SSNLF - Distillate Capital Partners Q2 2021 Investment Letter

• Distillate Capital Partners was formed in 2017 and is based in Chicago, IL. The fund strategies use cash-flow-based measures of value and quality that are designed to avoid accounting distortions that we believe have rendered many traditional metrics less relevant in an increasingly asset-light world.
• The U.S. FSV & Intl FSV strategies gained 5.73% and 4.48% on a total return basis for the quarter, respectively. The U.S. portfolio lagged its S&P 500 benchmark by around 2.8% in the quarter, which offset most of the relative gain from the first quarter such that first half performance of the strategy is now 10 basis points ahead of that benchmark.
• Strong performance for the U.S. SQV strategy continued in the second quarter both in absolute terms and relative to the iShares Russell 2000 ETF and iShares Russell 2000 Value ETF benchmarks.
• For the first half of the year, sector weights havebeen a drag of just over 1% which is due almost entirely to being underweightin the financial and energy sectors which have significantly outperformed.

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