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BL American Smaller Companies

Equity funds

Data as of 17/01/2020

Risk level

Low High
Recommended investment horizon : > 10 years

Performance

Average annual performance since launch 13,89 %

Performance as at 17/01/2020

FUNDS
2017 20,59 %
2018 0,87 %
2019 27,09 %
Since 01/01/2020 2,12 %
Over the last 12 months 23,46 %
Over 3 years 54,81 %
Since launch 72,07 %
Breakdown by currency
USD 97,43 %
CAD 2,30 %
EUR 0,27 %

Strategy

Investment objective and policy

BL-American Smaller Companies invests up to 80% of its assets in shares of American companies with a market capitalization below 20 billion USD. Selected companies have a well-defined business model with a clear market strategy. The fund invests in companies with a strong competitive advantage, showing a sustainable superior return profile and generating high and consistent levels of free-cash flow. In combination with a solid financial situation. Investment decisions are based on strict valuation and quality criteria.

Management report - 3d Quarter 2019

The last quarter was marked by a continued slowdown in the global economic data, offset by further monetary easing from the US and Europe. In the US, the Federal Reserve (Fed) cut interest rates in July and September in an attempt to prolong the economic expansion in the face of a slowdown. In this environment the BL-American Smaller Companies Fund (retail share class capitalization net of fees in USD) outperformed its Benchmark, the MSCI US Small + Mid Cap NR USD Index, by 0.03%. In absolute terms, the fund showed a negative performance of 0,38%. During the period under review, we initiated a position in SiteOne Landscape Supply. The company is the largest specialty distributor serving the landscape supply industry, with approximately 11% share of a $19+ billion market. With $2.11 billion in 2018 sales, SiteOne is 4 times larger than its next biggest competitor and as big as No. 2-10 combined. The company offers over 120k SKUs primarily to residential and commercial landscape professionals, with a base of over 230,000 customers and no customer accounting for greater than 2% of sales. We believe the business model is similar to other specialty distributors, like Pool or Watsco, just in their 2nd innings. Siteone is the only player with national footprint and the only consolidator in the landscape supply industry. The very experienced management team has a history of running a roll-up. Organic growth should benefit from recurring revenue streams and favorable secular trends towards increased "backyard" investment, with share gains via new markets, additional products, and advantages of scale. There are also opportunities for significant margin expansion via pricing, category management and supply chain initiatives driving solid mid-teens contribution margins that in our viewpoint to eventual double-digit EBITDA margins - similar to longer-term targets at other industry peers. SiteOne has the margin-enhancement initiatives at SiteOne as "Distribution 101," that is, implementing proven tools and processes used by leading distributors for years. Management has a stated goal of 10% EBITDA margins over the next several years and an informal outlook which could reach into the low teens, which we believe should be achievable. On the other hand, we sold our entire position in Healthcare Services Group. The top 5 contributors in the quarter were Lamb Weston, Resmed, Tyler Technologies, Burlington Stores and Chemed. The top 5 detractors were Align Technology, Ulta Beauty, IFF, Tractor Supply and Healthcare Services Group.

General information

Net Asset Value 
Calculated Every business day
NAV class B capitalisation shares (17/01/2020) 172,60 USD
CODES Internal capitalisation code : 29339088
ISIN capitalisation code : LU1305478775
WKN capitalisation code : A1421A
Net assets (million) 320,11 USD
Launch date 13/11/2015