Claremont Global Fund (Hedged)

The Claremont Global Fund is a long-only equity fund accessing markets outside of Australia.

We aim to generate absolute returns of 8-12% over a 5–7-year investment cycle. We would also expect to outperform our benchmark over this period after fees.

Ours is a fundamental, bottom-up approach to investing. We invest without reference to the composition of any index.

Our philosophy is to own a concentrated portfolio of 10-15 high-quality, value-creating businesses at material discounts to their intrinsic value

The Claremont Global strategy was established in 2011 and has established a consistent track record of outperformance over the last decade. 

Our investment philosophy is conservative and straightforward, and based on four clear and demanding criteria:

Business quality – We look to own businesses whose intrinsic value is rising over time. This is achieved by earnings growth and returns on invested capital well above their cost of capital on a sustainable basis and where the risk of erosion of these returns is regarded as low.

Balance sheet quality – We want businesses with low levels of financial risk. Typically this means net debt to EBITDA of below 2.5x, high-interest cover ratios, and moderate levels of pension and other off-balance sheet liabilities.

Management quality – We look for management that allocates capital to the benefit of shareholders. This means an emphasis on small, accretive acquisitions over large deals where value destruction is common. We also favour management that repurchases shares when they are attractively priced and pays consistent dividends.

Attractive valuation – We aim to own businesses that satisfy the above three criteria only when they trade at a meaningful discount to intrinsic value. This margin of safety is integral to our capital preservation approach and also key to achieving our absolute return objective.

The Fund will invest in equity securities listed on financial markets located outside of Australia. The listed securities may be chosen from stocks included in the Benchmark but may also include stocks not included in the Benchmark. The cash holding will rise and fall given the attractiveness of individual stocks based on the Investment Manager’s selection criteria. Cash will generally be held in at-call Australian bank deposits denominated in foreign currencies and converted back to Australian dollars when required.

The Fund investments are subject to the following constraints/restrictions:

• Cash weighting – maximum 10% of the gross asset value of the Fund.
• Single stock weighting – maximum 10% of the gross asset value of the Fund.

The Fund will only invest in Derivatives for currency hedging purposes. Currency hedging is subject to a minimum of 90% of the gross asset value of the Fund. The hedge may not provide complete protection from adverse currency movements.

Short selling of equity securities or equity indexes is not permitted.

Top Five Holdings (31 May 2022)

* Please note the top 5 holding are in alphabetical order.

Claremont Funds Management Pty Ltd is the Investment Manager (ACN 649 280 142, ABN 38 649 280 142, CAR No. 001289207) for the Claremont Global Fund (ARSN 166 708 792) and Claremont Global Fund (Hedged) (ARSN 166 708 407), which are together referred to as the ‘Funds’. Equity Trustees Limited (ACN 004 031 298, AFSL 240957) (“Equity Trustees”) is the Responsible Entity of the Funds. For further information on the Funds please refer to each Fund’s PDS and Target Market Determination which is available at www.claremontglobal.com.au. A Target Market Determination is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.

The information may contain general advice. Any general advice provided has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice with regard to your objectives, financial situation and needs. Past performance is not a reliable indicator of future performance. The Investment Manager and the Responsible Entity (Parties) give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this report. The Parties do not accept, except to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained.