MAB Quarterly Review Q1 2025 - Growth - Flipbook - Page 13
Facts behind the fund
The manager adopts what is known as a value-oriented investment style, focusing on the cheapest segments
of the European equity market, seeking to identify companies where short-term market overreaction, panic or
fear provides an opportunity to acquire the shares of companies at a price that doesn’t re昀氀ect the estimated
long-term worth of those companies once the temporary period of stress passes.
The process initially involves running proprietary screens on approximately 500 European companies, ranking
these companies on a variety of 昀椀nancial metrics. They then focus on the cheapest 20% of ranked companies,
undertaking approximately one week of research projects to understand why the stocks are currently unloved
and how those businesses are likely to evolve over time. Approximately 80% of this group of optically “cheap”
companies
eliminated
at this stage.
Forarethose
that survive,
a more detailed and lengthy research project is undertaken to
understand how the businesses could evolve under different scenarios, stress testing for
risksa which
could cause
them toresearch
lose money
owning
the shares.
We like thishow the
For thosedownside
that survive,
more detailed
and lengthy
project
is undertaken
to understand
enduring
focus
upon
downside
risks
and
how
the
manager
only
selects
those
companies
businesses could evolve under different scenarios, stress testing for downside risks which could with
cause them
the most
attractive
of risk
upside.
also
like how risks
the manager
to lose money
owning
the balance
shares. We
likeand
thispotential
enduring
focus We
upon
downside
and howutilises
the manager
the those
detailed
inputs from
thethe
100+
global
industry
models
been builtupside.
and maintained
only selects
companies
with
most
attractive
balance
of that
risk have
and potential
We also like how
by
ARGA’s
specialist
global
industry
analysts,
helping
them
understand
how
the
wider
the manager utilises the detailed inputs from the 100+ global industry models that have been
built and
dynamics of each industry will likely impact each individual company in that industry going
maintained by ARGA’s specialist global industry analysts, helping them understand how the wider dynamics
forward.
of each industry will likely impact each individual company in that industry going forward.
The 3-person Portfolio Construction Team utilise these inputs to put together a portfolio of
The 3-person
Portfolio 35-50
Construction
Teamblending
utilise these
inputs
put together
portfolio
of approximately
approximately
companies,
a desire
for atoportfolio
with thea most
attractive
risk35-50 companies,
blending
a
desire
for
a
portfolio
with
the
most
attractive
risk-reward
with
an endeavour
reward with an endeavour to ensure the portfolio is sufficiently diversified across different
to ensurepotential
the portfolio
diversi昀椀ed
differenttopotential
areas
of risk.
Unless
areasisofsuf昀椀ciently
risk. Unless
there areacross
any changes
the original
thesis,
stocks
arethere
then are any
changes held
to the
original
thesis, stocks
untiland
the prices
temporary
of stress
passes
and prices
until
the temporary
periodare
of then
stressheld
passes
moveperiod
upwards
to a point
where
move upwards
tomore
a point
where they
are on
more
reasonably
valued
on their
risk-reward
screens.
The manager
they are
reasonably
valued
their
risk-reward
screens.
The manager
is very
disciplined
is very disciplined
atthis
selling
this point,
when the
potential upside-downside
no favour,
longer rotating
in their favour,
at selling at
pointatwhen
the potential
upside-downside
is no longer in is
their
that capital
capital into
rotating that
into other
othernew
newholdings
holdingswhere
wherethe
therisk-reward
risk-rewardisismore
moreattractive.
attractive.
The return
resulting
return
profile
of this
strategy
is verynot
attractive,
not only exceeding
significantlymarket
exceeding
The resulting
pro昀椀le
of this
strategy
is very
attractive,
only signi昀椀cantly
comparators
market
comparators
over
time
but
also
doing
so
in
a
pattern
that
is
highly
differentiated
to
over time but also doing so in a pattern that is highly differentiated to our funds’ existing Europeanour
managers.
funds’ existing European managers.
The returns of the strategy since the launch of their UCITS fund are below:
The returns of the strategy since the launch of their UCITS fund are below:
ARGA European Equity Fund:
Performance Since Inception
160%
Commente
reflect perf
ARGA Europe,
154%
140%
Commente
footnote, a
stated in G
120%
MSCI Europe exUK, 104%
100%
80%
60%
40%
20%
0%
-20%
-40%
01/2019
01/2020
01/2021
01/2022
01/2023
01/2024
01/2025
Source: Refinitiv DataStream / YOU Analysis
Note: Daily Returns are reported for the ARGA European Fund (EUR share class), converted to GBP.
Pg 12
