(Formerly known as the Cambiar Unconstrained Equity Fund) The Cambiar Global Ultra Focus Fund is a concentrated, non-diversified portfolio that is made up of the highest conviction names from our Opportunity, Small Cap, SMID and International Equity Funds. In general, portfolio construction is based on a stock by stock analysis. The investment team will rely heavily on fundamentals and valuations, while taking into consideration global macro events.
The Fund may also engage in some proprietary shorting that Cambiar calls parent-subsidiary arbitrage (PASA). At certain times, the market valuation of a parent company and that of the subsidiary can become disconnected and nonsensical, creating unique opportunities.
Non-diversified fund designed for long-term capital appreciation
Concentrated 20-30 stock portfolio.
Global portfolio with a bias towards U.S. stocks.
Fund may hold derivatives, pair trades and occasional short positions.
Brian M. Barish, CFA
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Returns assume reinvestment of all dividend and capital gains distributions. Expense ratio is 1.40% (gross); 1.35% (net). Cambiar Investors, LLC has contractually agreed to reduce fees and reimburse expenses in order to keep net operating expenses from exceeding 1.10% of the average daily net assets of each of the Fund’s share classes until September 1, 2018. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000 Index returns do not reflect any management fees, transaction costs or expenses. The MSCI World Index is an unmanaged index compiled by Morgan Stanley Capital International. The MSCI indices returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an Index. The Global Ultra Focus Fund is not a diversified fund. For performance data current to the most recent month-end, please call 1-866-777-8227.
The Fund charges a 2.00% redemption fee on redemptions of shares held for less than 180 days.
|Top 10 Holdings||% Weight|
|% of Total||51.3|
|Holdings Subject to Change|
|Attributes||Cambiar||MSCI World||Russell 3000|
|Market Cap Wtd Avg||36.8 B||124.5 B||148.1 B|
|Market Cap Median||17.5 B||12.7 B||1.7 B|
|Sector Weights||Cambiar||MSCI World||Russell 3000|
|Sector Weights||Cambiar||MSCI World||Russell 3000|
Market Review (9.30.2017)
Global equities closed higher in the third quarter, fueled by encouraging economic growth data and solid corporate earnings reports. While growth stocks paced the market in the first two quarters of 2017, value stocks began to make a comeback in the third quarter. September saw a return of the ‘reflation trade’ – as sectors such as financials, industrials and energy all moved higher in tandem with rising yields, higher oil prices and improving global growth data.
As we transition into the final quarter of 2017, international equities are poised to outperform the U.S. markets for the first calendar year since 2012. Valuations have moved higher on a global basis, resulting in increased emphasis on price sensitivity at the individual stock level. Although Cambiar continues to find attractive investment opportunities in the U.S., we believe that international companies have additional tailwinds in the form of a stronger earnings recovery, multiple expansion and generally accommodative central bank monetary policy.
Global Ultra Focus Fund
The Cambiar Global Ultra Focus Fund participated in the 3Q uptrend for equities, but was not able to keep pace with the strategy’s assigned benchmarks. Although the Fund was properly positioned via an overweight allocation to outperforming sectors such as energy and technology, as well as underweight the lagging consumer staples sector, stock selection was the bigger driver to overall Fund performance. On this latter metric, Cambiar’s holdings were positive in the aggregate, but trailed the market for the quarter.
Buy/sell activity during 3Q resulted in a net increase to international companies. As of quarter-end, the Fund had an approximate 60/40 mix to U.S./non-U.S. companies. Cambiar does not attempt to set ranges at the country/regional level; although the Fund has historically had a bias towards U.S. companies, the uptick in international positions is a by-product of perceived risk/reward and where the team is finding more value at this point of the economic cycle.
Given the Fund’s sizable allocation to technology (~27% as of quarter-end), overall performance tends to be more heavily influenced by Cambiar’s stock selection within this sector. For the quarter (as well as on a year-to-date basis), Cambiar’s tech positions have trailed the index – thus detracting from performance. Some of the relative underperformance is understandable; i.e., Cambiar owns ‘value tech’, vs. the higher multiple ‘FANG1’ stocks that have been driving the index. That said, some of the lagging return in the sector has been self-induced, as positions such as Synaptics and Diebold have not performed as expected. In both cases, Synaptics and Diebold met many of Cambiar’s criteria – strong balance sheets, market leadership in their industry, experienced management teams, and reasonable valuations. Unfortunately, these attributes were not sufficient, and the investment case has yet to materialize. Upon review of both positions, Cambiar sold Synaptics in the quarter, and we continue to hold Diebold.
While not representing a material percentage of Fund assets (~5%), healthcare was a bright spot in the quarter. The Fund’s position in Biogen was the top contributor to performance in the quarter, as the stock gained approximately 15% following a solid earnings report. Biogen has de-rated in recent years, as concerns about competition and slowing growth in some of the company’s end markets have weighed on the stock. At current valuations (~13x P/E, 7% free cashflow yield), Cambiar views Biogen to represent an attractive risk/reward; the company continues to have strong marketshare in the multiple sclerosis market, a new treatment for spinal muscular atrophy, as well as a potentially strong pipeline of new therapies.
After a challenging first half of the year, the energy sector rebounded in the third quarter. The uptick in market sentiment towards the sector was largely in response to declining oil inventories in the U.S. – as a continuation of this trend should help to work down the current supply bulge in the oil markets. Although Cambiar had an overweight allocation to energy, the Fund’s holdings in the sector trailed the index for the quarter. Two positions in the oilfield services industry (Superior Energy and Schlumberger) have been weak performers in 2017 – thus hampering returns for the Fund. Upon review, Cambiar liquidated Superior Energy in the quarter, but we continue to hold Schlumberger in light of the company’s leading market position and quality franchise. Schlumberger is positively correlated to activity outside the U.S., which Cambiar believes will begin to rebound in the next 12 months. It is important to note that the Fund’s energy positions do not require heroic assumptions in the oil price to do well, and each holding has a shareholder return policy in the form of dividends.
Global equities have broadly rallied through the first nine months of 2017, with stock averages in the U.S., Japan, Europe and Emerging Markets all trading at 52-week highs. Given positive economic growth data, low volatility, strong corporate profits and lack of attractive investment alternatives, equities appear to be the best house on the block. Although Cambiar remains optimistic as it relates to our companies, we spend equal amounts of time thinking about what could impair the investment case. Complacency and investing are not a good mix.
As always, Cambiar continues to focus the core of our research on company-specific fundamentals. We will also include macro variables into our analysis, to the extent it is relevant to our bottom-up work. One segment of the market we are monitoring is central bank activity, in particular the U.S. Federal Reserve. The U.S. continues to slowly make progress on normalizing monetary policy; we believe the key consideration is whether the markets will be able to digest higher rates, given the absence of inflation. The moves made by the U.S. Fed have a ripple effect on other markets – potentially jeopardizing what has been a synchronized global growth environment.
The Global Ultra Focus Fund was formerly known as the Cambiar Unconstrained Equity Fund.
Mutual fund investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging Markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. With short sales, you risk paying more for a security than you received from its sale. Short sales losses are potentially unlimited and the expenses involved with the shorting strategy may negatively impact the performance of the Fund. Diversification may not protect against market risk. The Cambiar Global Ultra Focus Fund is a non-diversified fund. This material represents the portfolio manager’s opinion and is an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice or a specific recommendation of securities.
To determine if a Fund is an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Fund’s prospectus which can be obtained by clicking here or calling 1-866-777-8227. Please read it carefully before investing. There is no guarantee that the Funds will meet their stated objectives.
Performance data quotes are past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end, please call 1-866-777-8227.
The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. CAMAX was rated against 703 World Large Stock funds over a three year period, 583 funds over a five year period and 320 funds over a ten year period. With respect to these World Stock funds, CAMAX received a rating of 1 stars for the three year, 4 stars for the five year period, and 3 stars for the ten year period respectively. Past performance is no guarantee of future results. Russell 3000 Index returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an Index.
P/E ratio 1 YR Forecast is a calculation that divides the current share price by the estimates of earnings in the next four quarters. Debt/Equity - Long Term is a calculation that takes interest bearing, long-term debt divided by shareholder equity. EPS Growth - Long Term is a calculation that takes the company’s estimated profits for five years divided by the outstanding shares. Alpha is a measure of risk-adjusted performance. Beta is a measure of risk in relation to the market or benchmark. The Sharpe Ratio is a direct measure of reward-to-risk and is calculated by subtracting the risk free rate from the rate of return for a portfolio and dividing the result by the standard deviation. Standard Deviation is a statistical measure of historical volatility; a measure of the extent to which numbers are spread around their average. R-Squared measures how closely a portfolio’s performance correlates with the performance of a benchmark index. These calculations are not a forecast of the Fund’s future performance.
As of 9.30.17, the Cambiar Global Ultra Focus Fund had a 3.8% in Biogen, 2.5% in Diebold, 2.1% in Schlumberger, 0.0% in Amazon, Facebook, Google, Netflix, Superior Energy and Synaptics.
The MSCI World Index is an unmanaged index compiled by Morgan Stanley Capital International. The MSCI World index returns do not reflect any management fees, transaction costs or expenses. The Russell 3000 Index returns do not reflect any management fees, transaction costs or expenses. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity markets. The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock's weight in the Index proportionate to its market value. The S&P 500 returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in the index.
This material represents the portfolio manager’s opinion and is an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice or a specific recommendation of securities.
Cambiar Funds are distributed by SEI Investments Distribution Co., 1 Freedom Valley Dr Oaks, PA 19456, which is not affiliated with the Advisor. Cambiar Funds are available to US investors only. Strategies included within the Institutional Investor offer are not mutual funds and are not affiliated with SEI Investments Distribution Co.