Overstone EAFE Equity Fund
A focussed EAFE equity strategy with a classic, contrarian value approach to building long-term value.
Investment objective
The investment objective of the Fund is to attempt to achieve over the long term a total return in excess of that of the MSCI EAFE Index (with net dividends reinvested). The Fund seeks to achieve its objective through investment in a concentrated portfolio of equity and equity-related securities of primarily, but not exclusively, large-sized companies, selected from the major markets (except the U.S. and Canada) and to a lesser extent from emerging markets worldwide.
Fund particulars
Launch date | 17 December 2018 |
Fund size | US$21.2m |
Domicile | Ireland |
Structure | UCITS |
Base currency | USD |
Dealing | Daily |
Min. investment | $ 10,000 |
Benchmarks | MSCI EAFE |
MSCI EAFE Value |
Portfolio managers

Andrew Goodwin

Nigel Waller
Andrew Goodwin
Andrew joined OP in March 2013. He had previously been employed by SVG Capital in London for seven years managing mainly European equity portfolios. Before joining SVG, he held portfolio management positions at Sovereign Asset Management, American Express Asset Management and Phillips & Drew Fund Management. He graduated from Cambridge University. He co-manages the global and EAFE equity portfolios and contributes to the overall investment selection.
Latest publications

Latest publications
Nigel Waller
Nigel is one of the founding partners of OP. He was previously at MLIM for 13 years. He was a director and portfolio manager on the global team. At MLIM he was also a member of the emerging markets and European teams in London and, from 1997 to 1999, the Asia team in Singapore. He graduated from City University. He is Chief Investment Officer and Chief Executive. He co-manages the global and EAFE equity portfolios and contributes to the overall investment selection.
Latest publications

Latest publications
EAFE Equities Strategy
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Commentary
Had you told us a year ago that (a) the world would face a global pandemic on the scale that we have, with the loss of 1.9 million lives worldwide in 2020 and (b) it would lead to huge restrictions on daily life faced by so many across the world and (c) the economic downturns would be among the largest seen in a century then we may have been content to accept a negative return of less than ten percent as the outcome for our fully-invested portfolio.
The last decade has been awful for Value but 2020 proved to be the very worst of all the years and so too for our performance relative to the broad MSCI EAFE benchmark. We are very sorry to report such poor performance but those who attended our December webcast for our Global equity strategy will know we are bullish on the outlook for Value and, by inference, the EAFE portfolio.
We began our December webcast by reviewing the historic level of drawdown for Value versus Growth in 2020. We noted that the catalysts for the prior turns from such extremes over the last 200 years were generally the result of unexpected events that changed the cosy consensus outlook. On 9th November, Pfizer and their development partner BioNTech announced their 95% effective COVID-19 vaccine, a development that took just nine months – something that has never been achieved before. This unexpected announcement appears to have changed the tone of markets with what may be the beginning of a return to Value. In just over eight weeks since this announcement through year-end the portfolio is +18% against MSCI EAFE +12% and MSCI EAFE Value +16%.
For 2020, the largest negative drivers of relative performance in order of impact were Carnival Plc (-83% to sale), Embraer (-65%), Lloyds Bank (-42%), BT Group (-31%) and Bayer (-31%). The largest positive drivers of performance relative to the benchmark were Samsung Electronics (+48%), Siemens (+15%), ABB (+11%), Exor (-3%) and E.ON (0%).
Since the announcement of the Pfizer vaccine the largest positive drivers of the portfolio in order of impact have been Samsung Electronics (+35%), Exor (+31%), Lloyds Bank (+33%), BT Group (+31%), and MHI (+37%). The largest negative drivers of relative performance in order of impact were Sanofi (-6%), E.ON (-2%), Kansai Electric Power (-1%), ABB (+3%) and Mitsubishi UFJ (+7%).
Commentary
In December we sold Japan Airlines and consolidated our airlines position by reinvested the proceeds into easyJet. We did this because we now have sufficient confidence to do so given the announcement of the vaccine and our view that easyJet has sufficient liquidity to see the business through to more normal conditions that will come. Japan Airlines (JAL) returned only +2.5% in US dollar terms during the eight months we held it given the large dilutive share issuance we mentioned last month. Finally, with the exuberance towards technology companies this year finally fed through to Samsung we decided to take some profits on the valuation that is getting closer to our current view of fair value. We used the proceeds to top-up the holding in Bayer.
The rotation out of Growth and into Value that we have seen since early November, although meaningful, is but a blip if Value is just to restore parity to Growth. History has shown us time and time again that this is exactly what happens after periods of speculative excess. We continue to stick to hunting out Value opportunities in essentially sound companies that are typically unloved and lowly valued.
The portfolio ended the year with weighted average upside of 35% with a price earnings ratio of 14.9 times on an historic basis but only 12 times on a forward basis and a price to book ratio of 0.9 times.
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Commentary
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Commentary