FPA Queens Road Small Cap Value Fund Institutional Class · NASDAQ:QRSIX
FPA Queens Road Small Cap Value Fund Institutional Class — FPA Crescent Fund — Investor Presentation (January 2024)
22 slides from FPA Queens Road Small Cap Value Fund Institutional Class's investor presentation, Jan 31, 2024
Slide 1: FPA Crescent Fund (FPACX) Fourth Quarter 2023 Webcast Presentation
L P rs, is o d v FPA Crescent c A Fund (FPACX) i f i a c Fourth Quarter 2023 Webcast Presentation t P Presented by: Steven Romick, Mark Landecker, Brian Selmo January 31, 2024 F i rs Follow us on:
Slide 2: Performance: Trailing Performance
Performance Trailing Performance (%) P Market Cycle Performance L , 3/25/00- 10/10/07- 1/4/22- As of Date: 12/31/2023 Inception* 30 Years 20 Years 15 Years 10 Years 5 Years 3 Years 1 Year YTD QTD 10/9/07 1/3/22 12/31/23 rs FPA Crescent Fund (FPACX) 9.86 9.73 7.96 9.63 7.13 11.10 7.95 20.27 20.27 7.5
Slide 3: Executive summary
Executive summary ■ The US stock market rallied to a new high while corporate credit spreads narrowed to near all-time lows. L P ■ Crescent performed well on an absolute basis and relative to its net risk exposure in 2024. rs, is o ■ The Fund’s net risk exposure decreased during the year from 75% to
Slide 4: Quarter and Trailing Twelve-Month Performance vs. Indices
Performance Quarter and Trailing Twelve-Month Performance vs. Indices L P FPA Crescent – FPACX* Q4 2023 7.52% rs, Trailing 12-month 20.27% FPA Crescent – Long Equity** MSCI ACWI 11.42% 11.03% is o 29.10% 22.20% S&P 500 60% MSCI ACWI / 40% Bloomberg US Agg d v 11.69% 9.36% 26.29% 15.37% 60% S&P 500 /
Slide 5: Developed markets and growth stocks outperformed
Developed markets and growth stocks outperformed Trailing Twelve-Month Performance vs Indices L P 35% 33.22% 30.03% rs, o 29.10% 30% 26.29% is 25% 23.79% 22.23% 22.20% 20.27% v Return 20% 15.62% 15% 10% A d 11.81% 9.83% c 5% 0% MSCI S&P 500 FPACX i f i S&P 500 MSCI S&P 500 MSCI FPACX* MSCI MSCI MSCI
Slide 6: Stock selection drives differentiated returns
Stock selection drives differentiated returns Long Equity Carve-Out Gross Performance vs. Indices CAGR CAGR 2023 L P , 1/1/07 to 12/31/23 1/1/11 to 12/31/23 rs FPACX Long Equity 10.52% 9.51% 29.10% MSCI ACWI* 6.32% 22.20% Excess Return vs. MSCI ACWI S&P 500 9.56% 3.20% is 9.78% o 6.90% 26.29% v Exce
Slide 7: Performance contribution
Performance contribution Trailing Twelve-Month Contributors and Detractors L P Contributors Performance Contribution Percent of Portfolio Detractors rs, Performance Contribution Percent of Portfolio o Meta Platforms 2.59% 2.4% International Flavors & Fragrances -0.35% 2.0% is Alphabet 2.52% 5.0% McD
Slide 8: Portfolio Composition
Portfolio Composition FPA Crescent Fund Asset Class Composition L P Risk Asset 12/31/2023 9/30/2023 12/31/2022 rs, Average Since Inception* o Common Stock, Long 62.2% 64.3% 68.5% 57.6% is Common Stock, Short 0.0% 0.0% 0.0% 4.6% v Credit, Long 3.3% 3.3% 2.4% 9.9% Credit, Short Other 0.0% 4.6% A 0.0%
Slide 9: Global breadth
Global breadth Net Equity Geographic Exposure L P United States Domicile 61.8% Revenue 47.0% rs, International Developed 38.2% 34.7% is o 53.0% 27.7% Emerging Markets v 3.5% d 16.0% A Rest of World (Uncategorized) - 9.3% . i f i c a c t P F i As of December 31, 2023. rs Source: Factset, based on cou
Slide 10: International stocks appear cheaper than US stocks
International stocks appear cheaper than US stocks Global Stock Market Valuations as of December 31, 2023 L P Price to Earnings Ratio Trailing 12-Month rs, Price to Book Ratio is o Current Average v Current Average 25-year range 6.0x 25-year range 40.0x 35.0x 30.0x A 5.0x 4.0x d 25.0x 20.0x i f i c
Slide 11: Relative valuation metrics
Relative valuation metrics FPA Crescent Fund Long Equity Holding Valuations and Earnings Growth vs. Stock Market and vs. Magnificent Seven L P Price/Earnings 1 Year Forward Price/Book 3-Year Trailing EPS Growth 3-Year Forward Estimated EPS Growth rs,Return on Equity Net Debt/Total Capital o 12/31/20
Slide 12: High-yield not interesting
High-yield not interesting US High-Yield Effective Yield and Option-Adjusted Spread L P Recession ICE BofA US High-Yield Index Effective Yield rs, ICE BofA US High-Yield Index Option-Adjusted Spread o Current Average HY Effective Yield 7.7% 8.5% is 20% OAS 3.6% 5.4% 15% d v c A i 10% ci f a 5% 0% t
Slide 13: Q&A
L P rs, is o d v Q&A c A i f i ac t P F i rs 13
Slide 14: Appendix
L P rs, is o d v Appendix c A i f i ac t P F i rs 14
Slide 15: Annual Performance
Performance P Annual Performance (%)* L 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 , FPA Crescent Fund (FPACX) 20.27 -9.20 15.17 12.11 20.02 -7.43 10.39 10.25 -2.06 6.64 MSCI ACWI** 22.20 -18.36 18.54 16.25 26.60 -9.41 23.97 7.86 -2.36 4.16 rs S&P 500 26.29 -18.11 28.71 18.40 31.49 -4.38 21.8
Slide 16: Fund holdings as of December 31, 2023
Fund holdings as of December 31, 2023 P Communication Services 14.4% Health Care 0.7% Common Stocks – SPACs 0.0% Alphabet 5.1% Icon PLC 0.7% SPACs (multiple securities) 0.0% L Comcast 3.2% Hidden 0.0% Meta Platforms 2.7% Credit – Long 1.4% , Charter Communications 1.6% Industrials 7.0% McDermott Int
Slide 17: Important disclosures
Important disclosures P These slides are intended as supplemental material to the Fourth Quarter 2023 FPA Crescent Fund audio presentation and transcript that are posted on FPA's website at fpa.com. , L This presentation is for informational and discussion purposes only and does not constitute, and
Slide 18: Important disclosures (continued)
Important disclosures (continued) P 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 policies and other matters of interest to a prospective investor. Please read the Prospectus carefull
Slide 19: 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 20: Important disclosures (continued)
Important disclosures (continued) P 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 bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securi
Slide 21: Important disclosures (continued)
Important disclosures (continued) P Net Equity Exposure includes long equity securities minus short-sales and preferred securities. L Net Income (NI), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, deprecia
Slide 22: Important disclosures (continued)
Important disclosures (continued) Morningstar Category L P Moderately Aggressive Allocation Category portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold larger positions in stocks than moderate-allo
FPA Crescent Fund — Investor Presentation (January 2024) on 6ix