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Asilo Argo’s Strong November Rally

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Despite enduring three straight losing months since August in tandem with broader stock markets, Asilo Argo is currently enjoying one of its strongest months with an advance of about 17 percent month-to-date through November 21.  Year-to-date, the fund has returned 56 percent, ranking it as the top-performing fund among 777 peers in its Morningstar category and the third-best-performing fund in the Morningstar database overall. This marks a robust recovery from the challenging year of 2022 that penalized the fund’s ‘future superstar’ stocks.

“Asilo Argo’s strong performance in November can be attributed to a combination of astute investment decisions, favorable company results, and positive market sentiments,” summarizes Ernst Grönblom, a Finnish portfolio manager focused on discovering tomorrow’s superstar companies. Assisted by co-portfolio manager Henri Blomster, Grönblom oversees a concentrated portfolio of about 12 current or potential future superstar companies, where their competitive advantage and potential are still underestimated by the market.

“Asilo Argo’s strong performance in November can be attributed to a combination of astute investment decisions, favorable company results, and positive market sentiments.”

Managing a concentrated portfolio not only means that each holding significantly influences the fund’s performance on the upside, but also underscores the potential impact of incorrect stock picks. A strategic decision contributing to Asilo Argo’s solid November performance was the timely exit from its position in consumer lending company Upstart before the release of its third-quarter results. These results revealed a wider-than-expected loss and a dismal outlook. “Asilo Argo’s proactive approach to risk management was evident in its decision to exit its position in Upstart before the Q3 results,” highlights Blomster. “Although Upstart was a minor holding, this move demonstrates the fund’s willingness to acknowledge mistakes and act swiftly, avoiding potential losses.”

“Several companies in the fund’s portfolio posted impressive results, vindicating our investment choices.”

Asilo Argo’s performance in November was significantly boosted by the third-quarter results of its holdings. “Several companies in the fund’s portfolio posted impressive results, vindicating our investment choices,” emphasizes Grönblom. For instance, Palantir Technologies delivered a double beat and raised its outlook, signaling financial health and positive future prospects. Similarly, Hims and Hers not only beat revenue consensus but also provided guidance that exceeded estimates. Other notable performances came from Mercado Libre, Airbnb, Datadog, and HubSpot, each providing double beats. “These results collectively played a crucial role in the fund’s strong performance,” argues Blomster.

Beyond the numbers, the team at Asilo Argo focuses on the narrative and operational developments within its investments. Palantir Technologies, the fund’s largest holding, has adapted its sales strategy by prioritizing short, intensive customer boot camps over trial runs. This shift aims to expedite customer onboarding and conversion into paying subscribers. Another positive development was Hims and Hers’ earlier-than-expected expansion into the weight loss category. “This move indicates the company’s agility and potential for growth, aligning with Asilo Argo’s strategy of investing in dynamic and forward-looking companies,” says Blomster. 

Lastly, the fund’s November performance was also supported by broader market sentiment, partly driven by promising inflation data. Positive macroeconomic indicators often boost investor confidence, benefiting equity markets and investment funds like Asilo Argo. “In summary, Asilo Argo’s strong performance in November can be attributed to its strategic exits, impressive company results, a focus on both numbers and narratives in its investment choices, proactive developments within its portfolio companies, and favorable macroeconomic conditions,” concludes Grönblom.

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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