Ensemble Fund Investor Letter – Fourth Quarter 2021

25 January 2022 | by Ensemble Capital

Below is the Q4 2021 quarterly letter for the ENSEMBLE FUND (ENSBX). You can find historical Investor Communications HERE and information on how to invest HEREEnjoy!

4Q21 1 Year 3 Year 5 Year Since
Ensemble Fund 8.53% 24.70% 31.57% 21.42% 18.68%
S&P 500 11.03% 28.71% 26.07% 18.47% 16.40%

*Inception Date: November 2, 2015

Performance data represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance data current to the most recent month end are available on our website at www.EnsembleFund.com.

Fund Fees: No loads; 1% gross expense ratio.

For much of the past two years our quarterly letters have focused on economic and COVID related commentary. The urgency of these issues, and the complex and dynamic ways they have strongly influenced company level fundamentals, required that we prioritize analyzing and acting on these issues. And since we seek to explain in these letters our assessment of the issues that are most relevant to our investment strategy, these issues have dominated our commentary.

Macroeconomic factors and COVID will continue to impact our portfolio and our assessment of investment opportunities for the foreseeable future. But today, they are better understood as part of the underlying fabric of uncertainty on which investors always operate. This isn’t to diminish their importance, but rather to accept that risks and opportunities related to these issues are now simply part of being an investor in equities. With the Delta wave we saw only modest fluctuations in economic activity and stock market performance. The same has been true, so far, during the rapidly spreading Omicron wave, which as of this writing has not materially negatively impacted the stock market or US economy. Our point is not that COVID will no longer impact the economy or market, rather it is that COVID is no longer a novel source of uncertainty, but rather is one of many sources of uncertainty that equity investors always need to contend with.

Many more people will get COVID. A lot more people will go to the hospital, which are currently filling up towards capacity. But American consumers and businesses have also learned to adapt to engaging in commerce even in the midst of a pandemic.

If you look back at history, you’ll find that macro issues, whether they be economic or issues like COVID, terrorism, geopolitical conflict, or trade wars to cite a few examples, ebb and flow in their relative influence over equity market performance. But there is no doubt that these factors reached a level of stock market influence in 2020 that is only comparable to a handful of past historical events.

If you look at the top 20 largest one-day up and down moves in the US stock market over the last century, you’ll find that all of them occurred during the Depression, the Financial Crisis, COVID and the 1987 stock market crash. While the 1987 stock market crash was a technical event contained to financial markets, the other three events can very reasonably be considered the three most important macro events to influence corporate America.

COVID is not over. Economic fluctuations will always occur and always matter. But the issues on which our team is now focused in managing our investment strategy has begun to revert to the company specific analysis on which we have long spent the vast majority of our time.

So, in this letter, we will cover the notable detractors and contributors to our fourth quarter investment performance and then offer a discussion of an aspect of our investment strategy that we have not previously offered much commentary on.

Notable detractors from our performance during the fourth quarter came from our investments in Illumina, Netflix, and Blackline.




Investors should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The prospectus contains this and other information about the Fund. You may obtain a prospectus at www.EnsembleFund.com or by calling the transfer agent at 1-800-785-8165. The prospectus should be read carefully before investing.


Important Risk Information

An investment in the Fund is subject to investment risks, including the possible loss of the principal amount invested. There can be no assurance that the Fund will be successful in meeting its objectives. The Fund invests in common stocks which subjects investors to market risk. The Fund invests in small and mid-cap companies, which involve additional risks such as limited liquidity and greater volatility. The Fund invests in undervalued securities. Undervalued securities are, by definition, out of favor with investors, and there is no way to predict when, if ever, the securities may return to favor. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. More information about these risks and other risks can be found in the Fund’s prospectus. The Fund is a non-diversified fund and therefore may be subject to greater volatility than a more diversified investment.


Distributed by Rafferty Capital Markets, LLC Garden City, NY 11530.


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Past performance is no guarantee of future results. All investments in securities carry risks, including the risk of losing one’s entire investment. The opinions expressed within this blog post are as of the date of publication and are provided for informational purposes only. Content will not be updated after publication and should not be considered current after the publication date. All opinions are subject to change without notice and due to changes in the market or economic conditions may not necessarily come to pass. Nothing contained herein should be construed as a comprehensive statement of the matters discussed, considered investment, financial, legal, or tax advice, or a recommendation to buy or sell any securities, and no investment decision should be made based solely on any information provided herein. Links to third party content are included for convenience only, we do not endorse, sponsor, or recommend any of the third parties or their websites and do not guarantee the adequacy of information contained within their websites. Please follow the link above for additional disclosure information.