We're thrilled to announce the launch of Titan Offshore, our international investment strategy complementing our Flagship and Opportunities portfolios.
Offshore takes the same playbook we’ve been executing with our U.S. strategies, and applies it to emerging and developed markets.
The correction in international markets over the past few months has presented a rare opportunity to buy wonderful businesses overseas at attractive prices. Hall-of-fame businesses from China to Latin America are now trading at ~20-40% discounts versus just a month ago. These are global gems we've had on our watchlist for years, and a compelling entry point has finally arrived.
Additionally, Offshore will add healthy diversification to our U.S. growth equity exposure from Flagship and Opportunities.
See the above links for a quick video and full investment deck. Be sure to update your Titan app to check it out.
The Quick 101 on Offshore
Portfolio Construction: 15-25 stocks / ADRs of foreign-domiciled companies
Positions: Conviction-weighted (based on our risk/reward assessment)
Size: Primarily large companies (average market cap: ~$160 billion)
Geography: Emerging and developed markets (e.g., Asia, LatAm, Europe)
Time Horizon: 3-5 year target holding period (like Flagship and Opportunities)
Philosophy: Extremely picky. Businesses must still meet our rigorous investment checklist (long growth runways, durable competitive advantages, excellent unit economics, attractive valuations).
Fee: Still the same 1% annual AUM fee and 0% performance fees (or $5/month if you have <$10K deposits at Titan). Typically this sort of strategy could cost 2% AUM + 20% performance fees.
Referrals: All existing referral credits will apply to Titan Offshore assets.
Our bets: China's operating system, French luxury goods, the "Square of Brazil," and more
Offshore is about investing in emerging and established "compounders" across diversified global markets that have the potential to generate outstanding returns relative to the non-U.S. index benchmark.
"Can you give me a quick preview of the sorts of companies in Offshore?"
Tencent (Ticker: TCEHY)
If you know China, you know WeChat. This Tencent-owned "super-app" is used by virtually everyone in China for chat/video, payments, shopping, hailing cabs, paying bills, and much more. We see it as a toll road on China's growth.
Price Target: $125 by 2023 (+15% annualized)
LVMH Moët Hennessy Louis Vuitton (Ticker: LVMUY)
France's leading luxury goods group includes 75 prestigious brands which took decades to build (e.g., Louis Vuitton, Sephora, Bvlgari), creating high barriers to entry and pricing power.
Price Target: $200 by 2023 (+15% annualized)
PagSeguro (Ticker: PAGS)
Known as the "Square of Brazil," this LatAm market leader in digital micro-merchant payments is profitable and poised for accelerating growth post COVID-19 as local entrepreneurs recover.
Price Target: $96 by 2023 (+28% annualized)
Why invest in Offshore?
Many overseas markets are far earlier in their growth "S-curves" than the U.S. on key secular trends. Some of our favorite Offshore themes include gaming, e-commerce, and digital payments. We have identified emerging markets like China, Brazil, and Russia for which these themes are seeing accelerating adoption off of a very low base of penetration.
Global Opportunity Set
Did you know that 40%+ of the global market cap is held in foreign-domiciled stocks? Focusing your investments in only U.S. companies is ignoring a large swatch of international opportunities. To stay ahead of the curve on secular trends like globalization and cyclical trends like "reflation" in the U.S., we believe you should have overseas exposure.
We are big proponents of concentration ("focus on only your best investment ideas"), but smart diversification can reduce risk without sacrificing returns. We expect Offshore's exposure to emerging and developed markets to reduce your portfolio volatility over time.
How much should I invest?
We have revised our allocation recommendations to incorporate the new Offshore strategy. You can find these recommendations in the app by clicking the + button in the navigation bar > entering an investment amount > clicking Next: Investment Strategy.
Your personalized recommended mix depends on your risk profile (including investment horizon). To achieve this recommended mix, we advise that you add new capital to your account. Reallocating/liquidating existing invested funds to invest in Offshore would potentially trigger tax consequences on any gains realized in a taxable account which we want you to avoid.
Reflecting these changes and our annual update, we wanted to provide you with updated versions of Titan’s Form ADV Part 2A, Account Management Agreement, Form CRS, and more, which are available on our website here. Please reach out with any questions.
Update your app!
We are so thrilled to be launching Offshore. We believe it will bring attractive global exposure and smart diversification to your Titan portfolio, aiming to boost your risk-adjusted returns over the long term.
Update your app in the Apple or Google Play store now to check it out.