Is effort correlated with investment performance?

November 2017 Newsletter | The Auscap Fund has experienced a surprisingly strong last quarter. In the three months to 31 October, the Fund has delivered a compound return of 12.7% net of fees to investors. It should be added that this comes after a somewhat lacklustre twelve months where the value of the Fund’s assets largely drifted sideways with the majority of the returns coming from dividends and distributions. So what has changed? What has caused the value of the portfolio to increase recently? In this edition we discuss our view on whether short term investment performance is a function of effort, manager skill and/or luck.