CXMSF - Herzfeld Caribbean Basin Fund: My Highest Conviction Idea
2024-03-12 09:05:34 ET
Summary
- Herzfeld Fund's composite Portfolio poised to benefit both from Tourism and Near-Shoring of US Supply chains from China into the Caribbean region.
- While "CUBA" is the ticker symbol, 0% of composite portfolio valuation's securities are domiciled in Cuba.
- Portfolio companies do not depend on, but would benefit exponentially from, any lessening of decades old US Cuba embargo.
- Historically significant NAV discount (approx 20%) is grossly inappropriate based on Q4 2023 inflection point in expense ratio, resumed distribution policy, and resumed (current) tender offer policy.
- Discount "stickiness" to an illusory discount from late August through December 20, 2023 is primary reason for inappropriate discount.
Why Invest in the Caribbean Basin?
Most investors are already conscious that the tourism economy is a hotspot, with banner earnings and guidance from cruise operators. The expansion of the Panama Canal coupled with post-Covid trends of US companies near-shoring their supply chains for proximity and China avoidance have huge effects on the Caribbean's trade economy. Both of these factors are before even considering the exponential upside of the long term "Holy Grail" (a rebuilding of Cuba). That holy grail is certainly not priced into any of the holdings as it remains stymied by a decades-long US embargo that is grossly unpopular worldwide ....
Herzfeld Caribbean Basin Fund: My Highest Conviction Idea