FPA Queens Road Small Cap Value Fund Institutional Class · NASDAQ:QRSIX
FPA Queens Road Small Cap Value Fund Institutional Class — FPA Crescent Fund — Q2 2024 Earnings Presentation
23 slides from FPA Queens Road Small Cap Value Fund Institutional Class's earnings presentation, Jul 29, 2024
Slide 1: FPA Crescent Fund Second Quarter 2024 Webcast Presentation
L P rs , i so d v c FPA Crescent Fund (FPACX) A i f i c Second Quarter 2024 Webcast Presentation a P Presented by: Steven Romick, Mark Landecker, Brian Selmo r st July 29, 2024 F i Follow us on:
Slide 2: Performance
Performance P Market Cycle Trailing Performance (%) Performance As of Date: 6/30/2024 Inception* 30 Years 20 Years 15 Years 10 Years 5 Years 3 Years 1 Year YTD , QTD L 3/25/00- 10/10/07- 1/4/22- 10/9/07 1/3/22 6/30/24 rs FPA Crescent Fund (FPACX) 10.00 9.91 8.11 9.40 7.50 9.96 6.47 16.37 8.76 2.67 1
Slide 3: Executive summary
Executive summary ■ The US stock market rallied to a new high while corporate credit spreads remained near all-time lows. L P ■ Crescent performed well on an absolute basis and relative to its net risk exposure year-to-date. rs , ■ The Fund’s net risk exposure decreased during the past twelve months
Slide 4: Performance
Performance Quarter and Trailing Twelve-Month Performance vs Indices L P FPA Crescent – FPACX* Q2 2024 2.67% rs , Trailing 12-month 16.37% FPA Crescent – Long Equity** MSCI ACWI i so 3.85% 2.87% 23.71% 19.38% S&P 500 60% MSCI ACWI / 40% Bloomberg US Agg d v4.28% 1.75% 24.56% 12.49% 60% S&P 500 / 40%
Slide 5: Developed markets and growth stocks outperformed
Developed markets and growth stocks outperformed Trailing Twelve-Month Performance vs Indices L P 35% 32.52% rs , 30% 25% 29.10% 24.70% 24.56% i so 20.19% 19.38% v Return 20% 15% 10% A d 16.37% 15.29% 13.92% 12.55% 11.62% 5% 0% i f i c S&P 500 Growth FPACX Long Equity** MSCI ACWI Growth a c S&P 500
Slide 6: Stock selection drives differentiated returns
Stock selection drives differentiated returns Long Equity Carve-Out Gross Performance vs Indices CAGR CAGR L 2024 P , 1/1/07 to 6/30/2024 1/1/11 to 6/30/2024 YTD rs FPACX Long Equity 10.97% 9.99% 12.83% MSCI ACWI* 6.78% 11.30% Excess Return vs. MSCI ACWI S&P 500 10.17% i o 3.20% s 10.38% 1.53% 15.29
Slide 7: Performance contribution
Performance contribution Trailing Twelve-Month Contributors and Detractors L P Contributors Alphabet Performance Contribution 2.37% Percent of Portfolio 5.3% Detractors JDE Peet's rs , Performance Contribution -0.41% Percent of Portfolio 1.1% Meta Platforms 1.81% 2.9% Charter i so -0.31% 1.4% v Holc
Slide 8: Portfolio Composition
Portfolio Composition FPA Crescent Fund Asset Class Composition L P Risk Asset 6/30/2024 3/31/2024 6/30/2023 rs , Average Since Inception* o Common Stock, Long 62.4% 62.3% 67.0% 57.7% s Common Stock, Short -0.7% -0.2% 0.0% 4.5% Credit, Long 3.2% 3.2% v i 2.9% 9.8% d Credit, Short 0.0% 0.0% 0.0% 0.1%
Slide 9: Global breadth
Global breadth Net Equity Geographic Exposure L P United States Domicile 64.0% Revenue 47.5% rs , International 36.0% i so 52.9% v Developed 33.0% 27.9% Emerging Mark ets Rest of World (Uncategorized) A d 3.1% - 16.3% 8.7% . i f i c a c t P i r s F As of June 30, 2024. Source: Factset, based on coun
Slide 10: Stock prices increasing faster than earnings
Stock prices increasing faster than earnings S&P 500 and MSCI ACWI Earnings Growth and Index Return since Year-End 2022 L P Cumulative S&P 500 Cumulative Cumulative rs MSCI ACWI , Cumulative o Earnings Growth Return Earnings Growth Return 12/31/2022 - 6/30/2024 1.84% 42.22% v i s 0.40% 32.48% A d i
Slide 11: Net risk exposure generally moves inversely with market
Net risk exposure generally moves inversely with market FPA Crescent Net Risk Exposure vs CAPE Shiller P/E L P FPA Crescent Net Risk Exposure (LHS) rs , CAPE Shiller P/E (RHS) 80% i so 40 70% d v 35 60% c A 30 i f i c 50% 25 40% Jun-02 Jun-04 P Jun-06 a Jun-08 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18 Jun-
Slide 12: Migration to higher quality businesses
Migration to higher quality businesses Return on Equity of FPA Crescent Portfolio Companies L P FPA Crescent ROE (TTM) rs , 50% i so v 40% 30% A d 20% i f i c c 10% 0% Jun-02 P Jun-04 Jun-06 a Jun-08 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18 Jun-20 Jun-22 Jun-24 r s t F i Source: FPA, Factset. As of June 3
Slide 13: Relative valuation metrics
Relative valuation metrics FPA Crescent Fund Long Equity Holding Valuations and Earnings Growth vs Stock Market L P Price/Earnings 1 Year Forward Price/Book rs , 3-Year Forward Estimated EPS Growth 6/30/2023 6/30/2024 6/30/2023 so 6/30/2024 i 6/30/2023 6/30/2024 v FPA Crescent Long Equity Portfolio
Slide 14: Q&A
L P rs , i so dv Q&A c A i f i a c t P i r s F 14
Slide 15: Appendix
L P rs , i so dv Appendix c A i f i a c t P i r s F 15
Slide 16: Performance
Performance Annual Performance (%)* FPA Crescent Fund (FPACX) 2023 20.27 2022 -9.20 2021 15.17 2020 12.11 2019 20.02 2018 -7.43 2017 10.39 2016 10.25 L P 2015 -2.06 2014 6.64 MSCI ACWI** S&P 500 60% MSCI ACWI**/40% BBg US Agg 60% S&P500/40% BBg US Agg 22.20 26.29 15.37 17.67 -18.36 -18.11 -16.02 -15
Slide 17: Fund holdings as of June 30, 2024
Fund holdings as of June 30, 2024 Communication Services 14.7% Health Care 1.2% Preferred Stocks 0.1% P Alphabet 6.0% Icon PLC 0.7% Gulfport Energy 0.0% Meta Platforms 3.1% Bio-Rad Laboratories 0.4% McDermott Preferred 0.0% L Comcast 2.7% Eurofins Scientific 0.1% Charter Communications 1.1% Warrants
Slide 18: Important disclosures
Important disclosures These slides are intended as supplemental material to the Second Quarter 2024 FPA Crescent Fund audio presentation and transcript that are posted on FPA's website at fpa.com. L P This presentation is for informational and discussion purposes only and does not constitute, and sh
Slide 19: Important disclosures (continued)
Important disclosures (continued) You should consider the Fund's investment objectives, risks, and charges and expenses carefully before you invest. The Prospectus details the Fund's objective and website at fpa.com, by calling toll-free, 1-800-982-4372, or by contacting the Fund in writing. NO INVE
Slide 20: Important disclosures (continued)
Important disclosures (continued) Index / Benchmark / Category Definitions L P Index returns are provided for comparison purposes only. Indices are unmanaged and index returns do not reflect transactions costs (e.g., commissions), investment management fees or other fees and expenses that would redu
Slide 21: Important disclosures (continued)
Important disclosures (continued) Bloomberg (BBg) US Aggregate Bond Index provides a measure of the performance of the US investment grade bonds market, which includes investment grade U.S. Government P bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securi
Slide 22: Important disclosures (continued)
Important disclosures (continued) Net Equity Exposure includes long equity securities minus short-sales and preferred securities. taxes, and other expenses. L P Net Income (NI), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, o
Slide 23: Important disclosures (continued)
Important disclosures (continued) P Morningstar Category Moderately Aggressive Allocation Category portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These L portfolios tend to hold larger positions in stocks than moderate-allo