This Value Fund Is Outperforming By Focusing On International Small Caps

Keith Smith’s Bonhoeffer Fund returned -4.4% net of fees in the first quarter of 2022 compared to a return of -6% for the MSCI World ex-US Index. Bonhoeffer specializes in finding uncovered international small caps trading at deeply discounted valuations. According to a copy of the firm’s letter, which ValueWalk has been able to review, at the end of March, equities in the fund’s portfolio had a weighted average free cash flow yield of 18.5% and an average EV/EBITDA ratio of 4. Hidden Value Stocks Around 40% of the fund’s portfolio is devoted to what Smith calls “compound mispricings.” This…