A handful of Spanish fund managers are achieving Spectacular returns in 2022, in the middle of a disastrous financial market. Firms specializing in value investing, such as Azvalor either Cobasand funds dedicated to Latin America have achieved excellent returns for their participants, while the vast majority of Spanish funds are in negative this year.
The exercise is being especially complicated, because not only the Stock Market falls, but also fixed income. Víctor Alvargonzález, founder of the advisory firm Nexstep Finance, explains that “in the more than 30 years that I have been working in the financial industry, I had not seen a correction in bonds like the one we are experiencing.”
In equities, the S&P 500, the benchmark index in the United States, has lost 17% so far this year, its worst start since 1932. The European stock market is down 14% on average and the Japanese 11%. Runaway inflation, the withdrawal of expansionary monetary policies, the last blows of the coronavirus and the war in Ukraine have become a devastating cocktail for the markets.
On average, Spanish funds have registered falls in the first four months of the year of 4.5%, according to data from Inverco, the sector association. In the stock market funds of the United States, losses exceed 9%.
- The Rioja. The Spanish fund that rises the most in the year is a mystery. This is the Alcalá Multigestion Garp fund, from the management company Creand Asset Management (formerly Banco Alcalá). It is a fund whose adviser is Ignacio José Irigoyen Ramírez, a businessman in the tourism sector of La Rioja, totally unknown in the asset management sector.
- Purse. Its greatest exposure is in the energy, oil and gas sectors, which it complements with a value fund focused on small and medium-sized companies in the United States. The meteoric rise in the prices of raw materials and energy have contributed to the vehicle’s revaluation by 55% in the year. In its portfolio it has some companies dedicated to the maritime transport of liquefied gas –such as Golar or Teekay– that had been in the Cobas Internacional fund for years. Also the industrial bread producer Aryzta.
- Preceding. Interestingly, the most profitable investment fund in Spain in 2021 was the Alcalá Multigestion Oricalco, from the same manager and also with an external advisor based in Logroño (La Rioja). This fund made a fortune by investing in companies linked to the world of crypto assets. This year its value has plummeted by 38%.
However, some managers have managed to swim against the tide and find excellent investment opportunities. Many times in cursed sectors.
That is the case of Azvalor. Álvaro Guzmán de Lázaro and his team have achieved a revaluation of their star fund, Azvalor Internacional, of 34% in so far this year. It has been thanks to a determined commitment by companies dedicated to the extraction of oil and coal, and to gold and uranium mining.
“We are achieving the highest profitability differential against the market in the 20 years that we have been in the markets,” they explain from the firm.
Francisco García Paramés, president of Cobas Asset Management and former boss of Guzmán de Lázaro at Bestinver, is also achieving exceptional returns, after several years in the doldrums. Its Cobas Internacional fund rose by more than 9% in the year, largely due to its determined investment in the natural gas transportation sector by means of ships.
The war in Ukraine and the closure by Russia of several important gas pipelines have triggered the hiring of methane tankers that bring gas from other producers to Europe.
Another Spanish fund with a value investment style that is giving very good results is Hamco Global Value, managed by John Tidd. The vehicle has achieved more than 13% profitability so far this year. One of his specialties is small Canadian oil exploration companies.
Another of the few positive surprises of the year has been the Latin American stock market, especially that of Brazil. The strong revaluation of raw materials (especially oil) has greatly boosted the price of a good handful of companies in the American subcontinent.
The specialized funds of EDM, Santander and Sabadell in this region recorded increases of more than 10% with positions in Mexican and Brazilian oil companies and a clear commitment to the financial sector of these countries.
A third category of investment vehicles that have weathered the downpour well are those with an absolute return approach, which try to distance themselves from what the markets do (using derivatives and hedging, in order to make money when the stock market falls).
The best example is the Global Allocation, by Luis Bononato, which adds a 22% return in the year. The manager has avoided falls by combining a portfolio with a lot of liquidity (up to 70%), avoiding the Stock Market and other risky assets and maintaining positions in gold and silver.