LISIX Commentary – Q4 2020
Thesis
LISIX is a bottom-up, growth-based fund that completes the core satellite strategy within global equity. The fund is unique in that it focuses on individual stocks rather than markets and looks for reasonably priced companies with strong growth potential. We like LISIX because of the managers’ expertise in various market caps, geographies, and sectors which helps keep the fund diversified while providing strong upside and downside capture over time.
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Overview
In the fourth quarter of 2020, LISIX outperformed the benchmark (MSCI EFEA Index) by 114bps due to both allocation and strong security selection within Industrials. Consumer Staples and Health Care also contributed to performance, while Consumer Discretionary and Financials detracted. Regionally, the UK positively contributed to returns, while Asia ex-Japan had a negative effect on the fund’s performance.
Q4 2020 Summary
- LISIX returned 17.19%, while the MSCI EAFE Index returned 16.05%
- International markets as a whole saw a strong rebound upon vaccine news
- Foreign currency strength also helped international stocks outperform dollar denominated stocks
- The “value” factor also saw strong performance during the quarter as it began to rebound and outperform growth
Outlook
- We continue to hold this fund and believe in our thesis due to the fund’s strong stock selection, ability to find well valued companies, and expertise in various market caps, geographies, and sectors
- Europe is attractive given valuations, potential profit recovery, government stimulus, and political calm
- Opportunities may be more balanced with a focus on “stay at home” and recovery stocks
- Potential for value to lead stock returns – similar to 2011-2015
- Encouraged by developments in Europe, yet remain underweight in Japan
[Category Mutual Fund Commentary]
Micah Weinstein
Research Analyst
Direct: 617.226.0032
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109