Gondor Capital’s two hedge funds continued to outperform in May firms’ domestic hedge fund Gondor Partners, LP climbing 9.68 per cent through May (+1.26 per cent MTD), beating its benchmarks, with the S&P 500 gaining 8.66 per cent and HFRX expanding 2.85 per cent during the same period.
Gondor’s offshore fund, the Gondor Partners, Ltd, closed the first five months of 2017 up 8.54 per cent (+ 0.73 per cent MTD), while the S&P 500 and the HFRX finished 8.66 per cent and 2.85 per cent respectively during the same period.
Portfolio manager Vincent Au points out that both funds have continued to beat a significant majority of other hedge funds.
“Our performance is dependent on the performance of our investments. As a value investor, there are times when there are no attractive opportunities thus I wait for a better entry. My job is not always about doing something. I don’t trade and invest for action. And sometimes my job is to be in cash. I invest not solely base on ideas but also base on price,” says Au.
He credits his investment selection and steady discipline for generating consistent alpha for his funds and investors, particularly in outperforming his benchmarks, the S&P 500 and HFRX.
Moving forward, Au says Gondor would continue doing what it always do to generate positive returns and achieve its upward climb. And that is to find ideas and employ the strategies that have allowed his funds to achieve its revenue goals.
In the second half of this year, he said that technology, financials and oil-focused positions will provide good opportunities. Au is bullish in his positions at JP Morgan, Mondelez, Nvidia, and Electronic Arts.
“I believe in my strategy and have every confidence in its performance going forward. In fact, I don’t recall a time when I was more confident about the future performance our funds than today,” he says.
Aside from possible military conflicts, Au is looking at interest rates and valuations as his biggest concerns. He expects these issues to challenge the markets for the remainder of the year and he is still cautious about valuations.
Au says: “Very much so, while I do not think the markets are ridiculously expensive I do know it’s not cheap. It is never fun being the downer of the party but I prefer to be cautious and sleep at night.”
