What is value investing? (Spanish with English subtitles)
Dear Friends of the Fund, Please find enclosed our Q2 2022 investor letter for your review. Qualivian reached its four-year mark in December of 2021. We are actively weighing investment proposals. Please refer to our Q2 2022 investor letter for our performance and commentary on the second quarter of 2022. A fact sheet is
Pension funds... Why? (Spanish with English subtitle)
Beltrán Parages, Head of Business Development at azValor, speaks about pensions: Why? When? How? Who? "Pensions remain a pending issue for Spanish people. One has to equip one’s life with financial resources when the working life has come to an end. Right now, we are generating resources. In general, we fortunately have work in Spain and we are able to generate savings that we will eventually have to use when we no longer earn money. Unfortunately, the Spanish pension system was designed for a series of public benefits, and these benefits continue in crescendo. To this day, state pensions in Spain have reached over 10% of GDP. If we continue with these life expectancy rates and people entering the labor market, the pension provision may reach up to 40% of GDP. In other words, public pensions are clearly and absolutely insufficient. And this is something that not everyone knows. Therefore, it is absolutely necessary to start supplying private pension systems and generating savings that we will be able to use and defray our maintenance when we stop working".
How do we invest in value? (Spanish with English subtitles)
Sergio Fernández-Pacheco, Chief Financial and Operating Officer at azValor, explains the process of investing in 'value'. "There are some essential traits of the ideal investor, a typology that I shall discuss later, but what we like most, what we require of investors, is that they share we us the long-term investment philosophy. We recommend that our investors have the patience to weather the storm of stock markets. We consider this minimum holding period of our funds should be of, at least, five years".
What is azValor? (Spanish with English subtitles)
Beltrán Parages, Head of Business Development and Investor Relations of azValor: "azValor is an independent Spanish asset management boutique, born due to the vocation and the vision of a series of professionals who worked together for some years, who experienced a huge professional success and, motivated by the circumstances, we decided to create azValor in 2015. Beyond that, in azValor, the passion for investment in a somewhat special way –which is value investing, seeking the fundamentals of the companies that we invest in– combines with the service vocation we have with all our co-investors".
What vehicles do savers or investors have to place their money? (Spanish with English subtitles)
Sergio Fernández-Pacheco, Chief Financial and Operating Officer at azValor, speaks about financial products: "Investors, savers, can make their choices from a very wide range of products. If we put them in order according to the level of risk or the level of investor sophistication, we could start from the more classic products –an interest-bearing account, a demand account, deposits– then we would move on to products that can yield a slightly higher return and are guaranteed –such as guaranteed funds–, there is direct investment in shares, and direct investment in both public and private fixed income, and finally packaged products –which may be investment funds, discretionally-managed portfolios or advised portfolios– in whose frameworks there may be, as underlying assets, a combination of equity assets or fixed income assets. There are many possibilities of investment".
Equities versus Fixed Income (Spanish with English subtitles)
Álvaro Guzmán de Lázaro, Chief Investment Officer at azValor, explains the differences between investing in equities or in fixed income. "Fixed income is made up of many instruments, but let’s take government bonds as an example. A Spanish government bond, a German government bond, is an instrument where the person investing –let’s say– puts 100 euros, receives an interest every year –say, 1.5 euros– and at the end of the period when the bond matures –5 years– he gets his 100 euros back. In theory, this does not entail any risks. You invest 100 euros, you receive 1.5 every year –or whatever the rate of the bond may be– and then you get your 100 euros back. Fixed income is said to have no risks. However, when you buy a share, you are buying a small piece of a business. In the end, you own the piece of the business that is left –or the piece of the profits that are left– after paying suppliers, employees, creditors, and the corresponding taxes to the government. These profits fluctuate for countless reasons: due to the economic cycle, because a sector becomes fashionable, or goes out of fashion, because there is a competitor that does things better than you and you lose money… What the shareholder gets is the remainder after all these expenses are subtracted. For this reason, it is said that, because profits fluctuate, shares are very risky".
Quarterly letter to investors 3Q2017 (Spanish with English subtitles)
Álvaro Guzmán de Lázaro, Chief Investment Officer at azValor, presents the quarterly letter to investors. https://www.azvalor.com/news/pdf/7b53...
What does MiFID II entail? (Spanish with English subtitles)
Sergio Fernández-Pacheco, Chief Financial and Operating Officer at azValor, speaks about MiFID II, the new financial regulation that came into force in January 2018. "MiFID is a European directive on markets and financial instruments, and MiFID II is simply an updated version of a regulation which is already in force, but in its initial version. The main purpose of this directive is harmonizing at European level all the regulations affecting financial products and markets, as well as the relationship between investors and the entities providing them investment services. It will affect many aspects of financial activity: marketing, execution, the way in which consultancy services are provided, discretionary portfolio management, transparency… It will have a very significant impact on the industry".
How good is our financial education? (Spanish with English subtitles)
Fernando Bernad, Deputy Chief Investment Officer at azValor, speaks about the general lack of knowledge in terms of 'financial education': "I believe there is a general lack of knowledge about the characteristics and the real attributes of certain savings products. Some have been considered to be –or are considered to be– a so-called “fraud”. Others don’t even need to be put in between quotation marks. There are many examples. Preferred shares, certainly. The risks and what this savings product involved were completely misunderstood. The popular and famous guaranteed funds, from a point of view of value for money, were also a fraud in my opinion. And, in general, many investment funds that are basically passively-managed investment funds, somehow undercover and charging very high management fees. The difference between active management and passive management is increasingly apparent today, as well as the fact that passive management is a perfectly valid alternative, but at a decent cost".
The Value Manager (Spanish with English subtitles)
Fernando Bernad, Deputy Chief Investment Officer at azValor, speaks about the role of the Value Manager: "In my opinion, the most important thing to understand what value investing requires is to take into account it is a very tough process. It is a process that, above all, requires some character traits which consist in having a certain aptitude for suffering. This is what I feel separates a minority from the vast majority. You have to be capable of being the last to later become the first. You have to withstand market slumps, and that is when you have to show patience. You mustn’t sell when you get scared. You must learn to be alone, in the sense of going against the tide; look for investment opportunities where there are problems; approach those places people run away from. We are, almost by nature, contrarian investors".
Types of investment funds (Spanish with English subtitles)
Beltrán Parages, Head of Investor Relations and Business Development at azValor, goes ahead the explanation of the concept of 'investment funds': "An investment fund is a collective investment institution whereby any investor may select a professional to access any type of asset trading in regulated markets, in a very efficient manner, with an extraordinary legal protection, and benefiting from the economies of scale of being many investors involved."