Management Company Overview

In the first half of 2015, the net asset value of Bestinfond (Trades,Portfolio) F.I. increased by 14.06%, to 171.75 euros compared to the year 2014.. The equity of the fund has increased and exceeds the value of 1.4 billion Euros (+9.53%, namely 1,401.06 billion Euros). The number of unit holders decreased by -0.82% to 17,433 up to the end of the semester.

During the first half-year period of 2015, the benchmark index (80% MSCI, 14% IGBM and 6% PSI) has increased by +10.03%, compared to the year 2014. In 2015, the IGBM and the MSCI World Index posted cumulative gains of +4.88% and +10.25% respectively, and the Portuguese PSI +19.21%.

The long-term annual returns of Bestinfond  over the past 10 and 15 years, has been that of +9.28% and +13.56% respectively, compared to that of +4.57% and +3.59% of the benchmark index. Since its inception in 1993, the fund has accumulated an annual return of +16.05%, up to June 2015, compared with that of +9.39% of the benchmark index.

Investment Policy:

As strong believers in the philosophy of value, Bestinver’s sphere of competence lies in the valuation of companies, an activity to which the Management Team dedicates all its efforts. Nevertheless, we take advantage of the short term inefficiencies in the markets to rotate the portfolio in or out of positions, depending on the evolution of the price of each of the companies comprising the portfolio.

Bestinfond (Trades, Portfolio) applies the portfolio model of the management team, which invests 85% in international companies and the remaining 15% in Iberian companies.

The portfolio has had a stable trend throughout the half-year period of 2015, until the recent triggering of the Greek crisis which submerged markets in a situation of significant uncertainty. The macroeconomic environment continues to progress satisfactorily, with a growth rate which is increasing, and the companies in our portfolio continue to advance with their strategic plans.

In relation to changes within the portfolio, we highlight, within the international ambit, the entry within the portfolio of the Danish jewellery company Pandora (OCSE:PNDORA), which has a simple business model with high margins, as well as a strong international position as well as the inclusion of the company Stagecoach (LSE:SGC). We have also included within the portfolio the British real estate company Bovis Homes Group (LSE:BVS) and the supermarket operators Lenta and WM Morrison. In relation to exits from the portfolio, we hereby mention, to name a few, Deere & Co. (DE), Pfizer (NYSE:PFE) and Willis Holding (NYSE:WSH) as part of our aim to reduce our exposure to the United States market, as well as the French company Kering, the British company Tesco and Tianjin Development, which we removed from our portfolio by reasons of our intention to focus on our ambit of competence.

Within the ambit of the Iberian market, during the half-year period of 2015, we have included the companies Aena, Cie Automotive and Barón de Ley within the portfolio. In relation to exits, only the companies Zon Optimus and Pharol, which is the old Portugal Telecom, have been removed from the portfolio. The situation of its main asset, the Brazilian Oi (NYSE:OIBR), continues to be significantly deteriorated by reason of the poor macro-economic trends in Brazil and the significant debts of the company. In order to develop the value of Oi, it would be necessary to carry out a significant capital increase in order to purchase the assets of TIM Brazil. Thereby, certain synergies would be obtained which would justify the current capitalisation. The problem is that the necessary capital increase is so high that it would dilute our portfolio and we would not capture the value creation fruit of the consolidation of the sector. In light of the foregoing degree of uncertainty, we have preferred to sell the entire investment and reinvest said capital in projects with better forecasts and a better profitability and risk profile.

In the first semester of 2015, the target value of Bestinfond e by +8.15% to 244.30 euros per share. The upside potential is at 42%. The price to value ratio means that each euro of value can be acquired for 70 cents. The fund’s VAR at 30 June was 5.09% and that of the benchmark index was 5.88%.

Bestinver Gestión, S.A., SGIIC has exercised its rights to attend and vote at the General Meetings of those Spanish companies in which the funds under its management have held over 1% of the capital stock for more than one year. At all such General Meetings voting was in favor of the resolutions proposed by the Board of each company.

The fund incurs expenses arising from the financial research service on investments included in the intermediation service. This service improves the management of the portfolio.