This deep value offering from Brandes had a very strong quarter, gaining nearly 9%, outpacing both the index and its peer group.
The management team follows a very disciplined and repeatable process that looks to buy companies that are trading a significant discounts to their true value. While this process may result in periods of underperformance, over the long-term, I expect it can to deliver strong returns for investors.
On the surface it appears to be more volatile than its peers, with a standard deviation that is considerably higher than both the index and its competition. However, looking at upside and downside capture ratios, the fund still manages to do a good job at protecting investors’ capital.
The fund has been on a solid run since mid-2011, and I would expect that we will see more of a pullback in the next few months. However, I do believe that over the long term, the focus on value names will help to provide above average returns to investors, both on an absolute and risk adjusted basis.