally, you can access december 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 3Q23

Letter to our co-investors 3Q23

23 October of 2023

Dear co-investor,

This quarter, the management team formed by Alejandro, Miguel and myself is celebrating eleven years working in the complex and fascinating world of investing. A period in which we have remained faithful to the same investment principles and in which we have always managed two strategies: international and Iberian equities. In these eleven years we have delivered cumulative returns of 236% in the international strategy (11.3% annualized) and 185% in the Iberian strategy (10.0%), outperforming their benchmark indices in both cases. These returns are very satisfactory and we will undoubtedly work to maintain this positive trend in the coming years. Of course, the current high upside potential of our funds leads us to believe that we can achieve this.

Taking a shorter-term view, our funds are up 8.7% in 2023 for Horos Value Internacional (versus 10.9% of its benchmark index) and 9.0% for Horos Value Iberia (versus 16.2%). However, these returns do not reflect a number of very important anomalies that are occurring and which make us cautious about the market and, paradoxically, optimistic about our portfolios for the future. I will devote this quarterly letter to explaining this and the main movements of our funds.

Thank you for your confidence.

Yours sincerely,

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

Additionally, you can access september 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 2Q23

Letter to our co-investors 2Q23

7 August of 2023

Dear co-investor,

These are good times for Horos because, at this moment, almost all of our more than 3,000 clients have positive returns with their investments in our funds and pension plan. A milestone that shows that our investment process continues to bear fruit, as is also reflected in the 236% and 185% total returns that this management team has delivered since 2012, or in annualized terms, 11.5% in the international strategy and 10.2% in the Iberian strategy, outperforming their benchmark indexes in both cases. However, our satisfaction is even greater given that the upside potential of our portfolios remain at historically very high levels. In other words, if our analysis has been correct, the returns we can expect as investors in our vehicles in the coming years will also be very attractive.

The year 2023 is being characterized by a generalized rise in global equity markets. In this favorable environment, our funds have also performed well, up 8.5% in the case of Horos Value Internacional (versus 11.5% of its benchmark index) and 8.9% for Horos Value Iberia (versus 15.8%) in the first six months of the year. However, these gains in 2023 are particularly strong for the NASDAQ-100 technology index, with a return of around 45% and, more worryingly, driven by a very significant multiple expansion. We believe that these higher valuations are being caused, to a large extent, by the expectations that the investment community has placed on the future deployment of artificial intelligence. We will therefore devote this letter to explaining what is happening and what risks we see ahead for the sector and this market

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 1Q23

Letter to our co-investors 1Q23

9 May of 2023

Dear co-investor,

New year, new turmoil? The major stock markets of the world ended the first quarter of the year with solid gains, but overshadowed by a banking crisis not seen since 2008. Against this volatile backdrop, our Horos Value Internacional fund gained 6.0% in the first three months of the year, compared to a 5.4% rise in its benchmark index. Horos Value Iberia was up 6.1% over the period, compared to a 10.8% rise of its benchmark.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 34.0%, underperforming the 47.1% gain of its benchmark index, while Horos Value Iberia has returned 10.9%, slightly below the 13.4% return of its index. Moreover, since 2012, the returns achieved by this management team stand at 228% for the international strategy and 177% for the Iberian strategy, compared to 203% and 90% in their benchmark indices, respectively.

Despite these year-to-date gains, a turbulent March saw the abrupt fall of several U.S. banks, such as Silicon Valley Bank, and the most notable collapse of Credit Suisse in Europe. Are the central banks’ rate hikes the cause of this banking crisis? Are the cases of U.S. regional banks so different from what happened with Credit Suisse? Are there other underlying structural problems that explain these recurring crises in the sector? We will devote most of this first quarterly letter of 2023 to try to answer these questions and explain our approach to the financial sector.

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.


Letter to our co-investors 4Q22

Letter to our co-investors 4Q22

26 January of 2023

Dear co-investor,

The fourth quarter of the year was a relief for most markets, reducing part of the significant losses accumulated over the previous nine months. Our portfolios were not immune to this positive change. Horos Value Internacional fund gained 13.7% in the last three months of the year, bringing the 2022 return to 4.9%, compared to a 0.8% gain of its benchmark in the quarter and a decline of -13.0% over the calendar year. Horos Value Iberia, on the other hand, was up 12.1% over the quarter, for a return of -5.2% in 2022, compared to a gain of 11.9% in its benchmark over the quarter and a rise of 2.0% for the year.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 26.5%, below the 39.6% gain of its benchmark, while Horos Value Iberia has returned 4.5%, outperforming the 2.4% return of its index. Moreover, since 2012, the returns of this management team stand at 209% for the international strategy and 162% for the Iberian strategy, compared to 188% and 72% of their benchmark indices, respectively.

Despite the last quarter’s bounce, many indices closed the year with sharp declines. Although many causes may be behind this setback, we are convinced that the tightening of central banks’ monetary policies played a key role. In this letter, I would like to highlight the role that interest rates have played in the evolution of the markets, before and after their major shift to the upside. I will also update on the positive outlook of our portfolios.

As always, we thank you for your confidence and wish you all the best for this new year.

Yours sincerely,

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

Additionally, you can access september 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 3Q22

Letter to our co-investors 3Q22

10 November of 2022

Dear co-investor,

During the third quarter of the year, the challenges that many economies are experiencing in reconciling a tight monetary policy with a recessionary economic environment were confirmed. This conflict has impacted financial markets, leading to significant volatility and declines. Our portfolios were not immune to these movements. Our Horos Value Internacional fund fell -7.1% over the quarter (-7.7% YTD), compared to a -0.6% decline of its benchmark. Horos Value Iberia, on the other hand, was down by -12.9% over the period (-15.4% YTD), compared to -9.1% in its benchmark index.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 11.3%, below the 38.5% gain of its benchmark, while Horos Value Iberia has returned -6.7%, outperforming the -8.6% return of its index. Moreover, since 2012, the returns of this management team stand at 172% for the international strategy and 133% for the Iberian strategy, compared to 186% and 54% of their benchmark indices, respectively.

In addition to the sources of uncertainty mentioned above, there are also those that were already present (the Chinese economy, the Russian invasion of Ukraine and inflation). However, it is in these times of anxiety and market turbulence that the greatest investment opportunities are created. I am not just saying that. In the ten professional years that this management team has just completed (fifteen years in my case), we have also experienced very complex situations. This letter serves as a reminder of what we have faced all these years, our evolution as investors and why staying true to our investment process always pays off.

Thank you for your confidence.

Yours sincerely,

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

Additionally, you can access september 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 2Q22

Letter to our co-investors 2Q22

8 August of 2022

Dear co-investor,

During the second quarter of the year, the dynamics that we have been discussing in previous quarterly letters have not changed. The damaging effects of the energy transition (exacerbated by the Russian invasion of Ukraine), the Chinese economic crisis and high inflation (with its consequent tightening of monetary policies) have continued. This cocktail has led the world’s major stock markets, as well as fixed-income assets, to record one of the worst first half-years in their history. Despite this, our portfolios have continued to weather this difficult environment. Our Horos Value Internacional fund fell -2.0% over the quarter, compared to a -10.2% decline of its benchmark. Horos Value Iberia, on the other hand, was down by -1.0% over the period, compared to -1.1% in its benchmark index.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 19.8%, below the 39.3% gain of its benchmark, while Horos Value Iberia has returned 7.1%, outperforming the 0.6% return of its index. Moreover, since 2012, the returns of this management team stand at 193% for the international strategy and 168% for the Iberian strategy, compared to 187% and 69% of their benchmark indices, respectively.

The sources of uncertainty are many and of significant magnitude. For this reason, it is vital to work with great management teams that can make the most appropriate decisions for their shareholders at all times. We will therefore devote this quarter’s letter to explaining the keys to good capital allocation.

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 1Q22

Letter to our co-investors 1Q22

31 May of 2022

Dear co-investor,

The new year began with three major sources of uncertainty that will condition the rest of this year’s market performance: the economic situation in China, the impact of the Russian invasion of Ukraine and the measures taken by central banks to curb current high inflation rates. Against this challenging backdrop, our Horos Value Internacional fund returned 1.4% over the quarter, compared to -3.3% in its benchmark index. Horos Value Iberia, on the other hand, was down by 1.9% over the period, in contrast to a 0.5% gain of its benchmark.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 22.3%, below the 55.2% gain of its benchmark, while Horos Value Iberia has returned 8.1%, outperforming the 0.5% return of its index. Moreover, since 2012, the returns of this management team stand at 199% for the international strategy and 167% for the Iberian strategy, compared to 219% and 67% in their benchmark indices, respectively.

We will devote this letter to dealing with these three major sources of current uncertainty and, as always, to discussing the most significant changes in our portfolios.

Thank you for your confidence.

Yours sincerely,

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

Additionally, you can access december 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 4Q21

Letter to our co-investors 4Q21

17 February of 2022

Dear co-investor,

The year 2021 was one of the best for managers who practice value investing, mainly due to the strong recovery of companies with cyclical businesses, which had been heavily penalized by the investment community in recent years. In the case of the Horos team, 2021 has possibly been our best year as investment professionals. Evidence of this, although always anecdotal, is that Horos Value Iberia was the top-performing fund of its category, with a return of 26.5% compared to 12.3% in its benchmark index. Horos Value Internacional also posted an outstanding return of 37.6% for the year, beating the 27.5% gains of its benchmark.

As usual, I would like to take this opportunity to update our longer-term performance. Since the inception of Horos (May 21, 2018), Horos Value Internacional has returned 20.6%, below the 60.4% gain of its benchmark, while Horos Value Iberia has returned 10.2%, outperforming the 1.3% gain of its index. Moreover, since 2012, returns stand at 195% for the international strategy and 176% for the Iberian strategy, compared to 230% and 71% in their benchmark indices, respectively.

Despite this strong performance in 2021, the new year presents new challenges and sources of uncertainty for investors to prepare for. Certainly, one of them is the energy crisis that many economies are experiencing. In this letter, I will try to explain why this is happening and how we can protect ourselves against it.

Thank you for your confidence.

Yours sincerely,

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

Additionally, you can access december 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.