CV Capital – 30 June 18 update

To my fellow shareholders,

Six months have gone pretty quickly and here we are at our first half year milestone. Overall, I’m pretty excited about the portfolio.  For most of our positions, the stock price has not changed materially since we purchased them and if my thesis plays out then I think the gains are still ahead of us.

Over the past 6 months, I’ve added three new positions to the initial portfolio which was transferred into CV Capital. The rest of the trading were either adding to or selling existing positions. The current elevated market means that there is not that many opportunities available but I continue to be very vigilant and will not lower our standards in selecting stocks.

I have not added any new stocks to the portfolio in June. Currently the portfolio is currently made up of eight positions with two large positions exceeding 20% weighting each, two more positions having weighting between 10%-15% and four positions with weighting less than 10%. I expect our large positions to be diluted when we open for new subscriptions in July (please contact me by 2 July if you are interested in subscribing to more shares). One reason is because I will be transferring more shares from my personal portfolio into the CV Capital. My goal is over time transfer all of my shares into CV Capital but taxation (CGT) consequences mean that I can’t transfer them as quickly as I would like.

Overall, our portfolio fell by 0.7% in June (compared to May) which was mainly caused by two positions; one falling by 11.8% and another position falling 14.7% in June. The portfolio only fell marginally as these were smaller positions in our portfolio. Although I have been reporting CV Capital’s performance on a month end basis, I’ve done it mainly for the purposes of transparency. CV Capital’s objective is to beat the benchmark over the long term (3-5 years) and therefore I place little emphasis on the current performance given the short history.

The table below shows our performance (before taxes) from inception to 30 June 2018. I have not prepared these returns on a compounded basis to make it easier for you to rework the calculations.  Our cash position is circa 11% of the portfolio.

 15 Jan 1830 June 18Gross dividends
(cumulative)
Return (incl
franking)
CV Capital1.001.04904.9%
Benchmark STW56.757.990.790423.7%

 

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