Important Disclosures
Performance data for Emeth Value Capital and its predecessor shown in the chart on the first page of the letter is net of actual fees charged, reflecting our published management fee schedule, as well as performance incentive fees, if earned. Results include the effect of all trading and other custodial fees or expenses, and is current as of the date(s) indicated. Returns include the reinvestment of dividends and other earnings
Emeth Value Capital became initially registered as an investment adviser on January 1, 2021. Performance prior to that date reflects the personal account performance of Emeth Value Capital, LLC’s sole managing member, Andrew Carreon, and therefore represents predecessor performance and not performance achieved by any account managed by Emeth Value Capital. After January 1, 2021, performance reflects a composite of all accounts subject to a performance fee arrangement, as well as Mr. Carreon’s personal account. Mr. Carreon is responsible for both the prior results of his personal account (which was the only account he managed prior to forming Emeth Capital Value) and the results achieved at Emeth Value Capital. Mr. Carreon’s personal account was previously managed in a manner substantially similar to the strategy used by Emeth Value Capital. Mr. Carreon’s account performance reflects the application of model fees equal to the asset-based fee plus incentive structure applicable to all accounts held by qualified clients. Clients who are not subject to a performance fee are not included in the composite. These are a small subset of the firm’s clients and represent approximately 1% of the firm’s assets under management. Performance of non-qualified clients was generally better than qualified clients due to the impact of lower fees during the periods shown. Emeth Value Capital is no longer accepting non-qualified clients and currently offers only a performance-based fee arrangement.
Past performance is not a guarantee of future results. Investing through Emeth Value Capital includes risk, including the risk of permanent capital loss. Accounts managed by the firm may experience losses greater than prevailing market returns, as well as gains lower than prevailing market gains. Similarly, individual accounts included in the composite experienced performance different from the overall composite due to timing of account opening.
The Delta column in the performance chart represents the amount of outperformance (positive number) or underperformance (negative performance) of Emeth Value Capital and its predecessor relative to the results of the MSCI ACWI Index.
We believe portfolio and index information is from reliable sources, however, we cannot guarantee accuracy, completeness, or timeliness. We prepared this information internally and it has not been independently audited or verified. It should not be used to make investment decisions and does not constitute investment advice.
The MSCI ACWI index captures large and mid-cap representation across 23 developed markets and 24 emerging market countries. It contains 2,650 securities and covers approximately 85% of the global investable equity opportunity set. Market index information is included to show relative market performance for the periods indicated. Index returns are presented on a total return basis, including reinvestment of income distributions. Comparison to this index is imperfect since this is a broadly based index which differs in many respects from the composition of our portfolio strategies. Client portfolios are less diversified than the index in terms of number of securities and sectors represented. Our portfolios also include some amount of cash, which is not included in the index. Indexes are unmanaged and you cannot invest directly in them. They don’t incur or report expenses, such as trading costs or management fees; these fees do apply to client portfolios and reduce returns.
Our strategy may experience greater volatility and drawdowns than market indexes. Such strategies are not intended to be a complete investment program and are not intended for short term investment. Before investing, you should evaluate your financial situation and ability to tolerate volatility.
Material market and economic conditions that could have had an effect on the results portrayed during the reported time periods include the decline in global capital markets during the COVID-19 crisis, the Great Financial Crisis (GFC), the lengthy stock market recovery from the GFC trough, historically low interest rates followed by significant increases in inflation and interest rates in 2021 and 2022, volatility in oil prices and currencies, and other factors. All other factors being equal, our own results will generally suffer from overall falling markets and will generally benefit from overall rising markets.