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 2025)
29 slides from FPA Queens Road Small Cap Value Fund Institutional Class's investor presentation, Jan 29, 2025
Slide 1: FPA Crescent Fund Fourth Quarter 2024 Webcast Presentation
L P rs , i so d v c FPA Crescent Fund (FPACX) A i f i c Fourth Quarter 2024 Webcast Presentation a P Presented by: Steven Romick, Mark Landecker, Brian Selmo r st January 29, 2025 F i Follow us on:
Slide 2: Performance
Performance Trailing Performance (%) As of December 31, 2024 Inception* 30 Yr 20 Yr 15 Yr 10 Yr 5 Yr 3 Yr 1 Yr YTD QTD 10/9/07P Market Cycle Performance L 3/25/00- 10/10/07- 1/4/22- 1/3/22 12/31/24 FPA Crescent Fund (FPACX) MSCI ACWI** S&P 500 9.99 - 10.55 10.05 - 10.92 8.14 - 10.35 8.76 - 13.88 7.8
Slide 3: Executive summary
Executive summary ■ The bull market continued in Q4, and the MSCI ACWI and S&P 500 rallied to new highs, making the L P stock market generally more expensive. rs , ■ Corporate credit spreads remained near all-time lows. i so ■ Crescent performed well on an absolute basis and relative to its net risk
Slide 4: Performance
Performance Quarter and Trailing Twelve-Month Performance vs Indices L P , December 31, 2024 FPA Crescent – FPACX* Q4 2024 o 1.05 rs Trailing 12-month 13.96 FPA Crescent – Long Equity** MSCI ACWI v i s 1.15 -0.99 19.85 17.49 S&P 500 60% MSCI ACWI / 40% Bloomberg US Agg A d 2.41 -1.81 25.02 10.77 60%
Slide 5: US growth stocks outperformed (again)
US growth stocks outperformed (again) Trailing Twelve-Month Performance vs Indices December 31, 2024 L P 40% rs , o 36.07% 35% 30% 25% 25.02% 24.23% v i s Return d 19.85% 18.67% 20% 17.49% A 13.96% 15% 12.29% 10.76% c 10% 7.50% i 5.53% 5% 0% S&P 500 S&P 500 MSCI ci f FPACX MSCI MSCI FPACX* S&P 500 M
Slide 6: Stock selection drives differentiated returns
Stock selection drives differentiated returns Long Equity Carve-Out Gross Performance vs Indices (%) CAGR L P FPACX Long Equity 1/1/07 to 12/31/2024 11.02 1/1/11 to 12/31/2024 10.06 rs , 2024 19.85 MSCI ACWI* Excess Return vs. MSCI ACWI S&P 500 10.37 i so 6.91 3.16 10.57 17.49 2.36 25.02 Excess Retu
Slide 7: Portfolio Composition
Portfolio Composition FPA Crescent Fund Asset Class Composition L P , December 31, 2024 Risk Asset 12/31/2024 9/30/2024 o 12/31/2023 rs Average Since Inception* Common Stock, Long Common Stock, Short 60.0 0.0 60.7 -0.2 v i s 62.2 0.0 57.7 4.4 Credit, Long Credit, Short 2.4 0.0 A d 3.5 0.0 3.3 0.0 9.
Slide 8: Global stock market is more richly valued
Global stock market is more richly valued MSCI ACWI Return, Earnings Growth and Valuation vs FPA Crescent Exposure L P , 2022-2024 Return MSCI ACWI Earnings P/E o FPACX Exposure Equity rs Credit s ex-Div Growth TTM 2022 2023 -19.80% 20.09% 5.3% -0.7% 15.2 18.4 v i 68.5% 62.2% 2.5% 3.3% 2024 YE 2022
Slide 9: Performance contribution
Performance contribution Trailing Twelve-Month Contributors and Detractors L P , December 31, 2024 Top 5 Performance Contribution Percent of Portfolio Bottom 5 o rsPerformance Contribution Percent of Portfolio Alphabet Meta 1.74 1.72 5.2 3.1 Heineken JDE Peet's v i s -0.54 -0.44 1.7 1.0 Jefferies Ci
Slide 10: Global breadth
Global breadth Net Equity Geographic Exposure L P , December 31, 2024 Domicile o Revenue rs United States International 65.2 34.8 v i s 48.2 51.8 Developed Emerging Mark ets A d 32.2 2.6 27.7 16.3 c Rest of World (Uncategorized) - 7.8 . i f i a c t P i r s F Source: Factset, based on country of domi
Slide 11: Good performance tends to breed complacency
Good performance tends to breed complacency Percent of Investors who Believe There is Less than a 10% Probability of a Stock Market Crash L P , January 2009 to November 2024 o rs v i s A d i f i c a c t P i r s F Source: Apollo Academy. As of November 30, 2024. https://www.apolloacademy.com/bullish-
Slide 12: More optimism → less caution
More optimism → less caution Stocks with Enterprise Value/Sales Ratios >10x L P , December 1995 to November 2024 o rs v i s A d i f i c a c t P i r s F Source: Compustat. Goldman Sachs. As of November 30, 2024. Past performance is no guarantee, nor is it indicative, of future results. Please refer t
Slide 13: Concentration of outperforming companies
Concentration of outperforming companies Percent of Companies Outperforming the S&P 500 L P , 1990-2024 o rs v i s A d i f i c a c t P i r s F Source: BofA Global Research. BofA Global Investment Strategy. As of December 10, 2024. Past performance is no guarantee, nor is it indicative, of future res
Slide 14: High momentum stocks have exploded higher
High momentum stocks have exploded higher Momentum Year-On-Year Returns L P , 1997-2024 o rs v i s A d i f i c a c t P i r s F Source: Global Multi Asset Thought of the Week. Momentum Ruled in 2024, But Reversal Likely in 2025.Morgan Stanley. December 23, 2024. https://www.morganstanley.com/im/en- u
Slide 15: Less magnificent but still expensive
Less magnificent but still expensive P/E vs Earnings Growth L P P/E 3-Year Earnings Growth rs , 1-Year Forward P/E 10-Year Avg. TTM 1-Year Forward Trailing i so Forward 3-Year Forward EPS Growth v Cintas 34.0 39.9 15.6% 13.1% 3.0 Costco 35.9 49.0 13.6% 9.2% 5.3 Iron Mountain Sherwin Williams Watsco
Slide 16: Relative equity valuation metrics
Relative equity valuation metrics FPA Crescent Fund Long Equity Holding Valuations and Earnings Growth vs Stock Market L P , December 31, 2024 Price/Earnings 1-Year Forward Price/Book o rs 3-Year Forward Estimated EPS s Growth FPA Crescent Long Equity Portfolio 15.8x v i 2.1x 22% vs. MSCI ACWI vs. S
Slide 17: US stocks more richly priced vs international
US stocks more richly priced vs international MSCI Forward P/E: US vs ACWI ex-US L P , 2001-2024 o rs v i s A d i f i c a c t P i r s F Source: LSEG Datastream, Yardeni Research, MSCI, and IBES. As of December 19, 2024. Past performance is no guarantee, nor is it indicative, of future results. Pleas
Slide 18: US trades near its high valuation, unlike other regions
US trades near its high valuation, unlike other regions Regional Valuations L P , Price/Forward Earnings rs Percentile Rank Since 1996 i so d v c A i f i a c t P i r s F Source: AB Funds. Mapping Out the 2025 Investment Landscape Across Asset Classes December 5, 2024. Data as of November 30, 2024. h
Slide 19: High yield doesn't offer great opportunity
High yield doesn’t offer great opportunity High Yield Index Effective Yield and Spread L P , 1997-2024 Recession ICE BofA US High-Yield Index Effective Yield rs ICE BofA US High-Yield Index Option-Adjusted Spread o Current Average 20% HY Effective Yield OAS v i s 7.0% 2.8% 8.5% 5.3% 15% A d 10% i f
Slide 20: Q&A
L P rs , i so dv Q&A c A i f i a c t P i r s F 20
Slide 21: Appendix
L P rs , i so dv Appendix c A i f i a c t P i r s F 21
Slide 22: Performance
Performance P Annual Performance (%)* L 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 FPA Crescent Fund (FPACX) 13.96 20.27 -9.20 15.17 12.11 20.02 -7.43 10.39 10.25 -2.06 6.64 MSCI ACWI** S&P 500 60% MSCI ACWI**/40% BBg US Agg 17.49 25.02 10.77 22.20 26.29 15.37 -18.36 -18.11 -16.02 18.54
Slide 23: Fund holdings as of December 31, 2024
Fund holdings as of December 31, 2024 Communication Services 14.4 Health Care 1.9 Preferred Stocks 0.0 P Alphabet 5.4 Eurofins Scientific 0.8 Gulfport Energy 0.0 Meta Platforms 3.2 ICON 0.6 L Comcast 2.5 Bio-Rad Laboratories 0.5 Exchange Traded Funds 0.0 Charter Communications 1.3 , Nintendo 1.1 Ind
Slide 24: 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 25: 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 26: 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 27: Important disclosures (continued)
Important disclosures (continued) Bloomberg (BBg) US Aggregate Bond Index provides a measure of the performance of the U.S. investment grade bonds market, which includes investment grade U.S. Government P bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed secu
Slide 28: Important disclosures (continued)
Important disclosures (continued) High-yield bonds (also called junk bonds) are bonds that pay higher interest rates because they have lower credit ratings than investment-grade bonds. High-yield bonds are more P likely to default, so they must pay a higher yield than investment-grade bonds to compe
Slide 29: 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
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