An excellent start for A&F Investments in 2017

The first quarter of 2017 ended with great returns on all stock markets. For example, the Dutch AEX Index increased by 6.65% over the past 3 months, whilst it usually takes a whole year to get such a return for this index, looking at its historical performance. The portfolio of A&F investments performed nicely, but our large position in cash led to a small underperformance compared to the benchmark, in terms of return. Nevertheless we are proud on our performance, because our portfolio is less volatile then the benchmark as well. Just like the Dow Jones Index, we were able to reach several all-time highs during this quarter!

Amongst many others, Sif Holding and Apple were our best-performing stocks, leading us to the decision to close our positions with an impressive profit. We had a long position in Apple for more than 3 years, so a quick look at the historical performance and dividends after 2013 gives an indication of the high total return. On the contrary, a more painful moment was Intel’s offer for Mobileye, because we sold our position in Mobileye due to the incredibly high expectations and the absence of significant takeover speculations. An expensive lesson for all members is, that patience is an important virtue for an investor. The empty spots in our portfolio have been replaced by an investment in the medical marihuana business and in Nedap, after an impressive and convincing CFA-Pitch by Canberk Hallik. Furthermore we hedged our portfolio against a short-term market collapse by buying an inverse S&P500 ETF and a small short position in Caterpillar, because we don’t believe that this company will improve their earnings enough, especially not after the federal tax raids last month. Stocks in the United States are expensive with an eye on the rate-hikes, and political uncertainties are seen as important factors for a downward shift of the markets.

As every other quarter, there was room for some additional (in)formal activities. In the end of January, the committee visited the LaTrappe brewery, to learn more about the life within the monastery and the unique production process of their beers. On top of that, we were given a presentation on valuation methods by our partner Rembrandt Fusies & Overnames, and a team of 5 members participated in the ‘Battle of the investment clubs’, organized by Kempen & Co. On the last day of the quarter, we visited our partner IBS Capital Allies in Amsterdam, where the CEO, CIO, and a portfolio manager gave us a presentation on their investment strategy, followed by an amazing dinner at one of their private equity investments, the steak-specialist Loetje. The committee will keep searching for the best investments to continue/enhance the positive trend.