Smithson represents a small carve-out within the equity component of our Dynasty house-view Funds and is our only component focussed on the small and mid-cap sectors. As such, Smithson has a high beta characteristic and will tend to be much more volatile than our other fund components.
We trust that you found that the presentation enabled a better understanding of how the portfolio is positioned and why the Smithson quality investment philosophy resonates strongly with us, particularly in this time of decades-high global inflation. Specifically, we gain much comfort from the fact that the companies in which they invest generate strong cash flows without relying on leverage, and that these companies should be worth more in 3 – 5 years’ time, regardless of macroeconomic conditions. It is for these reasons that we are not unduly concerned about the current price setback of Smithson. This view is supported by Smithson’s analysis in that the performance of the portfolio from inception is currently in line with the cumulative free-cashflow growth of its investee companies over the same timeframe. Should strong cashflow growth continue over the medium-term as anticipated, this would augur well for a strong recovery in the Smithson share price.
Should you wish to view a recording of the webinar of 50 minutes, you can access it on this link.
