Contrarius Global Equity Fund

The Contrarius Global Equity Fund aims to outperform the global equity market by investing in undervalued stocks by employing a contrarian, valuation-based approach, focusing on long-term fundamentals rather than short-term market sentiment.

The experienced investment team conducts in-depth research to identify companies trading below their intrinsic value. By taking a patient, long-term approach, the Fund seeks to generate superior returns for investors.

The Contrarius Global Equity Fund aims to achieve over the long-term higher returns than the average of the world's equity markets, as represented by the MSCI World Index (including reinvested net income), without greater risk of loss.

The Fund aims to achieve its investment objective by employing Contrarius’ valuation-based, contrarian investment philosophy to invest in selected global shares. Shares are selected following detailed proprietary research. The Fund is managed with high conviction and the Fund’s holdings are expected to comprise only those selected shares assessed by Contrarius to offer the highest value from a broad universe of global shares. The Fund does not seek to replicate the benchmark, is actively managed, and its holdings may differ materially from the benchmark in order to achieve its objective.

In implementing the Fund’s investment strategy Contrarius adheres to investment guidelines, as set out in the Fund’s Product Disclosure Statement and accompanying Reference Guide.

The Fund would likely be suitable for investors seeking capital growth over the long-term (more than 5 years) and who seek exposure to an actively managed equity fund that invests in a portfolio of global equities and equity-related securities.

Significant Features and Benefits of the Fund

The following are significant features of the Fund:

• Contrarian investment philosophy: The Fund adopts a contrarian investment approach which remains focused on considering the underlying intrinsic value of a company, irrespective of current market sentiment. Contrarius seeks to buy shares trading below their underlying intrinsic value and which are considered to be attractive relative to other available opportunities. These shares may be out of favour with the market as a result of short-term negative sentiment. Shares are sold when the market recognizes the underlying intrinsic value of the business and the share re-prices. As a result of this contrarian approach, the Fund’s investments may be expected to typically look very different from those of the broad market and those of its peers. It is believed that the patient and consistent application of this contrarian investment approach over the long-term is essential in achieving the Fund’s objective of delivering returns in excess of the market.
• Proprietary fundamental research: The Fund’s holdings are selected using proprietary fundamental investment research that seeks to assess the fair value of equity securities and their relative attractiveness versus other opportunities in the broad market. This in-depth fundamental research includes detailed financial forecasts, assessment of the quality of management, competitive industry dynamics, and relevant Environmental, Social and Governance (“ESG”) factors.
• Benchmark-unaware: The Fund does not seek to replicate the Benchmark. The Fund is actively managed and its holdings may differ materially from the Benchmark in order to achieve its objective. Contrarius will not buy a security simply because it is a constituent of the Benchmark and may own shares that are not included within the Benchmark.
• Investment flexibility: The Fund’s investment guidelines offer considerable flexibility to allow it to be managed with high conviction and comprise only those shares assessed to offer the highest value from a broad universe of global shares. The Fund has no sector, geographic or other market investment targets.

Investing in the Fund offers investors a range of benefits, including:

• Access to a consistent investment approach: Contrarius has more than fifteen years of proven experience in managing global shares, consistently applying its contrarian, long-term, valuation based investment philosophy.
• Access to global investment expertise: Contrarius has investment analysts located at various offices globally, that allows different perspectives to inform Contrarius’ proprietary research effort.
• Access to global investment opportunities: The Fund’s investment strategy, active management and Contrarius’ contrarian investment philosophy means that the Fund’s holdings are likely to be very different from a typical global equity fund. The Fund may therefore offer access to global investment opportunities that may complement an investors existing portfolio.

It is believed that long-term performance is driven by the consistent application of a sound investment philosophy. The key characteristics of our investment philosophy can be summarised as follows:

Valuation based

Contrarius seeks to buy stocks that it believes are trading below their underlying intrinsic value and which are considered to be attractive relative to other available opportunities it has evaluated. The larger the discount at which a company trades to its underlying intrinsic value, the more attractive the share. Contrarius seeks to sell stocks that it believes have reached their underlying intrinsic value or which are less attractive than other opportunities it has evaluated.

While it may be possible to determine whether a share is trading either at a discount or a premium to the company’s underlying value, it is impossible to know when the market will recognise the underlying intrinsic value of a business and re-price the share accordingly. Given our investment philosophy, the timing of both purchases and sales may appear 'early'.

In the case of purchases, the stock price could and often does continue to fall due to short-term negative sentiment and outlook for the business. Provided one’s assessment of intrinsic value was however correct, short-term price declines do not typically represent a permanent loss. The same is true of sales that may be regarded as too ‘early’. Contrarius would rather sell a stock when it reaches fair value despite the short-term positive sentiment and outlook for the business. By selling at fair value, Contrarius is able to avoid the permanent loss that is likely to result from continuing to hold a stock that ultimately corrects to fair value. At the same time the sale of the stock at fair value creates the opportunity for the Fund to establish new positions in stocks that it believes are trading at a discount to fair value.

It is believed that the consistent application of this approach is essential in achieving our objective of creating long-term wealth for our clients.

Contrarian

Given the wide-ranging interpretations of ‘value investing’, our investment philosophy is probably best described as ‘contrarian’. ‘Value investing’ is often focused on finding cheap shares characterized only by low price to earnings or price to book ratios. As a result, ‘value’ investors often shun high quality shares with above average long-term growth prospects in favour of companies with below average long-term growth prospects, simply because the latter trade on low multiples and therefore appear cheap. However, in many instances the reason these shares are trading at depressed multiples is not because their prices are depressed but because their earnings have experienced a period of above average growth and are at a cyclical high.

A contrarian approach, while always considering the underlying intrinsic value of a company, is nevertheless mindful of the earnings cycle and careful to avoid companies that appear “cheap” but which carry substantial earnings and therefore price risk. Given this contrarian approach, it is expected that our selection of shares will differ materially from that of a typical performance benchmark index.

Long-term Approach

Contrarius takes a long-term approach to investing, with a typical investment horizon of four years. It is believed that the ability to outperform in the long-term is largely determined by focusing on the long-term value of a business rather than short–term news flow. In the short-term share prices tend to be driven primarily by market sentiment and the immediate earnings outlook rather than the underlying value of the business.

Fundamental Research

Our investment philosophy is valuation based with investments selected following detailed proprietary research undertaken by Contrarius. This 'bottom-up' research seeks to determine the underlying intrinsic value of the investment.

Click here to view the Fund's latest Performance details.

Past performance is not a reliable indicator of future results. Fund unit prices fluctuate and are not guaranteed. Returns may decrease or increase as a result of currency fluctuations. When making an investment in the Fund, an investor’s capital is at risk. Information on this webpage is provided for general information only and does not take into account individual investor’s objectives, financial situation, needs or circumstances. This information does not constitute personal financial advice nor a recommendation to buy, sell or hold, nor an offer to sell or a solicitation to buy or hold units in the Fund, securities mentioned in it or any other interests. Investors should consider the appropriateness of the information provided on this webpage having regard to their individual objectives, financial situation, needs or circumstances. Investors should refer to the Fund’s Product Disclosure Statement (“PDS”) and Target Market Determination (“TMD”) before making any investment decision. The PDS, daily unit prices and additional information can be obtained by contacting Contrarius Investment Advisory Pty Ltd or from www.contrarius.com. Contrarius Global Equity Fund’s TMD is available at - https://www.contrarius.com/InvestWithUs/Documentation/. A TMD 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 TMD for this financial product may need to be reviewed.

The Fund’s complete name is the Contrarius Global Equity Fund (Australia Registered) (“Fund”) and is a managed investment scheme registered in Australia. The Fund was registered with the Australian Securities and Investments Commission on 8 May 2018. The Australian Registered Scheme Number (“ARSN”) is 625 826 075. The inception date of the Fund is 1 July 2018. The inception date of the Retail Class is 1 July 2018. The inception date of the Investment Strategy is 1 January 2009. Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Fund. Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). Equity Trustees has appointed Contrarius Investment Management Limited (“Contrarius” or “Investment Manager”), a company incorporated in Jersey with registered number 100697, regulated by the Jersey Financial Services Commission, registration number FSB 1906, to invest and manage the assets of the Fund. Contrarius Investment Advisory Pty Limited (“Contrarius Australia” or the “Distributor”) (ABN 48 618 145 449), an Australian incorporated company with AFSL No. 506315 is the sole distributor of the Fund in Australia.

The information provided on this webpage has been prepared by Contrarius Australia in its capacity as the distributor of the Fund. It may not be complete and up to date for the purposes of investors of the Fund. Neither Contrarius Australia, Equity Trustees, nor any of their related parties, directors or employees, provide any warranty of accuracy or reliability in relation to such information, or accept any liability to any person who relies on it.