FPA Queens Road Small Cap Value Fund Institutional Class · NASDAQ:QRSIX
FPA Queens Road Small Cap Value Fund Institutional Class — FPA U.S. Core Equity Fund — Investor Presentation (January 2022)
18 slides from FPA Queens Road Small Cap Value Fund Institutional Class's investor presentation, January 2022
Slide 1: FPA U.S. Core Equity Fund, Inc. (FPPFX) 2021 Year-End Presentation
As of December 31, 2021 FPA U.S. Core Equity Fund, Inc. (FPPFX) 2021 Year-End Presentation January 2022 Presented by: Gregory R. Nathan, Portfolio Manager
Slide 2: Performance – net of fees
Performance – net of fees Trailing Performance (%) As of December 31, 2021 QTD YTD 1 Year 3 Years 5 Years 10 Years* FPA U.S. Core Equity Fund 8.01 22.86 22.86 27.18 15.23 12.84 S&P 500 11.03 28.71 28.71 26.07 18.47 16.55 Periods greater than one year are annualized. Fund performance is shown net of
Slide 3: Fund highlights and outlook
Fund highlights and outlook ■ In 2021, the Fund returned 22.86% (24.11% gross*) compared to the S&P 500’s (the “Index”) 28.71% total return ‒ Over the past three years, the Fund’s annualized return of 27.18% (28.68%* gross) compares favorably to the S&P 500’s 26.07% annualized total return ■ We beli
Slide 4: Fund overview
Fund overview Investment objective ■ The primary objective is long-term growth of capital. Current income is a secondary consideration Goal ■ Generate returns in excess of the S&P 500 Index over full market cycles* ■ Create a better version of the S&P500 by: ‒ Eliminating the worst parts of the Inde
Slide 5: Portfolio construction parameters
Portfolio construction parameters Broad market capitalization ■ The Fund will generally invest in companies with market caps of $2 billion or more at time of initial purchase ■ Allows us to invest wherever the best opportunities arise U.S. companies ■ At least 80% of net assets will be invested in U
Slide 6: Portfolio construction process
Portfolio construction process Create a diversified portfolio seeking above average risk-adjusted returns over the long-term ■ The world is dynamic with change taking place seemingly faster than ever before ‒ Therefore, we believe it is important to have a diversified portfolio to mitigate unforesee
Slide 7: Avoiding worst parts & embracing best aspects of S&P 500
Avoiding worst parts & embracing best aspects of S&P 500 Seek alpha by trying to avoid biggest losers and then secondarily, trying to pick potential winners Median Cumulative Return (2017-2021) -100.0% -50.0% 0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% Bottom 50 Bottom 100 Bottom 250 S&P 500 Total
Slide 8: U.S. Core Equity seeks to invest in growing companies
U.S. Core Equity seeks to invest in growing companies Global growth tied to the internet, digital, mobile and Metaverse revolution We believe a majority of the portfolio should benefit from these multi-year secular trends including: ■ Digital Advertising: Alphabet, Meta Platforms, Amazon.com, Mi
Slide 9: Key investment theme: The Metaverse
Key investment theme: The Metaverse • The Metaverse could be the successor to the mobile internet • The Metaverse can be defined as a persistent, digital world that is connected to many aspects of the physical world, including people, places and things. The Metaverse enables shared experiences acros
Slide 10: Key investment theme: The Metaverse (cont.)
Key investment theme: The Metaverse (cont.) Potential use cases of the Metaverse include… Source: Evercore ISI Research 12/10/2021. 10
Slide 11: Key investment theme: The Metaverse (cont.)
Key investment theme: The Metaverse (cont.) Sizing up the potential total addressable market (TAM) of the Metaverse based on current end markets and their respectable revenue base… Source: Gartner, Sensor Tower, Bernstein estimates and analysis 12/7/2021. 11
Slide 12: Portfolio holdings highlights
Portfolio holdings highlights ■ The Fund’s holdings generally operate within secularly growing industries ‒ We believe the aforementioned key investment themes helped fuel above average growth for many of the Fund’s portfolio companies ■ In our view, the Fund’s portfolio companies have strong compet
Slide 13: Holdings as of December 31, 2021
Holdings as of December 31, 2021 Com m unication Services 22.8% Financials 5.6% Inform ation Technology 33.9% Alphabet 9.6% Aon 0.8% Microsoft 10.7% Meta Platforms 6.6% Apollo Global Management 0.8% Apple 7.5% Comcast 1.6% American Express 0.7% Accenture 1.6% The Walt Disney Company 1.6% Willis Tow
Slide 14: Portfolio characteristics as of December 31, 2021
Portfolio characteristics as of December 31, 2021 FPA U.S. Core Equity Fund S&P 500 Large Capitalization Holdings % of Portfolio 90.1% 99.4% Top 5 Holdings % of Portfolio 41.7% 24.3% Top 10 Holdings % of Portfolio 49.9% 29.0% Foreign Securities % of Portfolio 3.7% 0.0% 12-Month Forward P/E 29.1x 20.
Slide 15: Sector breakdown as of December 31, 2021
Sector breakdown as of December 31, 2021 Sector FPA U.S. Core Equity Fund S&P 500 Information Technology 36.1% 28.7% Communication Services 24.1% 10.0% Consumer Discretionary 17.9% 12.0% Health Care 10.9% 13.1% Financials 5.7% 11.3% Industrials 2.1% 7.8% Consumer Staples 1.3% 6.1% Real Estate 0.6% 2
Slide 16: Important Disclosures
Important Disclosures This presentation is for informational and discussion purposes only. It is important to understand that the views expressed on these slides are subject to change without notice based on market and other conditions. This presentation does not constitute, and should not be constr
Slide 17: Important Disclosures – cont’d
Important Disclosures – cont’d Certain statements contained in this presentation may be forward-looking and/or based on current expectations, projections, and information currently available to FPA, and can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “exp
Slide 18: Important Disclosures – cont’d
Important Disclosures – cont’d Other Definitions 12-Month Forward P/E ratio is a current stock's price over its "predicted" earnings per share for the next twelve months. If the forward P/E ratio is higher than the current P/E ratio, it indicates decreased expected earnings. Active Share is defined
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