Portfolio Manager since 2013
International Small Cap
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YTD Return
Return is shown net of fees. See performance below for additional disclosure.
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Total Assets
Profile
The Cambiar International Small Cap strategy is a diversified portfolio that invests primarily in small-cap companies based outside of the U.S. The starting universe for the strategy includes any international business with a market cap between $500 million to $5 billion. Cambiar’s quality and value bias will result in a portfolio overweight to developed markets, and subsequent underweight in emerging markets.
Portfolio Construction:
- 40-50 International stocks
- Country Limit: 25% (at cost)
- Emerging Markets Limit: 15% (at cost)
Key Facts
- Inception Date
- 6/30/2013
- Minimum
- $20 MM
Portfolio Managers
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Portfolio Manager since 2021
Performance
Inception Date: 6.30.2013. The performance information depicted above represents Cambiar’s International Small Cap Composite. Returns are presented gross (g) and net (n) of management fees. Gross and net returns have been reduced by transaction expenses. Net returns are also reduced by actual investment advisory fees and other expenses that may be incurred in the management of the account. Net of fees performance reflects a blended fee schedule of all accounts within the International Small Cap Composite. Cambiar clients and mutual fund investors may incur actual fee rates that are greater or less than the rate reflected in this performance summary. Results are reported in U.S. dollars.
Performance results for the International Small Cap Composite are evaluated against the MSCI EAFE Small Cap Index. The MSCI EAFE Small Cap Index is a free float-adjusted, market capitalization-weighted index that is designed to measure small cap representation across developed market equity performance, excluding the U.S. & Canada. The index assumes no management, custody, transaction or other expenses. The MSCI EAFE Small Cap Index is a broadly based index that reflects the overall market performance and Cambiar’s returns may not be correlated to the index. The index is unmanaged and one cannot invest directly in an index. Cambiar’s performance and the performance of the MSCI EAFE Small Cap Index include the reinvestment of all income. Benchmark returns are net of withholding taxes. Prior to July 2019, Cambiar typically followed each custodian’s treatment of tax withholding, and therefore dividends may have been presented as gross or net of dividend tax withholding depending on the custodian’s treatment. As of July 2019, Cambiar typically records dividends net of withholding taxes although it may depend on various factors such as the issue country and custodian’s treatment. Withholding taxes may vary according to the investor’s domicile, and other reasons. Performance is preliminary; please contact us for finalized figures. As with any investments, there are risks to be considered. Past performance is no indication of future results.
Performance presented is intended for institutional client use only. For more information, please access our GIPS Reports here.
Composition
Top 10 holdings
Sector Weights (%)
Attributes
RISK STATISTICS
Active Share
Top Countries (%)
Disclosures
Data is provided for a representative account as of March 31, 2021. Portfolio holdings, characteristics, country breakdown, and sector weightings change over time and may differ between clients based upon their investment objectives, financial situations, and risk tolerances. Cambiar makes no warranty, either express or implied, that the weightings shown will be used to manage your account. The securities presented do not represent all of the securities purchased, sold, or recommended by Cambiar and the reader should not assume that investments in the securities identified were or will be profitable. The information provided on the page should not be considered a recommendation to buy or a solicitation to purchase or sell any particular security. There can be no assurance that an investor will earn a profit or not lose money. There can be no assurance that the portfolio will continue to hold the same position in companies described herein, and the portfolio may change any portfolio position at any time. As with any investments, there are risks to be considered. Past performance is no indication of future results.
The one year forecast is included for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Risk statistics are based off a five-year time frame. Portfolio characteristics are based upon third-party sources that are deemed to be reliable, however, Cambiar does not guarantee its accuracy or completeness.
Total Assets represents assets under management for the strategy and are subject to change. Minimums represent intended/proposed minimums for institutional clients and are subject to change.
Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.
Definitions:
Active Share – a holdings-based measure of active management representing the percentage of securities in a portfolio that differ from those in the benchmark index.
Price/Earnings (F1Y) – 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 – a measure of risk-adjusted performance.
Beta – a measure of risk in relation to the market or benchmark.
R-Squared – a measure of how closely a portfolio’s performance correlates with the performance of a benchmark index
Sharpe Ratio – 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 – a statistical measure of historical volatility; a measure of the extent to which numbers are spread around their average.
Commentary
Global Markets – 1Q21 Review
International equities maintained their upward momentum into the first quarter of 2021, with the MSCI EAFE Index posting a return of 3.5%. Below the surface, the rotation from growth to value continued, as the MSCI EAFE Value Index returned 7.4% vs. a loss of -0.6% for the MSCI EAFE Growth Index. The improved sentiment towards pro-cyclical sectors such as Financials, Energy, and Industrials is largely based on the market’s expectation for a sharp earnings recovery as global economies strengthen in the coming quarters. And while growth stocks benefited in 2020 from the low rate environment and relative scarcity of technological goods/services, both of these trends have begun to reverse. Just as an uptick in rates is more damaging to long-duration bonds, rising rates are negative for high growth stocks, as the expected cashflow for these companies is hit harder in a higher discount rate environment.
Inflation and Steepening Yields – False Dawn or Beginning of a Trend?
Market conditions in Europe have taken on a barbell structure in recent years – with investors on one end moving into risk assets in the pursuit of higher returns vs. a crowding into safe haven negative-yielding debt on the other end.
An increasingly relevant question is how will central banks respond to an inflationary bulge resulting from pent-up demand, immense liquidity, supply chain challenges and other fundamental changes in the economy? Yields are rising all over the world, albeit from different levels. The European Central Bank (ECB) remains focused on keeping yields low in the sovereign market to ensure the recovery is not hampered. GDP growth and inflation metrics are also moving higher to varying extents, with expectations rising in the UK/Europe region, although not to the same extent as the U.S. Central banks are almost certainly going to tolerate temporary overshoots of inflation in pursuit of a sustained real recovery. The key takeaway is that inflation expectations are rising for the right reasons – growth expectations are improving, and interest rates (the dependent variable) are also rising as conditions improve.
As opposed to making explicit inflation and interest rate forecasts, the more relevant consideration in Cambiar’s analysis are the potential impacts to our companies’ margin/earnings outlooks should cost pressures arise. One industry that is currently experiencing raw material shortages is semiconductors. This is a notable development, as semis have become increasingly ubiquitous in a wide range of end markets. The current bottleneck is affecting production of PCs, gaming consoles, smartphones and cars – at a time where demand is surging. The increase in lead times will likely lead to higher prices for consumers, as well as missed revenue opportunities at the corporate level. Cambiar continues to focus on companies that possess a defensible margin structure (vs. competing on price), and can offset potential increases in materials or labor costs via pricing power and/or continued productivity improvements.
Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar. Due to market risk and uncertainties, actual events, results, or performance may differ materially from that reflected or contemplated in such forward-looking statements. All information provided is not intended to be, and should not be construed as, investment, legal or tax advice. Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation. Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time, do not represent all of the securities purchased, sold, or recommended by Cambiar, and the reader should not assume that investments in the securities identified and discussed were or will be profitable. As with any investments, there are risks to be considered. All material is provided for informational purposes only and there is no guarantee that the opinions expressed herein will be valid beyond the date of this commentary.
Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts are based upon third-party sources that are deemed reliable; however, Cambiar does not guarantee its accuracy or completeness. As with any investments, there are risks to be considered. Past performance is no indication of future results. All material is provided for informational purposes only and there is no guarantee that any opinions expressed herein will be valid beyond the date of this communication.