A MAPFRE fund has returned 28 percent in the last 12 months and is shining in its European Stock Exchange category. It invests in sports companies, including three of the best soccer teams in Europe.
Sports stocks are trading higher on trading floors. This is illustrated by the fact that MAPFRE AM’s Behavioral Fund is shining in its European Stock Exchange category, with a return of 27.97 percent over the last 12 months. Since the beginning of this fiscal year, it has risen 8 percent. But its success is not due to chance and last year this product managed to bypass market tensions and rise 12 percent. In 2019 it gained another 17 percent.
With assets under management of 58.47 million euros, the fund is managed by Luis García Álvarez, who pursues a value-based investment strategy. This means that he invests in companies where the price is below its intrinsic value and waits for the market to correct this inefficiency. “It’s a philosophy for life, not just for investment. The aim is to identify large caps that trade below their value and try to get a return within a medium-term time frame,” he said.
Among his main positions are three of the biggest soccer teams in Europe: France’s Olympique de Lyon, which has a 2.5 percent weighting in the portfolio, The Netherlands’ Ajax Amsterdam (2.5 percent) and Germany’s Borussia Dortmund (5.5 percent). Although the three companies are lagging behind this fiscal year in the rankings, García Álvarez hopes that they will take off again due to the economic recovery and the relaxing of lockdown restrictions, which will come with the arrival of vaccines.
In addition, “they are well-managed companies with healthy balance sheets, which give yields and distribute these among their shareholders and that are trading at between 40 and 50 percent below March 2020 levels,” explained the expert.
So confident is he in their sound medium-term progress that during the pandemic he increased his positions in these companies. From his point of view, “despite being cyclical stocks, they have been left behind in portfolio rotation. This is because there’s a lot of ignorance about these companies in Europe, which is not the case with US investors who are looking at soccer teams in Europe that are highly discounted and offer attractive growth potential.”
In addition to the three European clubs, the MAPFRE AM fund invests in four other companies linked to the sporting world: the Swedish manufacturer of the safest cycling helmets in the world MIPS; the Italian manufacturer of fitness equipment Technogym, the German clothing company Adidas and the British gym chain GymGroup. These four positions are doing well on the Stock Exchange this year, and in the last 12 months they have risen between 30 and 170 percent. Together, the seven sports companies have a 25 percent weighting in the fund.
Along with the sports sector, the product managed by García Álvarez also gives a considerable weighting to cyclical consumer companies of over 32 percent in the MAPFRE AM Behavioral Fund. Standing out among the top 10 are Italy’s Unieuro, with a 3.91 percent weighting and France’s Carrefour, with a 3.04 percent weighting within the fund. The technology sector has a 23 percent weighting and the industrial sector has an 11 percent weighting within the fund.
Among the 30 companies in which the MAPFRE AM fund invests, there are four Spanish stocks in which García Álvarez has faith in over the medium-term. “Actually, two of them are giving us very good results,” he says. These are Global Dominion and Laboratorios Rovi, which have weightings of 3 and 2.5 percent in the fund, respectively. Their shares are shining on Spanish trading floors, with increases of 15 and 22 percent in 2021.
The expert also believes that the market will correct the price of the well-managed firm CIE Automotive, which has the seventh largest weighting in the portfolio with a weight of 3.36 percent. This year, the stock rose 3 percent on the Stock Exchange. He noted that Applus+ is undervalued after it lost more than 21 percent in 2020, and this fiscal year it has stayed in the red, dropping a further 1 percent.
The fund has a minimum entry investment of 10 euros and a management fee of 1.75 percent.