13 September 2021

Keep Carrying on

In this article, fund manager James Godrich provides the insight on the current financial markets and reviews some of the recent activity in the CSI funds.

by James Godrich

Fund Manager

It is our observation that in financial markets there is always something to be concerned with. Some risks such as Coronavirus and its various variants rumble along, some risks such as conflict in Afghanistan flare up at unexpected times and some risks seem entirely esoteric – for example it was recently pointed out to us that a very large Chinese real estate company was at risk of defaulting on it’s debt.

It is also our observation that the majority of the time, and certainly over the long run if capitalism is to prevail, stock markets go up and, whilst clearly impactful to millions of people worldwide, investors are perhaps advised to not allow news stories to drive decisions. That does not mean that we should be blind to these risks but cautious optimism is our natural state and in general we should keep on carrying on.

With this in mind, we have continued the process of increasing our ownership of businesses directly in Europe using the same investment strategy that we employ in the UK. We see a threefold benefit (versus using third-party specialist funds) to this strategy; we can save up to 0.1% in fees per year, we have full transparency of every £ - or € - of capital put to use and, most importantly, we believe we can outperform.

In March, we made our first investment into Assa Abloy, the leading global lock and door maker and the owner of brands such as Yale and HID. In April, we made a small initial investment (which we recently increased significantly) into Kering, the luxury fashion company with a portfolio boasting some of the world’s best-loved mega-brands such as Gucci and Saint Laurent. At the end of June we invested in Euronext, a business similar to the London Stock Exchange at it’s core. In July, we invested in Nestle, the world’s largest FMCG company by revenue. And most recently we invested in Nordnet, the leading pan Nordic savings and investment platform with a fast-growing customer base of more than 1.5 million people.

For now, in Europe we still gain the majority of our exposure through third party funds. However we hope to continue to find businesses both in the UK and abroad that will survive pandemics, conflict and anything else thrown at them and that can keep on carrying on.

James Godrich, fund manager of the CSI Funds.

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