The Palm Valley Capital Fund invests in small cap stocks. While our Fund is new, its underlying absolute return-based investment strategy is not. We have practiced the same strategy throughout our careers in investment management.
For the third quarter ending September 30, 2021, the Palm Valley Capital Fund declined 1.06% compared to losses of 2.85% and 3.67% for the S&P SmallCap 600 and Morningstar Small Cap Index, respectively.
The Fund’s securities declined 3.4% over the period, which was mainly due to our precious metals holdings. Cash represented 79.8% of Fund assets at quarter end. This was a slight reduction over the period. We believe the Fund’s average discount expanded.
We did not completely sell any positions during Q3. During the quarter, we purchased TreeHouse Foods, the market leading provider of private label foods in the U.S.