BHHOF - Forager CIO's Quarterly Letter - December 2020

• Forager Funds is a unique Australian asset management company, with ~$400M of funds under management and a focus on long-term investing. Forager is a sustainable business but remains nimble enough to invest in smaller listed companies not accessible to many investment managers. Key investment staff are strongly aligned with investors through co-investment and equity in the Forager business.
• The Forager International Shares Fund returned positive 38.3% for the year. In absolute terms, that is an outlier. The Forager Australian Shares Fund’s 21.6% return is less of an outlier.
• The lockdowns have hit a small percentage of the population hard but, as a whole, the savings rate in Australia soared to more than 20% of disposable income, a level unprecedented in RBA records.
• Investors are using low long-term interest rates, based on a lack of inflation concerns, to justify sky-high prices for property, infrastructure assets and Tesla shares.
• We do not know what 2021 will bring. But if the market continues to race higher, the portfolio will continue to get more defensive. Incricketing parlance, more blocks and singles, fewer boundaries.

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