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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Hosking Partners 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Hosking Partners)

Primary Source Intelligence • Q2 2024 Letter Analysis

Hosking Partners Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Hosking Partners. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Digest Analysis

Quick Take

"Hosking Partners runs a contrarian global strategy with 84% active share, significantly underweight US and technology."

Executive Summary

Hosking Partners delivered strong relative performance of just under 5% over twelve months despite falling behind by 0.6% in Q2 2024. The quarter was mixed with strong start and finish generating 3.2% relative performance offset by a four-week period of -3.9% net return. The strategy maintains high active share of 84% with significant underweights to US markets and technology while running a diversified portfolio of 350 names. Key detractors included underweights to Apple and Nvidia, though the fund maintains selective AI exposure through holdings in Nvidia, Broadcom, Micron and SK Hynix. Top contributors included value plays Hafnia and Anglo American trading at discounts to replacement value. The fund added to financial services and initiated position in Argentine farmland operator Cresud while taking profits in shipping and semiconductors. Looking forward, the manager sees exciting potential when markets eventually broaden away from current concentration, dollar weakens, and value is re-rated, with the contrarian strategy well-positioned for various market conditions.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

The fund demonstrates moderate-high conviction through concentrated underweights to major benchmark components (Apple, US exposure), specific investment theses for individual holdings like Broadcom's capital allocation and 3i's scale economies, and willingness to maintain contrarian positioning despite short-term underperformance. The 350-name portfolio with clear rationales for major positions supports this score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about future opportunities when markets broaden and value re-rates, but acknowledges current challenging conditions with concentrated market leadership and various election uncertainties. The outlook is constructive but tempered by near-term headwinds.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The fund maintains significant underweights to US (21.5% below benchmark) and technology (15.4% underweight), indicating defensive positioning relative to market concentration. Taking gradual profits in AI holdings while maintaining selective exposure shows measured risk appetite.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

The quarter showed primarily rotation activity with sales of Kogan recycled into Asos and Alibaba, rotation out of Anglo Platinum while adding to PGM exposure, and taking profits in shipping and semiconductors. Turnover was elevated at 9% but mainly due to new portfolio manager addition rather than net deployment.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The manager is selectively adding to financial services and initiated new position in Cresud while taking profits in shipping and semiconductors. The guidance suggests cautious deployment with rotation rather than aggressive capital deployment.

Language Signal

20%

BearishBullish

Bearish (20%)

Language is balanced with mentions of exciting potential offset by acknowledgment of headwinds, election uncertainties, and current challenging market concentration. More cautious than bullish in directional language overall.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The manager identifies multiple specific risks including election uncertainties across regions, currency weakness in yen despite intervention, geopolitical risks, and policy uncertainty around potential Trump victory. These risks are discussed with meaningful detail but not presented as systemic threats.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The manager sees selective opportunities in financial services, initiated position in Argentine farmland operator, and maintains exposure across diverse geographies and sectors. The 350-name portfolio suggests reasonable opportunity set, though emphasis on selectivity and contrarian positioning indicates measured rather than abundant opportunities.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The fund demonstrates multi-year patience with holdings like Broadcom described as long-standing constituent, willingness to hold through short-term volatility as evidenced by Apple's four-quarter contribution pattern, and positioning for eventual market broadening without specific timeframes. The contrarian strategy implies patience for mean reversion over time.