6 best fund manager picks of a banking dynasty
- Christopher Rossbach is the CIO and co-founder of boutique investment firm J. Stern & Co.
- Clients who invest with J. Stern & Co are only exposed to assets that the Stern family banking dynasty would also own.
- Rossbach explains how he achieved double-digit returns in 2021 by buying just one stock and his top stock picks.
Last year it seemed like everyone was jumping head first into the US stock market, with the S&P 500 Index registering 70 record-breaking closings during the year.
Christopher Rossbach, chief investment officer and co-founder of boutique investment firm J. Stern & Co, took a step back.
He bought only one share, Salesforce (CRM), during the year for the company’s World Stars Global Equity fund.
Clients who invest with J. Stern & Co are only exposed to assets in which the banking dynasty of the Stern family would also be invested. The most accessible way to invest alongside the Sterns is through their World Stars Global Equity fund, a concentrated portfolio of global companies overseen by Rossbach.
The public fund has $ 185 million in assets under management, while the broader strategy has $ 1 billion under management.
For the fund, Rossbach looks for quality companies that correspond to an investment horizon of 10 to 25 years. He is looking for companies with solid competitive positions and long avenues for growth.
Since inception, the fund has returned 193.2% to investors compared to the MSCI World Index, which returned 192.5%. Over five years, the fund returned 123.4%, compared to 102.9% for the benchmark.
In 2021, the fund returned 19.7% to investors. This compares to around 22.3% for the MSCI World Index.
The decision to buy a stock in 2021 is really at the heart of the family’s long-term investment strategy. In 2020, Rossbach took a much more active position, taking advantage of the various dislocations that appeared on the market following the pandemic.
“We haven’t done much at all,” said Rossbach. “We believe the portfolio was very well positioned before the pandemic; it means that in 2020 we were able to make changes from a position of strength.
“And we thought he was very well placed for this year, with the balance of drivers he had.”
The portfolio was balanced between large technology platforms that could benefit from digital transformation and companies in the healthcare, consumer discretionary and consumer staples sectors that could benefit from a recovery scenario in 2021.
This diversity of catalysts is important when you have a multi-year investment perspective, Rossbach said. He believes there is a key new driver in global markets that investors should focus on going forward.
“I think we’ve had a globalization that’s really been happening since the 1990s,” Rossbach said. “I think we’ve had the digitization, which has been happening since the 2000s. But I think we are now at a point where we need to invest.”
Firms that drive investment offer great value because the market has been quite concentrated in terms of rising stocks, Rossbach said. After the digitization era, many of these types of businesses are now ready to tackle major global challenges with the right technologies in place.
However, Rossbach is not completely backing down from digitalization. It remains invested in some of the big key tech players, such as Amazon and Facebook. However, he cautions that this theme requires a stock picker mentality, as so many of these types of companies are overvalued and have business models that aren’t sustainable.
He shares some of his best portfolio stock ideas that capture both the investing and digitization trends he is focusing on.