Portfolio Construction

James will be benchmark agnostic when selecting and weighting investments. The constituents of local indices, the weightings of investments in these indices and the volatility of the indices relative to the Fund will not affect investment decisions. It is anticipated that agnosticism towards indices will help focus research efforts, decision making and ultimately investment performance.

The intention is to diversify only to the point that it protects investors from mistakes and doesn’t reduce the compound rate at which he can grow investor’s capital over the long term. He thinks this will be about 10-15 holdings, but there may be times where he will hold more, or less stocks.

The number of holdings and the weighting of those holdings is based on the opportunity set at any particular point in time. The best ideas will be given the largest weightings.

Single investments will be limited to 15% at cost price, but this kind of allocation will only occur for exceptional opportunities. The weighting for a more normal opportunity will be 10% at cost price.

There are many different scenarios under which weights can be handicapped or increased to account for greater risk or potential return.

In general, James will aim to be a professional opportunist. The portfolio will be an output of the opportunity set and how he interprets it, making sure to diversify enough to protect from the inevitable mistakes that any fund manager can and will make on a single investment.