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 (August 2023)
25 slides from FPA Queens Road Small Cap Value Fund Institutional Class's investor presentation, Aug 9, 2023
Slide 1: FPA Crescent Fund Second Quarter 2023 Webcast Presentation
L P rs, is o d v FPA Crescent c A Fund (FPACX) Second c f i i 2023 Webcast Presentation Quarter P a Presented by: Steven Romick, Mark Landecker, Brian Selmo rs t August 9, 2023 F i Follow us on:
Slide 2: Performance
Performance Market Cycle P Trailing Performance (%) Performance L 3/25/00- 10/10/07- 1/4/22- As of Date: 6/30/2023 Inception* 30 Years 20 Years 15 Years 10 Years 5 Years 3 Years 1 Year YTD QTD 10/9/07 1/3/22 6/30/23 FPA Crescent Fund (FPACX) MSCI ACWI** S&P 500 60% MSCI ACWI **/40% BBg US Agg 9.79 -
Slide 3: Executive summary
Executive summary ■ June marked the 30th anniversary of the FPA Crescent Fund. The Fund has met its objective of generating equity-like L P returns while avoiding permanent capital impairment through multiple market cycles. rs, o ■ Crescent’s net risk exposure increased slightly in the quarter, addi
Slide 4: Years of equity-like returns with less risk
30 years of equity-like returns with less risk Growth of $10,000 L P rs, $170,000 FPA Crescent S&P 500 is o v 60% S&P 500 / 40% Bloomberg US Agg $130,000 MSCI World Index $90,000 Morningstar Moderately Aggressive Allocation Category A d $50,000 i f i c $10,000 1993 1998 a c 2003 2008 2013 2018 2023
Slide 5: Faster recovery after loss periods
Faster recovery after loss periods Max Recovery Time (in Years) L P rs, 6.1 is o 4.9 d v 3.5 1.8 c A i f i FPA Crescent Fund a c S&P 500 60% S&P 500 / 40% Bloomberg US Agg Morningstar Moderately Aggressive Allocation t P Category F i rs Source: Morningstar. For illustrative purposes only. The chart
Slide 6: Quarter and Trailing Twelve-Month Performance vs. Indices
Performance Quarter and Trailing Twelve-Month Performance vs. Indices L P FPA Crescent – FPACX* Q2 2023 6.29% rs, Trailing 12-month 16.13% FPA Crescent – Long Equity** MSCI ACWI 9.09% 6.18% is o 21.38% 16.53% S&P 500 60% MSCI ACWI / 40% Bloomberg US Agg d v 8.74% 3.36% 19.59% 9.44% 60% S&P 500 / 40%
Slide 7: Developed markets and growth stocks outperformed
Developed markets and growth stocks outperformed Trailing Twelve-Month Performance vs Indices L P 25% 23.05% rs, o 21.38% 19.99% is 19.59% 20% 18.51% 18.25% 16.53% 16.13% v Return 15% d 12.72% 9.95% A 10% 5% i f i c 1.75% c 0% MSCI FPACX S&P 500 S&P 500 MSCI S&P 500 MSCI FPACX* MSCI MSCI MSCI EM ACW
Slide 8: Stock selection drives differentiated returns
Stock selection drives differentiated returns Long Equity Carve-Out Gross Performance vs. Indices CAGR CAGR 2023 L P FPACX Long Equity 1/1/07 to 6/30/23 9.20% 1/1/11 to 6/30/23 10.24% rs, YTD 17.66% o MSCI ACWI* 5.93% 13.93% Excess Return vs. MSCI ACWI 4.31% 3.72% S&P 500 Excess Return vs. S&P 500 9
Slide 9: 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 Holcim Meta Platforms 1.77% 1.32% 3.2% 1.8% Charter Communications is o International Flavors & Fragr
Slide 10: Portfolio Composition
Portfolio Composition FPA Crescent Fund Asset Class Composition L P Risk Asset 12/31/2022 6/30/2023 3/31/2023 rs 6/30/2022 , Average Common Stock, Long 68.5% 67.0% 65.3% is o 70.0% Since Inception* 57.5% Common Stock, Short Credit, Long 0.0% 2.4% 0.0% 2.8% d v 0.0% 2.6% 0.0% 1.5% -4.7% 10.0% Credit,
Slide 11: Global breadth
Global breadth Net Equity Geographic Exposure L P United States Domicile 61.1% Revenue 46.1% rs, International 38.9% is o 53.9% v Developed 34.5% 28.0% Emerging Mark ets Rest of World (Uncategorized) A d 4.4% - 16.1% 9.8% . i f i c a c t P F As of June 30, 2023. i rs Source: Factset, based on countr
Slide 12: 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 3-Year Trailing EPS Growth rs, 3-Year Forward Estimated EPS Growth FPA Crescent - Long Equity 6/30/2022 11.8x 6/30/2023 14.2x 6/30/2022 1.6x 6
Slide 13: US stock valuations more expensive than 25-year average
US stock valuations more expensive than 25-year average S&P 500 Valuations L P Forward P/E Q2 2023 19.1x 25-year Avg. 16.8x rs, Shiller's P/E (CAPE) Dividend Yield Price to book 30.8x 1.6% 3.8x is o 27.8x 2.0% 3.1x Price to cash flow d v 14.7x 11.2x c A i f i a c t P F i rs As of June 30, 2023. Sour
Slide 14: International stocks are cheaper than US stocks
International stocks are cheaper than US stocks Twelve-Month Forward Price to Earnings Ratio Discount MSCI AC World Index ex-US vs S&P 500 Index L P rs, is o d v c A i f i a c t P F i rs As of June 30, 2023. Source: Factset, MSCI, Standard & Poor's, J.P. Morgan Asset Management Guide to the Markets.
Slide 15: International stocks have been laggards
International stocks have been laggards MSCI EAFE and MSCI USA Relative Performance L P , US Dollar, Total Return, Cumulative Outperformance o rs v is A d i f i c a c t P F i rs As of June 30, 2023. Source: J.P. Morgan Asset Management Guide to the Markets, Factset, MSCI. Regime change determined wh
Slide 16: Q&A
L P rs, is o d v Q&A c A i f i ac t P F i rs 16
Slide 17: Appendix
L P rs, is o d v Appendix c A i f i ac t P F i rs 17
Slide 18: Forecasting is futile
Forecasting is futile S&P 500 Actual vs Wall Street Analysts’ Forecasted Returns Ex-Dividends L P 30% Actual vs Forecast rs, 20% 10% is o 0% -10% d v -20% c A i -30% -40% -50% ci f -60% 2005 2006 2007 2008 P a 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 rs t F i From 2005 t
Slide 19: Long equity performance
Long equity performance FPA Crescent Long Equity Performance vs The Fund and Indices L P 1.5 Years 3.5 Years 5.5 Years rs, 10.5 Years o FPA Crescent 1.41% 8.26% 7.18% 8.20% is FPA Crescent – Long Equity -0.37% 9.61% 8.79% 12.58% v MSCI ACWI -4.76% 7.40% 7.26% 9.01% d S&P 500 -3.04% 11.49% 11.66% 13.
Slide 20: Fund holdings as of June 30, 2023
Fund holdings as of June 30, 2023 Communication Services Alphabet Comcast Meta Platforms 15.4% 4.9% 3.2% 2.8% Health Care Icon PLC Industrials 0.6% 0.6% 7.8% Common Stocks – SPACs SPACs (multiple securities) Credit – Long L P 0.0% 0.0% 1.0% Charter Communications Activision Blizzard Netflix Nintendo
Slide 21: Important disclosures
Important disclosures P These slides are intended as supplemental material to the Second Quarter 2023 FPA Crescent Fund audio presentation and transcript that are posted on FPA's website at www.fpa.com. , L This presentation is for informational and discussion purposes only and does not constitute,
Slide 22: 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 23: Important disclosures (continued)
Important disclosures (continued) Investing in Special Purpose Acquisition Companies (“SPACS”) involves risks. Because SPACs and similar entities have no operating history or ongoing business other than seeking L P acquisitions, the value of their securities is particularly dependent on the ability
Slide 24: 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 25: Important disclosures (continued)
Important disclosures (continued) P Net Risk Exposure is a measure of the extent to which a fund’s trading book is exposed to market fluctuations. Regarding the Fund, it is the percent of the portfolio exposed to Risk Assets. , asset's book value is equal to its carrying value on the balance sheet,
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