The Endeavour Fund

Confidence with caution

The Endeavour Fund

Confidence with caution

Capital growth with less of the volatility of equities

Fund Managers

Joe Bunting

Joe Bunting

Founder Managing Partner & co-CIO

Christoph Wiedebach

Christoph Wiedebach

Co-Founder Partner, CIO & Head of Research

Cranley Macfarlane

Cranley Macfarlane

Portfolio Management & Investment Research

Investment Objective: To target capital growth with less of the volatility of global equities at a rate of 3-4% in excess of a composite target benchmark over a five year period; net of fees.

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Target Benchmark: This is a benchmark unique to Tellsons and FTSE Russell to incorporate the ‘risklessness’ of UK government bonds as well as the ever-present risks of inflation. It comprises 50% UK CPI five-year average and 50% UK Conventional Gilts up to five years index; and volatility vs MSCI World GBP Hedged (See Explanatory Notes).

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Investment Philosophy: We believe growth equity investments can often come with too much volatility on their own, making it an uncomfortable ride for many investors forcing them to give up on their long-term investment plans. We seek to reduce much of that volatility by combining growth with income yielding investments and downside protective strategies to reduce volatility in times of market stress.

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Investment Process: Minimum 80% invested in global equities and corporate bonds whilst seeking to reduce volatility by investing in government bonds, instruments with exposure to precious metals, unhedged foreign currency and the use of derivatives for efficient portfolio managements purposes, including hedging to reduce risk.

Four concentrated investment themes

The Fund Managers select investments for four highly concentrated sub-portfolios to deliver the overall fund objective.

These comprise 10-20 best ideas for Secular Thematic Growth, Defensive Strength, Cyclical Leadership and less or negatively correlated Protective strategies.

Different risk and return profiles within global equity investments are combined with income-generating corporate and government bonds, ‘safe haven’ precious metals exposures and some limited unhedged foreign currency – these have lower and sometimes even negative correlations to equity investments, meaning they can move in opposite directions.

These ‘safe haven’ protective strategies can help reduce losses in equities when markets experience their frequent bouts of volatility and stress.

Chart 1. Here the concentrated investment themes are represented with expected return objectives and weighted asset allocations through the investment horizon of the typical business cycle normally around five years from peak to trough. So the weights of these allocations can vary 5-10% at different times.

*EPM: Efficient Portfolio Management use of derivatives for hedging purposes to reduce risk.

Building the portfolio

The Fund Managers each bring decades of experience from different corners of the investment markets.

They combine their different skills and analytical approaches into one integrated Endeavour process:
to combine higher risk equity investments for growth upside with lower risk bond and other diversifying investments to protect from the worst market downside.

Tellsons’ own in-house process, PETRA, is used as a fundamental bottom-up framework for assessing risk-adjusted returns between investments and across asset classes at different stages of the business cycle.

Chart 2. This chart illustrates the annualised returns of each asset allocation on a fully-weighted basis, as if fully invested portfolios in their own right, since the inception of the Fund until the most recent calendar year. These numbers are gross of fees and costs and are therefore only an indication of realised returns.

Source: Bloomberg, Tellsons, from 02.03.14 to 31.12.21. Annualised returns gross of fees/costs, local currency.

Confidence with Caution – Protecting the downside

Confidence with caution is the guiding principle for the EF Tellsons Endeavour Fund managers as they seek to achieve a steadier risk and return performance profile.

Since the public inception of the Fund in 2014, the Fund Managers have been able to protect their fellow investors from almost 80% of the worst equity market losses on average – a period navigating some of the most volatile markets in generations.

Chart 3. The chart illustrated highlights the 74% downside protection on average that the Endeavour Fund has offered investors in the worst equity market falls since inception.

Source: Bloomberg, from 03.02.14 to 05.31.22, Total Return net of fees/costs.
Periodic market declines may extend beyond the calendar month and defined as periods where the World Equity (MSCI World £ hedged index) dropped more than -5%. The periods start from the beginning of the fall in price and terminate at the lowest point (trough) before subsequent recovery.

Read our latest Factsheets, Insights and Sustainability approach below:

Insights

Factsheets

Sustainability

Fund and Manager Ratings are available via the links to free, public access websites below:

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