QSM Global Equity Long Short Fund

Investment Objective

The Fund’s objective is to produce positive returns over rolling five-year periods, by investing primarily in equity and equity-related securities.

Latest Meeting Note

Meeting 30 Sep 2024

The QSM Global Equity Long/Short Fund is managed by the highly experienced investment team that previously worked together at Majedie Asset Management, managing the Tortoise fund. With Matthew Smith and Tom Morris (co-founders of QSM) st...

The QSM Global Equity Long/Short Fund is managed by the highly experienced investment team that previously worked together at Majedie Asset Management, managing the Tortoise fund. With Matthew Smith and Tom Morris (co-founders of QSM) still co-managing the fund, they are joined by several members of their old firm covering both investment and non-investment roles. The fund follows a careful implementation of a value-based fundamental process, with a focus on large caps and a global remit, with the team using a macro/micro framework to guide decisions. A core principle of the process is the focus on asymmetric payoffs. For long positions, the team targets a 4:1 payoff, aiming to invest in stocks where downside risks are well understood but the market may be overly pessimistic despite catalysts which could lead to a inflection point in the equity story (e.g. management change or business turnaround). On the short side, the team generally focuses on stocks that are valued to perfection - where the market has overestimated the company’s ability to maintain its earnings trajectory. These shorts are not necessarily on bad companies but on those with stretched valuations, leaving significant downside potential if market sentiment shifts. The strategy does not engage in pairs trading but focuses on individual stock opportunities, where both macro and micro factors present compelling reasons to take positions. Long positions are typically held for up to five years, while short positions are held for one to three years. The fund maintains a liquidity-first approach, ensuring that positions can be easily managed and adjusted based on market conditions. The gross exposure is generally kept below 150%, and the net exposure has a range from -30% to +80%, but typically sits with a small net long bias.

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2023 0.6 0.8 0.2 0.5 0.6 0.1 0.0 0.4 0.0 0.2 0.1 0.2 0.9
2022 0.8 0.2 0.0 0.7 0.2 0.5 0.6 0.6 0.9 0.7 0.0 0.7 0.8

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