Fund manager reveals the rule that made him a 2,000% return on one stock

Boston Partners' $5.8 billion Global Premium Equities fund, managed by Christopher Hart, achieved a 22% net gain year-to-date through July, significantly outperforming the MSCI World Index's 15.2% return (as cited for 'so far in 2025'). This performance highlights their disciplined value investing strategy, which identifies companies with attractive valuations, strong fundamentals, and positive momentum. A key success was their investment in Rheinmetall, acquired in 2019 and fully divested this year for a 2,056% return, capitalizing on the stock's 209% surge (as cited for 'since the beginning of 2025') driven by increased European defense spending and demonstrating the fund's timely entry and exit based on intrinsic value.

Analysis

The Boston Partners' $5.8 billion Global Premium Equities fund demonstrates the efficacy of a disciplined value investing strategy, delivering a 22% net return year-to-date through July, significantly outperforming its MSCI World benchmark's 15.2% gain. This performance is rooted in a strict "three-circle rule" focusing on attractive valuation, strong fundamentals, and positive business momentum. A prime example of this strategy in action is the fund's investment in Rheinmetall. The position, initiated in 2019, was fully divested this year for a 2,056% total return. The exit was executed despite the stock's continued strength—a 209% surge since the beginning of 2025—driven by increased European defense spending. According to manager Christopher Hart, the sale was a function of valuation discipline; the stock's multiple, even when priced against 2027/2028 earnings forecasts, had expanded beyond the parameters of a value investment. This case highlights a contrarian approach of selling into strength and reallocating capital once a holding's valuation is deemed to have exceeded its intrinsic value, a strategy that contrasts with momentum-driven approaches, even if it resulted in underperforming the S&P 500 in the prior year.

Key Decisions for Investors

• Investors should consider the Boston Partners strategy as a case study in the importance of maintaining strict valuation discipline, especially for locking in gains on high-flying stocks that have transitioned from value to growth.
• For those holding positions in Rheinmetall or other European defense equities that have experienced significant multiple expansion, this successful exit serves as a prompt to reassess whether current valuations adequately reflect future growth prospects or if the risk-reward profile has become less favorable.
• The fund's performance illustrates that disciplined value strategies can still generate significant alpha, suggesting that investors may benefit from allocating to managers who rigorously adhere to a defined process for both buying and, crucially, selling assets based on intrinsic value rather than market sentiment.