The Mercator International Opportunity Fund

Investor Summary

Hervé van Caloen served as Portfolio Manager and CIO with over 30 years of experience managing international equity portfolios. Starting his career as an analyst at Scudder, Stevens and Clark in 1985 when global investing was still in its infancy, van Caloen became portfolio manager of the Scudder Variable Life International Fund and later launched The PaineWebber Europe Growth Fund, the first mutual fund specializing in both Western Europe and former communist countries of central Europe. In the mid 1990s, van Caloen led the international investment effort at Provident Capital Management and later served as First Vice President of Schroders in New York. He has served as portfolio manager of Mercator since its creation in 2018, bringing deep expertise in international markets and contrarian value investing strategies.

Fund Strategy

The investment objective of the Mercator International Opportunity Fund is to generate long term capital gains by investing in a geographically diverse portfolio of foreign equities. Mercator Investment Management invests in wealth creators outside of the United States, identifying public companies around the world that enjoy secular growth through fundamentals informed by bottom-up research while understanding the cultural, political, and economic environments in which they operate. The fund employs opportunistic and contrarian investing with thematic and bottom-up research, letting winners run and maintaining very low portfolio turnover. The Fund invests at least 40% of its assets in securities of companies domiciled outside the United States, focusing on transformative companies, corporations that offer steady growth and trade at a reasonable price (GARP stocks) and turnaround situations.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
-	-3%	-3.9%

Executive Summary

The Mercator International Opportunity Fund employs an opportunistic and contrarian approach to investing in developed international markets, focusing on companies listed in MSCI EAFE countries. The fund's strategy centers on thematic and bottom-up fundamental research, with management believing that stock prices follow business performance over the long term, making short-term market fluctuations less relevant. The portfolio maintains very low turnover by letting winners run, reflecting a patient capital approach. Top holdings include technology and semiconductor companies like MercadoLibre, ASM International, and BE Semiconductor Industries, alongside consumer discretionary names like Future PLC and Brunello Cucinelli. The fund has generated a 2.45% annualized return since inception in April 2018, though it has experienced significant volatility including a maximum drawdown of 55.96%. The strategy targets long-term capital appreciation through geographic diversification across developed markets, with minimum investments of $1,000 for Class I shares.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 31 2024	2024 Q2	ASM, BC.MI, BESI, FUTR.L, MELI	Bottom-up, contrarian, Developed Markets, EAFE, international	-	International developed markets fund employing contrarian, bottom-up research with thematic focus. Very low turnover strategy letting winners run, concentrated in technology and consumer discretionary names. Generated 2.45% annualized returns since 2018 inception despite high volatility. Geographic diversification across EAFE markets with patient capital approach targeting long-term appreciation.
Apr 15 2024	2024 Q1	4755.T, 6920.T, 8035.T, MELI, WOSG.L	contrarian, E-Commerce, international, Japan, semiconductors	-	International equity fund employing contrarian investing across MSCI EAFE markets. Concentrated portfolio led by semiconductor exposure in Japan and Latin American e-commerce. Low turnover strategy focuses on long-term business performance over short-term volatility. Experienced manager with 30+ years in international markets targets capital appreciation through thematic research and bottom-up selection.
Jan 17 2024	2023 Q4	-	ETFs, Europe, growth, international, Japan, rates, value	-	Mercator returned 11.12% in 2023 as international markets remain neglected and trade at historic discounts. ETF-driven selling has created attractive valuations for fundamentally strong growth companies. European rate cuts and pro-business political changes plus Japan's comeback driven by weak yen and semiconductor initiatives present compelling opportunities for patient long-term investors.
Sep 30 2023	2023 Q3	AIXA.DE, CRESY, MELI, WOSG.L	contrarian, EAFE, international, semiconductors, thematic	-	International equity fund employing contrarian and thematic investing across EAFE markets. Manager focuses on long-term business fundamentals with low turnover strategy. Current positioning emphasizes technology sectors including semiconductors and software. Top holdings include Mercadolibre and Watches of Switzerland. Strategy designed to capitalize on market inefficiencies through patient, research-driven approach.
Jan 21 2022	2021 Q4	AMZN, GOOG, GOOGL, MELI, META, STM, WRBY	Europe, GARP, growth, Luxury, technology, turnaround	MELI AML.L	Van Caloen delivered 14.27% in 2021 executing a disciplined GARP strategy, selling overpriced tech and buying quality growers like MercadoLibre and European small caps at reasonable valuations. Believes growth with pricing power beats defensive value in stagflationary environment. Portfolio spans e-commerce, luxury turnarounds, and European opportunities with new management teams driving transformation.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 31 2024

2024 Q2

ASM, BC.MI, BESI, FUTR.L, MELI

Bottom-up, contrarian, Developed Markets, EAFE, international

International developed markets fund employing contrarian, bottom-up research with thematic focus. Very low turnover strategy letting winners run, concentrated in technology and consumer discretionary names. Generated 2.45% annualized returns since 2018 inception despite high volatility. Geographic diversification across EAFE markets with patient capital approach targeting long-term appreciation.

Apr 15 2024

2024 Q1

4755.T, 6920.T, 8035.T, MELI, WOSG.L

contrarian, E-Commerce, international, Japan, semiconductors

International equity fund employing contrarian investing across MSCI EAFE markets. Concentrated portfolio led by semiconductor exposure in Japan and Latin American e-commerce. Low turnover strategy focuses on long-term business performance over short-term volatility. Experienced manager with 30+ years in international markets targets capital appreciation through thematic research and bottom-up selection.

Jan 17 2024

2023 Q4

ETFs, Europe, growth, international, Japan, rates, value

Mercator returned 11.12% in 2023 as international markets remain neglected and trade at historic discounts. ETF-driven selling has created attractive valuations for fundamentally strong growth companies. European rate cuts and pro-business political changes plus Japan's comeback driven by weak yen and semiconductor initiatives present compelling opportunities for patient long-term investors.

Sep 30 2023

2023 Q3

AIXA.DE, CRESY, MELI, WOSG.L

contrarian, EAFE, international, semiconductors, thematic

International equity fund employing contrarian and thematic investing across EAFE markets. Manager focuses on long-term business fundamentals with low turnover strategy. Current positioning emphasizes technology sectors including semiconductors and software. Top holdings include Mercadolibre and Watches of Switzerland. Strategy designed to capitalize on market inefficiencies through patient, research-driven approach.

Jan 21 2022

2021 Q4

AMZN, GOOG, GOOGL, MELI, META, STM, WRBY

Europe, GARP, growth, Luxury, technology, turnaround

MELI
AML.L

Van Caloen delivered 14.27% in 2021 executing a disciplined GARP strategy, selling overpriced tech and buying quality growers like MercadoLibre and European small caps at reasonable valuations. Believes growth with pricing power beats defensive value in stagflationary environment. Portfolio spans e-commerce, luxury turnarounds, and European opportunities with new management teams driving transformation.

QUARTER	THEMES	TAGS
2024 Q1	Semiconductors The fund has significant exposure to semiconductor companies including Tokyo Electron Ltd and Lasertec Corp, representing over 13% of the portfolio in semiconductor-related holdings.	Semi Equipment Semiconductors Japan
	E-commerce Mercadolibre represents the largest holding at nearly 5% of the portfolio, reflecting exposure to Latin American e-commerce growth.	Marketplaces Latin America Growth
2023 Q4	ETFs ETFs and momentum investing magnify market moves and create indiscriminate selling. ETFs have the obligation to sell the baby with the bathwater, leading to attractive valuations for fundamentally strong companies.	ETFs Momentum Selling Valuations
	Rates Interest rates were the major factor influencing stock prices in 2023. The apparent end of Fed rate hikes in November propelled the fund's performance. European Central Bank expected to lead the coming cycle of rate cuts.	Interest Rates Fed ECB Monetary Policy
	Europe Europe is experiencing political upheaval with traditional parties under pressure from conservative movements. New conservative parties favor more pragmatic approaches to business with fewer constraints and lower fiscal pressure, which could benefit growth and profitability.	Politics Conservative Regulation Business
	Japan Japan is experiencing a comeback driven by weak yen making exports competitive, government initiative to regain semiconductor dominance, and improved corporate governance. The Nikkei is about to break through its 1989 all-time high.	Yen Exports Semiconductors Governance Nikkei
2021 Q4	Growth Manager advocates for growth at reasonable price (GARP) strategy, selling overpriced growth stocks and buying reasonably priced growers. Believes growth is preferable to value in stagflationary environment due to pricing power advantages.	GARP Valuation Pricing Power
	E-commerce Accumulated position in MercadoLibre after 40% decline from peak, viewing it as opportunity created by sentiment shift. Also invested in Mister Spex as European equivalent to Warby Parker at attractive valuation.	MercadoLibre Online Retail Latin America
	Semiconductors Reduced exposure to overpriced semiconductor names including Infineon, STM, and ASM International throughout the year. Monitoring closely for potential re-entry as valuations have corrected.	Chip Equipment Valuation Europe
	Luxury Invested in turnaround stories Aston Martin and Hugo Boss, both iconic brands with new management. Aston Martin backed by deep-pocketed owner aiming to emulate Ferrari, while Hugo Boss repositioning from business suits to casual wear.	Turnaround Brand Value Management

QUARTER

THEMES

Semiconductors

The fund has significant exposure to semiconductor companies including Tokyo Electron Ltd and Lasertec Corp, representing over 13% of the portfolio in semiconductor-related holdings.

Semi Equipment Semiconductors Japan

E-commerce

Mercadolibre represents the largest holding at nearly 5% of the portfolio, reflecting exposure to Latin American e-commerce growth.

Marketplaces Latin America Growth

2023 Q4

ETFs

ETFs and momentum investing magnify market moves and create indiscriminate selling. ETFs have the obligation to sell the baby with the bathwater, leading to attractive valuations for fundamentally strong companies.

ETFs Momentum Selling Valuations

Rates

Interest rates were the major factor influencing stock prices in 2023. The apparent end of Fed rate hikes in November propelled the fund's performance. European Central Bank expected to lead the coming cycle of rate cuts.

Interest Rates Fed ECB Monetary Policy

Europe

Europe is experiencing political upheaval with traditional parties under pressure from conservative movements. New conservative parties favor more pragmatic approaches to business with fewer constraints and lower fiscal pressure, which could benefit growth and profitability.

Politics Conservative Regulation Business

Japan

Japan is experiencing a comeback driven by weak yen making exports competitive, government initiative to regain semiconductor dominance, and improved corporate governance. The Nikkei is about to break through its 1989 all-time high.

Yen Exports Semiconductors Governance Nikkei

2021 Q4

Growth

Manager advocates for growth at reasonable price (GARP) strategy, selling overpriced growth stocks and buying reasonably priced growers. Believes growth is preferable to value in stagflationary environment due to pricing power advantages.

GARP Valuation Pricing Power

E-commerce

Accumulated position in MercadoLibre after 40% decline from peak, viewing it as opportunity created by sentiment shift. Also invested in Mister Spex as European equivalent to Warby Parker at attractive valuation.

MercadoLibre Online Retail Latin America

Semiconductors

Reduced exposure to overpriced semiconductor names including Infineon, STM, and ASM International throughout the year. Monitoring closely for potential re-entry as valuations have corrected.

Chip Equipment Valuation Europe

Luxury

Invested in turnaround stories Aston Martin and Hugo Boss, both iconic brands with new management. Aston Martin backed by deep-pocketed owner aiming to emulate Ferrari, while Hugo Boss repositioning from business suits to casual wear.

Turnaround Brand Value Management

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Jan 21, 2022	Fund Letters	The Mercator International Opportunity Fund	MELI	MercadoLibre	Internet Retail	Internet & Direct Marketing Retail	Bull	NASDAQ	e-commerce, Fintech, growth, Latin America, market correction, secular trends, value opportunity	Login
Jan 21, 2022	Fund Letters	The Mercator International Opportunity Fund	-	Mister Spex	Specialty Retail	Specialty Retail	Bull	-	Europe, Eyewear, GARP, growth, Omnichannel, online retail, valuation arbitrage	Login
Jan 21, 2022	Fund Letters	The Mercator International Opportunity Fund	AML.L	Aston Martin Lagonda	Auto Manufacturers	Automobile Manufacturers	Bull	New York Stock Exchange	British Brand, Formula 1, Luxury Automotive, new management, Partnership, turnaround	Login
Jan 21, 2022	Fund Letters	The Mercator International Opportunity Fund	-	Hugo Boss	Apparel Manufacturing	Textiles, Apparel & Luxury Goods	Bull	-	Brand Repositioning, Casual Wear, fashion, German Brand, new management, turnaround	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Jan 21, 2022

Fund Letters

The Mercator International Opportunity Fund

MELI

MercadoLibre

Internet Retail

Internet & Direct Marketing Retail

Bull

NASDAQ

e-commerce, Fintech, growth, Latin America, market correction, secular trends, value opportunity

Jan 21, 2022

Fund Letters

The Mercator International Opportunity Fund

Mister Spex

Specialty Retail

Bull

Europe, Eyewear, GARP, growth, Omnichannel, online retail, valuation arbitrage

Jan 21, 2022

Fund Letters

The Mercator International Opportunity Fund

AML.L

Aston Martin Lagonda

Auto Manufacturers

Automobile Manufacturers

Bull

New York Stock Exchange

British Brand, Formula 1, Luxury Automotive, new management, Partnership, turnaround

Jan 21, 2022

Fund Letters

The Mercator International Opportunity Fund

Hugo Boss

Apparel Manufacturing

Textiles, Apparel & Luxury Goods

Bull

Brand Repositioning, Casual Wear, fashion, German Brand, new management, turnaround

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Herve van Caloen

The Mercator International Opportunity Fund

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2024

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Semiconductors

E-commerce

ETFs

Rates

Europe

Japan

Growth

E-commerce

Semiconductors

Luxury

Investor Pitches

Current Portfolio as of ( 30th June 2024 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Herve van Caloen Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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The Mercator International Opportunity Fund