Investors can glean valuable insights by taking a peek into the portfolios of some of the world’s largest asset managers. Professional money managers, often referred to as the “smart money” in the investing world, manage billions of dollars of their clients’ money.
One of the top institutional money managers around is Athanor Capital, which is led by Parvinder Thiara. The firm has been highly successful since its founding in 2017, generating strong returns over the past few years. While investors should never blindly duplicate the holdings of an asset manager, we do believe investors can learn a great deal about how to invest successfully by understanding the methodology utilized by investment professionals.
Firm Overview
Athanor Capital currently manages more than $4 billion in discretionary funds, and is seeing rapid growth in managed assets. In fact, the firm more than doubled its assets under management, or AUM, in 2019 alone. Mirroring the investment strategy of Athanor Capital would have generated hefty returns--investors following the company’s 13F filings starting with the February 14th, 2018 filing through the February 14th, 2020 filing would have generated total returns of 16.4% per year. Contrast this with the broader market index, measured by the SPDR S&P 500 ETF (SPY), which generated a total return of 3.9% per year in the same period.
The investment philosophy of the firm is to try to find mispricings in the market through research, across a variety of asset classes with a focus on equities, commodities, interest rates, credit, and foreign exchange. Essentially, the firm tries to find assets that are temporarily discounted to their true value. The firm utilizes both a top-down approach starting with a certain hypothesis to generate ideas, as well as a bottoms-up approach based on fundamentals.
Top Holdings
Taking a look at Athanor Capital’s holdings reveals a higher relative allocation to growth stocks, along with some high-yielding dividend stocks that may have appeal to income investors. As of the firm’s May 14th 13f filing, the top holding of the firm was AGNC Investment Corp. (AGNC), a mortgage REIT with an extremely high dividend yield above 10%. AGNC made up 13.6% of the firm holdings as of May 14th.
The next four-biggest holdings are all technology stocks that appeal to growth investors: Amazon.com (AMZN) at 12.2% of firm holdings; Microsoft (MSFT) at 10.1%; Netflix (NFLX) at 7.9%; and ServiceNow (NOW) at 6.3%.
The firm has approximately 22% of holdings invested in individual equities. At nearly one-quarter of total investments, Athanor Capital believes in its ability to pick winning stocks. Of course, the huge returns generated by the technology sector in the past several years has proved this strategy right.
Final Thoughts
Athanor Capital has a unique investment philosophy which has clearly led to strong results. Firm assets under management have grown at a rapid pace in the past three years, while fund performance has been quite strong.
Investors should remember that there are never any guarantees in the stock market, but taking a closer look at Athanor Capital’s investment methodology and stock holdings yields valuable takeaways.
Ben Reynolds is CEO of Sure Dividend. Sure Dividend helps individual investors build high quality dividend growth stock portfolios for the long run.