VST - Distillate Capital Partners Q3 2020 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.
• Despite the headwind from extremely concentrated gains among a few of the largest stocks in the market, Distillate’s U.S. FSV strategy’s year-to-date return of 6.20% remains ahead of S&P 500 Index’s return of 5.57% and is nearly 18 percentage points above the Russell 1000 Value ETF’s return of -11.64%.
• Distillate’s International FSV strategy has continued to outperform the iShares MSCI All Country World Ex US (ACWI-EX) ETF with a year-to-date return of 3.72%, considerably ahead of the -5.27% return for the benchmark.
• Distillate’s U.S. FSV Strategy, Apple and Microsoft were among the strategy’s largest holdings until valuations became more expensive and each stock was sold.
• The biggest additions to the portfolio in the rebalance were Alphabet, the parent of Google, and Intel, the chipmaker.

For further details see: