Ann: Investment Update and NTA March 2022, page-3

These resource companies had significant increases in share price performance, so I'm thinking these companies entered the top 20 through share price appreciation rather than more purchases.

I scratch my head with these guys on two fronts:

1. Their strategy is to focus on businesses producing good cashflow and buying in as share price improves. I don't understand how companies like Block, Maas and 360 pass any of their filters! They are not true to their advertised strategy, and this is a red flag for me.

2. I hold many of the same resource companies along with some manufacturing and financial companies in my portfolio. I got close to triple market returns in March. How can these guys be 200 basis points behind the market return in March? They are far to diversified into some speculative businesses.

When I pay a base fee and performance fees, I expect a more concentrated portfolio, and a commitment to stick to their stated strategy. I hold 20 ASX listed companies (CDM being one) and think this is at the limit of diversification. I've seen a 45% gain this FY by screening for companies with high price to operating cashflows. Cadence have deviated far from their own strategy.

This LIC is on track to do no better than market returns and then worse after fees. Better opportunities elsewhere. Time to sell.