Analysis of the Indépendance SICAV Fund – France Small & Mid
17 OCT, 2024
By Andrea Sepúlveda from LatamSelf
The fund Indépendance France Small & Mid is an equity fund that primarily invests in small and medium-sized French companies, following its own "quality value" methodology. The fund is domiciled in Luxembourg and was launched in 1993, making it a fund with over 30 years of history. In addition, it adopts responsible investment criteria, a central element in its selection process, and is in compliance with Article 8 of the SFDR.
Characteristics of the Indépendance SICAV - France Small & Mid fund
- Investment strategy: the fund's strategy focuses on investments in companies that stand out based on rigorous quality/value criteria, with the aim of increasing the value of the portfolio's capital, according to a classic value strategy. In addition to this objective, the team adds ESG (environmental, social and governance) criteria, looking for those extra-financial factors that can contribute to the long-term profitability of the companies in the portfolio, and consequently, of the fund itself. Some of these criteria include investing in companies that adopt the best business practices to ensure sustainable performance and manage the risks they are exposed to.
- Benchmark index: the strategy's benchmark index is currently the CAC Mid & Small NR Index (since 2016), a benchmark that does not integrate environmental or social characteristics, and which the team uses only as a reference point for performance comparison. The France Small & Mid fund is actively managed, with investment decisions made autonomously by the team based on the results of their own internal processes, which can lead to significant (or total) differences compared to the benchmark.
- Investment team: the investment team is led by William Higgons, President and Manager of Indépendance AM, who has been running the company since 1992 and has over 30 years of experience in investing in listed small and medium-sized companies. Higgons is a member of the Société Française des Analystes Financiers and has served as an advisor for two terms. In addition to the management team, all with extensive experience, Bertille Sainte-Beuve, Director of Responsible Investments, also plays an active role in the fund management processes.
- Assets: as of the end of August 2024, the Indépendance France Small & Mid strategy managed assets of over 300 million euros.
- Management Company: Indépendance AM, previously known as Indépendance et Expansion, took its current name in 2023 but the company boasts over 30 years of activity in the sector. The company is renowned for its investments in small and medium-sized listed companies that offer a combination of quality and value, which is the core of their investment process, along with a genuine long-term focus. The "Quality Value" methodology was developed by William Higgons in 1992 and is at the basis of the investment processes of all the funds managed by the company.
Evolution of the Indépendance SICAV - France Small & Mid fund
According to the Factsheet of the Indépendance France Small & Mid Class X EUR fund updated to August 31, 2024, it is highlighted that past performances are not indicative of future ones and that the fund's returns can vary depending on changes in exchange rates.
The annualized results, collected from external sources, allow for a better comparison with other similar funds or asset classes.
One of the advantages of analyzing a fund with a long history is that it allows you to compare it with other funds in the same category over longer time horizons, to assess the consistency of the strategy and the long-term results, which is the promise of this fund. Analyzing the available data, the fund has consistently stood out among the top quartiles of its category in recent years, demonstrating the effectiveness of the company selection by the management team and confirming the value of the adopted methodology.
It is worth mentioning that, although the current benchmark is the CAC Mid & Small NR Index since 2016, the fund previously used the CAC Small NR from 2004 and even before the SBF Second Marché, so the historical performances provided by the company for periods prior to 2016 reflect the returns of these three indices.
Using external sources to analyze risk metrics, it is noted that, despite the fund following another benchmark compared to the French market, the 3 and 5 year alpha results have been positive.
The management team has achieved better performance with a level of risk very close to or lower than that of the market, thanks to a highly targeted selection based on strong convictions.
Conclusions
Advantages:
- Institutional size and solid track record with ESG criteria.
- Alpha proven with a constant investment process.
- Management company with decades of experience in the quality value methodology.
Disadvantages:
- Institutional investors outside of Europe may prefer active funds with a broader regional focus than this fund that specifically focuses on France.
