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Holly LaFon
Holly LaFon
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Centaur Total Return Fund's 4th Quarter Shareholder Letter

Fund sees leadership transition

January 17, 2019 | About:

Dear Centaur Total Return Fund Investors:

As you may know, effective November 16, 2018, DCM Advisors (“DCM” or “we”) was named as the interim investment advisor for the Centaur Total Return Fund (the “Fund”) and new investment advisor, subject to shareholder approval (a proxy is expected to be mailed to shareholders in early 2019). DCM is an SEC registered investment advisor located in New York City and, along with its employees and affiliates, has experience in managing investments for clients, including individuals, corporations, non-taxable entities, and other entities. All of us at DCM are very excited for this opportunity and we wish to thank the Fund Board of Trustees for this appointment.1

In regards to the Fund, we do not anticipate changing the Fund’s objective and will continue to manage in accordance with the Fund’s strategy and investment objective as noted in the Fund’s prospectus. We believe that the new portfolio managers for the Fund, Dr. Vijay Chopra and Gregory Serbe, are capable of guiding the Fund as it enters its new phase. Both Vijay and Greg have extensive equities and fixed income experience, respectively, and have managed through many market cycles. We believe their collective experiences will allow them to deliver excellent market performance while seeking to protect against downside risk.

We appreciate your support during the transition and look forward to a long and successful relationship.

Best Regards,

DCM Advisors

By: /s/ Andrew M. Greenstein

Name: Andrew M. Greenstein

Title: Acting Chief Executive Officer

Dear Fund Investors,

The Fund produced a return of 1.80% for the twelve months ending October 31, 2018. The Fund’s primary benchmark, the fully invested S&P 500® Total Return Index, experienced a gain of 7.35% for the same period, while the fully invested Dow Jones U.S. Select Dividend Total Return Index returned 5.00%. The reason for the underperformance was primarily due to the Fund’s large cash holding.

For the trailing 10-year period ending October 31, 2018, the Fund produced an annualized return of 12.06% versus the primary benchmark’s return of 13.24% annualized over the same period. The Dow Jones U.S. Select Dividend Total Return Index has returned 11.77% annualized for the ten years. These comparisons, in addition to the inception to date comparative figures, are shown in the table below.

(For the Fund’s most up-to-date performance information, please see its website at www.dcmmutualfunds.com.)

Below is a slightly different presentation of the Fund’s performance by calendar year with comparisons to our primary benchmark, the S&P 500® Total Return Index (under the column “S&P500”), and also our secondary benchmark, the Dow Jones U.S. Select Dividend Total Return Index (under the column “DJ US DIV”). Please note that the figures for 2005 represent the performance from the Fund’s launch date in March through year-end; the 2018 figures represent the performance for the first ten calendar months of 2018 through October 31st.

Portfolio Update

As of October 31, 2018, the Centaur Total Return Fund was approximately 31% invested in equities spread across 8 holdings. The Fund also owned options on various securities that comprised 0.24% of Fund net assets. Cash and money market funds represented approximately 61% of the Fund’s net assets.

As of October 31, 2018 the top positions in the Fund were as follows:

As a result of the transition on November 16, 2018, noted in the Introduction to Shareholders and Note 8 of Subsequent Events, the positions in the Fund as of October 31, 2018 are no longer the same as we write this Shareholder Letter.

Our investment strategy and objective will continue to be in accordance with the Fund’s prospectus. We pick stocks based on a disciplined investment process that helps us focus on the key characteristics of valuation, profitability, quality, and earnings and price momentum. Our fixed income selection is based upon the slope of the yield curve, and within any given maturity, the differences in yield among various credit qualities and issuer industries. The Fund’s allocation between equities and fixed income is based on macroeconomic analysis. We will continue to seek to maintain the Fund’s risk characteristics to protect against downside markets. Our goal is to preserve capital, generate significant dividend income and benefit from capital appreciation while seeking to protect against downside risk with a 50-70% equities composition, similar to what the Fund has done historically.

In summary, we are extremely excited to be the interim investment advisor for the Fund and, subject to shareholder approval, hope to become the new investment advisor. We will continually seek investing opportunities for the Fund and will work to ensure that we are getting good value for monies invested. We appreciate your trust in us and look forward to managing the Fund for years to come.

Respectfully submitted,

/s/ Vijay Chopra and Gregory Serbe

Vijay Chopra and Gregory Serbe

Co-Portfolio Managers, Centaur Total Return Fund

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

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