7/31/2019 Microequities Deep Value Microcap Fund February 2012 update

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M I C R O E Q U I T I E S A S S E T M A N A G E M E N T  

A F S L 2 8 7 5 2 6

Suite 702, 109 Pitt Street Sydney NSW 2000  Office: +61 2 9231 6169 Fax: +61 2 9475 1156 invest@microequities.com.au 

DEEP VALUE MICROCAP FUND UPDATE, FEBERUARY 2012 PERFORMANCE UPDATE

Dear Investor,

3rd

Year Anniversary, Deep Value Microcap Fund hits new all time high, record outperformance

During the month of February the Deep Value Microcap Fund posted strong gains of 6.76% versus 2.41% for the Accumulated All

Ordinaries Index. Including distributions the Deep Value Microcap Fund is now 4.25% above its previous all time high. The All

Ordinaries Accumulated Index is still 7.26% below its previous high in March 2011. The new all time high means every single

investor in our Deep Value Microcap Fund is making a positive return.

Our Deep Value Microcap Fund has just turned three. It’s been three years since inception, and it’s a timely point to review our

progress. Since we started, the All Ordinaries Accumulated Index (which includes capital growth and dividend income) has

returned 59.30% versus the Deep Value Microcap Fund, which has returned 128.04%. That is more than double the return of our

reference benchmark. We have also consistently outperformed the index in 2009, 2010 and 2011. In those three years, our

portfolio faced differing market conditions; 2009 was a bull market, 2010 was a flat market, and 2011 was bear market. Our

observance of our investment principles, our value approach and our long term view of business partnership has provided our

investors (which I am one of) a consistent performance. Three years on, I am just as excited about our future. We hold 15 quality

businesses that we believe will continue to grow their earnings in the years to come. We think they will grow faster than otherbusinesses around them. These 15 businesses are driven by competent, smart management teams; their respective CEO’s carry

their office in their shareholders best interest. There will be bumps along the road, not all is foreseeable, external unpredictable

forces sometimes arise with unexpected consequences, but not one of these businesses is currently overvalued. All of our

invested businesses have legitimate and sound growth prospects. We will continue to own these excellent businesses into the

future. 

Microequities Deep Value Microcap Fund returned a positive +6.76% versus the All Ordinaries Accumulation Index positive

+2.41% in February; this brings the total return net of fees to 128.04% for the Fund compared to 59.30% for the All Ords

Accumulation since inception in March 2009.

The Fund’s cash position has been deliberately drawn down as a stake in one of the companies owned by the Fund was

increased. Cash position will increase over the next months due to committed investment inflow (including a top up from me)

and dividend income.

Written by Carlos Gil, Chief Investment Officer. 

*Deep Value Portfolio as of 29th

of February 2012

1.1%

41.1%

6.4%7.8%

16.2%

9.2%

11.1%

2.8% 4.3% Cash

Software & Services

Telecommunications Services

Hotels Restaurants & Leisure

Media

Health Equipment & Services

Comercial Services & Supplies

Diversified Financials

Utilities

Latest Unit Price

$2.0117Latest Fund Performance as at February 29, 2012

FUND AOAI* OP* 

1 Month +6.76% +2.41%  +4.35%

3 Month +11.74% +6.07% +5.68%

6 Month +11.84% +2.88%  +8.95%

12 Month +4.25% -6.67% +10.92%

2 yrs comp pa +8.59%  +1.42%  +7.18%

3 yrs comp pa +31.62% +16.79% +14.83%

Inception +128.04%  +59.30% +68.74%

(Returns are calculated after all fees and expenses and

reinvestment of distributions. Inception of Fund March 2009)

*AOAI: All Ordinaries Accumulation Index. *OP: Out-

performance.Past performance is not indicative of future performance.