Comus Investment, LLC has released its comprehensive annual letter for 2025, highlighting a year of robust performance, particularly for its international clientele, even as regulatory hurdles impacted U.S. investors. The firm navigates a market characterized by high valuations and selective opportunities, adopting a prudent strategy focused on pricing rather than timing. Changes in advisory fee structures introduced by InteractiveBrokers are also detailed, offering a notable benefit to clients. Looking ahead, Comus Investment signals a potential shift towards private communications, reinforcing its commitment to existing relationships.
The firm achieved an impressive 83.11% return for international clients, a stark contrast to the experience of U.S. clients who faced limitations on purchasing small Hong Kong equities. This discrepancy underscores the firm's strategic advantage in markets less accessible to American investors. With a significant portion of its assets under management (AUM) from international sources, Comus Investment's success in undervalued global markets is evident. The letter also addresses the broader market environment, noting an exceptionally calm yet expensive period for equities, which prompts a cautious stance and a growing cash position for U.S. portfolios. This approach is guided by stringent pricing criteria, ensuring that investments are made only when they align with the firm's long-term return objectives.
Navigating Market Dynamics and Regulatory Impacts
Comus Investment, LLC reported a prosperous 2025, primarily driven by strong performance for its international clients, who saw an impressive 83.11% return. This success was achieved despite new restrictions from InteractiveBrokers that hindered U.S. investors from acquiring small Hong Kong equities, a market where Comus Investment found significant value. These limitations, described as "asinine" by the firm, created a notable disparity in returns between U.S. and international portfolios. The firm's ability to capitalize on undervalued international markets, particularly in Hong Kong and two European companies, highlights its expertise in identifying and leveraging global opportunities even amidst regulatory challenges.
The firm's 2025 annual letter detailed a year of significant returns, largely propelled by its international client base. These clients, representing 94% of the firm's assets under management, benefited from strategic investments in small Hong Kong equities, yielding an impressive 83.11% gross return. This success came despite InteractiveBrokers' decision to restrict U.S. investors from purchasing such assets, a move that the firm believes unfairly penalized American clients. Comus Investment's founder emphasized the firm's commitment to buying into markets when fear is high and prices are low, a strategy that paid off handsomely in the recovering Hong Kong and Chinese markets. Beyond Hong Kong, the firm also made substantial investments in European companies, demonstrating a diversified approach to seeking value in global markets.
Strategic Portfolio Adjustments and Client Engagement
In response to prevailing market conditions, Comus Investment is making strategic adjustments to its portfolio, increasing cash positions for U.S. clients to an unprecedented 11%, while international portfolios are expected to follow suit. This reflects a cautious outlook on current market valuations, which are perceived as calm but expensive. The firm's investment philosophy prioritizes attractive pricing over market timing, emphasizing patience and strict criteria for future investments. Furthermore, the letter discusses a beneficial change implemented by InteractiveBrokers, limiting annual AUM fees to 2%, which provides a tangible advantage for clients who do not qualify for performance-based fees. The firm also hinted at a future transition to private annual letters, aiming to reward the loyalty of its initial clients and streamline communications.
As global equity markets exhibit high valuations, Comus Investment is proactively adjusting its portfolio strategy. U.S. client portfolios currently hold a record 11% cash, reflecting the firm's disciplined approach to investing only when prices meet its stringent criteria. International client portfolios, while fully invested, are anticipated to increase their cash holdings soon as selling opportunities arise. This focus on "pricing, not timing" allows the firm to patiently await more favorable investment opportunities, even if it means holding cash for extended periods. Additionally, InteractiveBrokers' new policy, capping annual AUM fees at 2%, offers a welcome reduction from the previous 2.52% for clients who do not meet the high net worth requirements for performance fees. This change underscores a continued effort to align client interests with the firm's success. Looking forward, the firm expressed its intention to potentially discontinue public annual letters, opting instead for private communications to its long-standing clients, reinforcing a personalized approach to client relationships.