Global Equities
Global High Conviction
Investor Updates
Below you will find this month’s commentary and portfolio update for the Global High Conviction unit class of the TAMIM Fund.
January 2025 | Investor Update
The TAMIM Global High Conviction unit class was up +3.53% for the month of January 2025, this was in comparison to the index return of +2.77%. The strategy has generated a return of +24.69% over the past 12 months.
How are you coping?
A frenetic and for some traumatic start to the Trump Presidency round II. Nonetheless and regardless of your stance on politics, social cohesion, fiscal policy, and stuff such as individual vs government responsibility required, as investors we will have to find ‘coping strategies’ (to use modern HR jargon) with what appears to be a significant pendulum swing.
Here in bullet point format are some of the new challenges we see. We’ve probably missed some. Naively perhaps we see a very simple solution to them. We’ll reveal at the end of the brief conjecturing.
Central bankers love trotting out they’re ‘data driven’ in setting interest rates but the data on inflation and (un)employment is alarmingly, clearly and more obviously inaccurate. If they don’t have accurate data how can they make the correct decisions? – how should investors cope?
As DOGE removes ‘wasteful’ spending in the US by government agencies, a simple Kalecki calculation means it has to be replaced with a fiscal spend of equal efficacy by one, some or all of, the private sector, the overseas sector or personal sector. If it isn’t replaced then nominal GDP will fall, and while interest rates may thus adjust downwards, it’s not clear they will, nor that the cost of capital to discount company earnings will fall. Spreads to Treasuries may not contract or widen.
Tariffs can appear and disappear in a moment. A favourite sector or country can be clobbered by a few comments on ‘Truth Social’ Capital Expenditures from Big ‘Tech’ have all but been guaranteed to increase. This makes sense since it’s what companies should do, but part of the miracle of the US equity market has been a high level of share buy backs and subdued capital investment. This changes the dynamics. Time to buy the picks and shovels companies and not the Gold prospectors?
China won’t backdown or be bullied quietly – see an excellent article entitled ‘ctrl Altman delete’ on Substack by a colleague in Hong Kong, Mark Tinker.
Equity market volatility has been very subdued at below c.15% and, more importantly for active managers, cross sectional volatility has been subdued too. This has manifested itself in the extraordinary returns to the momentum risk factor. However, if a few large companies’ share prices rise and rise, then their correlations do too, and the diversification offered to investors falls. We pointed out that $ billions was being invested globally on a single company’s eco-system, representing or chewing up over 10% of a passive strategy risk budget. That’s more like gambling. You can avoid this by diversification. So, and given the above ‘problems’ we see developing, we anticipate (finally) the cross-sectional volatility reverting to normal levels and thus offering more opportunity for active managers. If you have skill then the more chances you have to use it, and the greater its effect as the difference between winners and losers widens, (cross-sectional volatility) the bigger your excess return. This means investors should:
1. Diversify more if they haven’t already. More stocks, more countries, more sectors, more variety in size exposures
2. Use a risk control tool to ensure correct sizing and directionality of views, and
3. Be prepared for higher portfolio turnover and to ‘suffer’ a value bias
We’ll see if we’re correct!
Fund Performance
Portfolio Highlights
Smiths Group plc (LSE: SMIN)
Smiths Group has been a core long-term holding in the portfolio, reflecting our global equity expertise and our ability to identify value in out-of-favour sectors before the broader market re-evaluates them. Our investment approach enables us to capitalise on market inefficiencies caused by short-term sentiment-driven trading, ensuring diversified exposure beyond portfolios overly reliant on Momentum risk factors.
Smiths Group is a UK-based industrial technology conglomerate operating across four divisions: John Crane, Smiths Detection, Flex-Tek, and Smiths Interconnect. The company’s expertise in defense electronics, industrial components, and detection systems positions it well to benefit from surging defense and infrastructure spending in the UK and EU. The John Crane business supports energy infrastructure modernisation, while Smiths Detection’s security and threat identification systems are increasingly essential amid rising geopolitical tensions.
Despite being overlooked for years, Smiths Group has delivered consistent earnings growth and recently raised its FY2025 organic revenue growth forecast to 6-8%. With operating leverage, this translates into earnings growth exceeding 1-2%, reinforcing the strength of its business model and balance sheet. The company is also streamlining operations, considering a spinoff or sale of its Detection business, which could unlock further shareholder value.
Trading at a forward P/E of 17.98, Smiths remains undervalued relative to its potential earnings trajectory. With a 2.08% dividend yield, strong cash flow generation, and exposure to long-term industrial investment cycles, Smiths exemplifies the value of a disciplined, contrarian investment strategy in delivering diversified, long-term growth for clients.
CRH plc (NYSE: CRH)
CRH has been a longstanding position in the trust, reinforcing our confidence in identifying strong businesses in unloved sectors that the market eventually re-evaluates. This investment highlights our global equity knowledge and long-term approach, which contrasts with short-term news-driven investing that often leads to over concentrated and momentum-driven portfolios.
As the world’s leading building materials provider, CRH operates across North America and Europe, supplying cement, aggregates, asphalt, and construction solutions to critical infrastructure projects. Governments in the US and EU are increasingly prioritising industrial policy and infrastructure investment, leading to secular tailwinds for CRH’s business. Its recent acquisitions in concrete and precast solutions have further strengthened its exposure to public sector spending on utilities, roads, and commercial developments.
Financially, CRH continues to outperform expectations. In FY2024, revenue reached $35.4 billion, with EBITDA growth of 6% year-over-year. Management’s capital allocation discipline has allowed for $2.3 billion in capital expenditures while maintaining a manageable debt-to-EBITDA ratio of 2.14. The company’s revised FY2025 guidance, forecasting earnings per share above $6.00, underscores its resilient earnings power.
Trading at a forward P/E of 19.09, CRH remains undervalued relative to its long-term earnings growth potential. With a 1.24% dividend yield and a commitment to enhancing shareholder returns, CRH stands as a testament to our ability to identify businesses with strong fundamentals at compelling valuations, positioning clients for long-term, risk-adjusted gains.
Heidelberg Materials AG (XTRA: HEI)
Heidelberg Materials has been a core holding in the trust for an extended period, reinforcing our long-term investment philosophy of seeking quality businesses in out-of-favour sectors. This approach allows us to capture value before broader market recognition, avoiding reactionary, short-term investing that often results in momentum-driven, unbalanced portfolios.
As one of the largest global building materials companies, Heidelberg Materials provides cement, aggregates, ready-mixed concrete, and asphalt for infrastructure and commercial projects across Europe, North America, and Asia. With the EU and US governments ramping up industrial policy and infrastructure spending, Heidelberg’s strategic positioning in construction materials makes it a key beneficiary of these structural shifts. The company has also led the charge in low-carbon cement innovation and carbon capture initiatives, aligning with increasingly stringent environmental regulations.
Financially, Heidelberg has consistently delivered robust performance. FY2024 revenue is expected to reach €21.2 billion, with EBITDA margins expanding to 21%, supported by pricing power and efficiency gains. Net income margin has risen to 9.99%, and EPS is projected to grow 14.3% in FY2025, reinforcing the company’s ability to generate sustainable shareholder value.
Despite these strengths, Heidelberg trades at a P/E ratio of 13.2, offering a compelling valuation given its earnings trajectory and dominant industry position. With a 2.02% dividend yield and strong capital discipline, Heidelberg exemplifies our ability to identify undervalued, structurally important businesses, delivering long-term, diversified returns for our clients.
Fund Facts
Investment Parameters
| Management Style: | Active |
| Investments: | Global Equities |
| Number of securities: | 80-110 |
| Single security limit: | +/- 5% relative to Investable Universe |
| Country/Sector limit: | +/- 10% relative to Investable Universe |
| Market capitalisation: | US$2+bn |
| Derivatives: | No |
| Leverage: | No |
| Portfolio turnover: | Typically < 25% p.a. |
| Cash level: | 0-100% (typically 0-10%) |
Fund Profile
| Investment Structure: | Unlisted Unit Trust available to wholesale or sophisticated investors |
| Minimum Investment: | $100,000 |
| Management Fee: | 1.00% p.a. |
| Admin & Expense Recovery: | Up to 0.35% |
| Performance Fee: | 20% of performance in excess of hurdle |
| Fee Cap: | 2% of total FUM |
| Entry/Exit Fee: | Nil |
| Buy/Sell Spread: | +0.25% / -0.25% |
| Applications: | Monthly |
| Redemptions: | Monthly with 30 days notice |
| Investment Horizon: | 3-5+ years |
| Distributions: | Annual |
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Invest via IMA
The TAMIM Global High Conviction strategy is available as an Individually Managed Account (IMA). Please see the Strategy Summary for terms or request Investment Documentation via form.