The Citywire A-rated pair co-run the Invesco Global Leisure fund, which has $940 million in assets and focuses on stocks involved in the design, production and delivery of products or services related to the leisure industry.
Houston-based Cohen and Hartsfield have returned 144.4% over the five years to the end of January 2018, which puts them first in absolute terms out of the 20 fund managers operating with a five-year track record.
The average of these returned 61.4% over the same timeframe in US dollars. This is while the most commonly held benchmark, the MSCI World/Consumer Discretionary TR, rose 115% over the same timeframe.
The duo have consistently outshone their peers, of which there are now 41 fund managers boasting at least one year’s track record. In 2013/14, the duo had their best period of outperformance, returning 34.3% at a time when the average of the 37 managers then active in the sector returned just 11.7%.
They have also managed to stay ahead of the pack during periods of difficulty. In the period of January 2015 to January 2016, the average manager lost 7.5%, while Cohen and Hartsfield limited losses to 6.6% over the same period.
Dealing with disruption
In their most recent outlook, the pair set out their current mission statement as being one focused on disruptive influences on consumption and leisure. ‘We believe that we are in a period of disruption, where consumer habits are rapidly changing with the introduction of new technology.
‘Technology is changing where we shop, how we shop, how we consume media, how we spend our time, how we travel, and as a result: how we spend our discretionary income. These changes are global, not regional, and technology is removing many of the barriers for global commerce while this is happening.’
In terms of investment, this has drawn Cohen and Hartsfield into areas such as software, which sits outside their consumer discretionary index, where they have 18% of their overall allocation.
This is represented in their portfolio through video gaming firms such as Take-Two Interactive, Nintendo, Electronic Arts and Ubisoft, which are all top 10 positions. This exposure has dampened recent performance, but remains a major allocation in the fund overall.
Other sectors of interest include hotels and restaurants (15%) and generally media (15%), albeit with media being a minor underweight to the benchmark. The single largest position is tech giant Amazon, which makes up 9.8% of the fund, according to the January data.
The fund has an overwhelming bias to the US – with 74% allocated against a 61% benchmark bet – but emerging market ideas are creeping in as well. This is represented by significant overweights to Brazil, China, Macau and Russia.