KEY POINTS:
What is it called and what sort of savings product is it?
Salvus Strategic Investments is an NZX listed investment company which invests in smaller New Zealand companies.
Who is the company behind it?
It is run by Salvus Asset Management which is has two investment managers; Andrew Couch and Simon Wilson, both of whom have international fund management experience.
Who is the target market?
Investors wanting to own smaller New Zealand companies.
What return does it offer?
Its official investment objective is to provide "long-term growth of capital and dividends" and it benchmarks itself against the NZX-Small Companies index.
When was it launched?
It listed on the NZX in July 2004.
What other products is it like or is it competing with?
The fund competes with other listed investment companies such as Kingfish and the NZ Investment Trust, along with various managed funds which invest in New Zealand shares.
Is it long term, short term or medium term?
Being a share-based fund it suits investors focussed on the medium to long term.
What is the unique selling point?
What makes the company different is its focus on smaller companies including those listed on the NZAX and unlisted companies. Also currently it has a view, expressed in a quarterly report out this week, that the NZX market is "very fully valued" and it is holding around a third of its funds in cash.
How strong a stomach do you need for it?
Medium-plus. The company invests in smaller New Zealand companies and unlisted companies which means often it takes time to realise value. Also the company adopts what is known as a value approach to investing and buying undervalued shares. Often, though, value investing struggles to compete with other investment styles such as growth, in a strongly rising market.
What's the hitch?
Salvus hasn't performed as well as its peers such as Kingfish and NZIT. Currently its share price is below the $1 issue price although the asset backing of each share is $1.31. Kingfish, which launched around the same time, has a share price of $1.58 and backing of $2.09.
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