In its five-year history, Chenavari Investment Managers’ Toro Capital Fund has never failed to post double-digit returns, and the vehicle is well on its way to doing so again.
Toro rose 2.26% last month—its 31st straight month in the black—and is now up 13.34% on the year, ValueWalk reports. That puts it among HSBC’s top performers this year, a distinction Toro won for its full-year performances in 2010, 2011 and 2012.
The performance—80.12% in 2009, 90.56% in 2010, 24.71% in 2011, 32.42% in 2012 and 32.93% last year—is all the more impressive given that Toro uses no leverage at all in its European asset-backed portfolio.
“The upsurge of anti-European parties at the European parliamentary elections could not derail the growing expectations of potential ECB easing credit measures to kickstart the economic recovery following disappointing European data in May,” Chenavari’s monthly letter said. “We will continue to reduce our peripheral exposure and take advantage of exceptionally strong demand/supply dynamics triggered by the ECB pledge.”
“Although not yet irrational, we feel current valuations on some sectors are no longer driven by fundamental value and therefore warrant a certain degree of caution. We will rebalance towards less-crowded sectors where credit differentiation prevails and will continue to focus on off-the-run sectors, credit-intensive sectors and/or structure.”