Focused, Long/Short Equities Investing

Thornburg Long/Short Equity Fund combines tenets of both growth and value investing to pursue long-term capital appreciation. The fund invests in long and synthetic short positions of a wide range of equity securities. These represent companies of all sizes primarily in the U.S. which, based on our fundamental active research process, we believe will either rise or fall in price to the benefit of the fund’s absolute return.

Working Photo“By investing both long and short, we not only give ourselves the opportunity to add value with active management, but we can also provide for significantly less volatility than the overall market. Over a full market cycle, our goal is to achieve broad equity index-like returns with less risk. So, adding this fund to a portfolio helps investors achieve greater diversification while offering the potential for attractive returns.”

— Connor Browne

Investor Benefits

The fund offers:

  • A liquid alternative option to complement a diversified portfolio.
  • A risk management discipline, which may help lower volatility over time.
  • Low correlation to equity markets to enhance an overall portfolio’s diversification.
  • Thornburg’s active, focused investment selection process we have applied to all of our products since 1984.

Our Distinct Investment Approach

Thornburg Long/Short Equity Fund is a natural extension of our bottom-up security selection process, which is flexible, collaborative, and far from the herd.

Applying the same firm-wide discipline in how we think and invest differently to a focused long/short strategy, we strive to simultaneously mitigate risk while increasing the potential for greater total return. Through active security selection, we hope to generate full market cycle returns similar to the S&P 500 Index, but with less volatility, while delivering positive outcomes within both the long and short sides of the portfolio.

Conviction in Undervalued Companies

The fund ideally takes long positions in investments that we believe will grow over time, and which are trading below their long-term value. To construct this side of the portfolio, we categorize long equity positions in three categories:

  • Growth Industry Leaders: Firms with top positions in growing markets.
  • Consistent Growers: Companies that exhibit steady earnings or revenue growth, or both.
  • Emerging Growth Companies: Names that are addressing a new market or carving out a niche in an existing one.

Opportunities in Overvalued Firms

The fund generally takes synthetic short positions in investments that we believe are overvalued (or to hedge against the fund’s long exposures). Here too, we apply a three-basket portfolio construct to categorize the fundamentals that we think make such companies short-sale candidates:

  • Cycle Victims: Cyclical companies that could be facing deteriorating industry dynamics or risks specific to the company or industry.
  • Stumbling Stalwarts: Firms that once exhibited steady earnings or revenue growth, but that we expect to decline due to technological changes, weakening business economics, or other factors.
  • Falling Stars: Fast growing businesses with premium valuations that we expect to decline because of approaching market saturation, increasing competition, or other factors.

Our Long/Short Investment Approach

  • Actively allocating the fund’s portfolio between long and short positions is designed to pursue long-term capital appreciation and lower volatility relative to broad equity indexes.
  • Because the fund does not seek to time the market, the fund generally will be weighted more toward long investments.
  • As an active, focused strategy, the fund typically will hold only about 30-40 names long, 30-40 names short.
Important Information

The Fund is offered solely to non-U.S. investors under the terms and conditions of the Fund’s current Prospectus. A copy of the full Prospectus and KIID for the Fund may be obtained by contacting the local Paying Agent through the Fund’s Transfer Agent, Brown Brothers Harriman Fund Administrator Services (Ireland) Limited or in the forms and literature section of this website. The Prospectus and KIID contain important information about the Fund and should be read carefully before investing.

Investments carry risks, including possible loss of principal. Additional risks may be associated with investments in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. A synthetic short position will lose value as the security's price increases. Theoretically, the loss on a synthetic short can be unlimited. Non-diversified funds can be more volatile than diversified funds. Investments in derivatives are subject to the risks associated with the securities or other assets underlying the pool of securities, including illiquidity and difficulty in valuation. Investments in the Fund are not insured, nor are they bank deposits or guaranteed by a bank or any other entity.

This material constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the “Act”) and the handbook of rules and guidance issued from time to time by the FCA (the "FCA Rules"). This material is for information purposes only and does not constitute an offer to subscribe for or purchase any financial instrument. Thornburg Investment Management Ltd. ("TIM Ltd.") neither provides investment advice to, nor receives and transmits orders from, persons to whom this material is communicated nor does it carry on any other activities with or for such persons that constitute "MiFID or equivalent third country business" for the purposes of the FCA Rules. All information provided is not warranted as to completeness or accuracy and is subject to change without notice.

The Fund is a sub-fund of Thornburg Global Investment plc, an open-ended umbrella type investment company with segregated liability between sub-funds, authorised by the Central Bank of Ireland (CBI) on 25 November 2011 as an investment company pursuant to the UCITS Regulations. Authorisation of the Company by the CBI is not an endorsement or guarantee of the Company by the CBI nor is the CBI responsible for the contents of the Prospectus or KIID.

To determine a fund's Morningstar Rating™, funds and other managed products with at least a three-year history are ranked in their categories by their Morningstar Risk-Adjusted Return scores. The top 10% receive 5 stars; the next 22.5%, 4 stars; the middle 35%, 3 stars; the next 22.5%, 2 stars; and the bottom 10% receive 1 star. The Risk-Adjusted Return accounts for variation in a managed product's monthly excess performance (excluding sales charges), placing more emphasis on downward variations and rewarding consistent performance. Other share classes may have different performance characteristics. © 2019 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Administrator: Brown Brothers Harriman Fund Administration Services (Ireland) Limited, Ireland, BBH.Dublin.TA@bbh.com +353.1.603.6490

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