ABOUT

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Inclusif Value Fund is an exempted company incorporated in the Cayman Islands on 17 March 2017. It is structured as an open-ended investment company with limited liability. 

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The Fund is a student of the market. With more than 10,000 hours of research, reflections and observations of the market, the investment team has distilled a quantitative value approach to equities investing. We focus on long term returns from Asia Pacific equities and operate on the principle that we get paid only when we generate positive returns for investors. Under MAS rules, the fund can only serve Accredited Investors.

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OBJECTIVES

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The investment objective of the Fund is to seek to maximise total returns in terms of capital gains and dividend income over the medium to long term by investing in listed equities predominantly in the Asian region, including Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.

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The Fund is benchmark agnostic and may increase its holding in cash when no suitable investment opportunity avails itself.

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STRATEGY

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We are value investors. That means we take a medium to long-term view and buy into companies which are trading below their fair values. We realise the profit when the price reverts to the value, but the gain is made at the time of purchase because we have exchanged a smaller store of value for a greater one.

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The timing of when the price will revert to fair value is uncertain. So, we make sure we get paid (in dividends) while we wait. Which of the stocks we own will revert to fair value is uncertain as well. So, we make sure we have a big basket of them.

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Ideas for these value stocks are generated in-house, on a continuous basis. We look for the most bombed out stocks, those that most investors will not touch with a 10-foot pole.

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Individual value stocks appear to be more risky to the naive investor, but are, in the aggregate, no riskier than other stocks.

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Value strategies produce better returns, not because they are fundamentally riskier, but because they are contrarian to the "naive" strategies followed by other investors. Naive investors extrapolate poor earnings performance too far into the future, assume a downward trend in stock prices will persist or simply over-react to bad news, leading them to oversell stocks to the point that they are undervalued.

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And when any of our stocks recover to fair value, we will sell it and recycle the capital to other bombed out stocks.

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We are boring individuals with the temperament to relentlessly follow this process over a long period of time, through booms and busts, good economies and bad.

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In implementing the strategy, we make sure we are not over-concentrated in any economy, sector, industry or stock.

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We are super conservative - we buy stocks using only the capital we have, and only sell stocks that we own. In other words, we don't use leverage and we don't do short-selling.

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There is no limit to the amount of cash we can hold. If we can find very few investment opportunities - as in 2007 - we will sit on cash. Our investors are not penalised by a high cash position in the portfolio, since we get paid only on a positive return, not on asset size.

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