Managed by Pieter Fourie and his team since launch in February 2014, the fund focuses on capital growth and aims to deliver excess returns over the MSCI World Index over the long term.

The fund:
  • Is managed by a highly experienced team with an award winning track record

  • Invests in best of class, high quality companies with strong growth prospects

  • Focuses on 25-35 companies and is unconstrained by the benchmark

Awards and ratings

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Meet the Global High Quality Team

Pieter Fourie, CFA
Pieter Fourie, CFA
Head of Global Equities
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William Ball
William Ball
Senior Equity Analyst
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Nicholas Bell
Nicholas Bell
Global Portfolio Manager
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Louis Jamieson, CFA
Louis Jamieson, CFA
Global Equity Analyst
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Shiraaz Abdullah
Shiraaz Abdullah
Global Equity Analyst
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Hannah Gooch-Peters
Hannah Gooch-Peters
Global Equity Investment Analyst
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Why invest in the fund?

  • Invest in 25 – 35 high quality positions at one time. High conviction and manageable
  • Attractive long-term strategy of investing in high quality companies, at reasonable valuations
  • Unchanged investment philosophy since 2008
  • Team culture of debate and discussion to exploit diverse experience
  • Current dislocation in the market offers a compelling entry point.

The philosophy and process has remained unchanged since the day it first launched in 2008: A high conviction stock selection approach investing in high quality, global businesses at reasonable valuations, with a view to outperforming the global equity market over the long term.

The fund invests with no reference to the index, focusing on businesses with durable business models and a sustainable competitive advantage. Typically these companies will yield high returns on capital, have low leverage and produce significant free cash flow after capital expenditure.

Far horizons 

When we invest in a good business, we do so with a time horizon that stretches far out into the future. Investors that joined us at launch will notice core holdings such as Microsoft, Johnson and Johnson and Yum! Brands are examples of a few positions in the strategy that we bought at inception and continue to hold to this day.

Our years of experience in active management is what adds value and our risk controlled framework is what protects us.

Our years of experience in active management is what adds value and our risk controlled framework is what protects us.

Pieter Fourie, Fund Manager

Fund Commentary

December 2021

Market/macro backdrop
Global equity markets reached new all-time highs in all major currencies by the end of 2021.

The outperformance of the US against emerging markets has been significant since June this year as well as over the last 10 years.
The Sanlam high quality strategy lagged global equity markets by some extent from early June 2021, when the US outperformed by a further 25% against emerging market.

2021 finished with the US at a 20 year relative high against the rest of the world.  Global and US bond yields have collapsed over the last eight weeks of the year, and reinforced an environment of US outperformance both through the stock market and reflected in US dollar strengthWithin the US market, investors have become more selective in areas like information technology.   In a surprising move this year, a company like Oracle is doing exceptionally well even though a year ago investors preferred faster growth narratives from names like PayPal and Amazon. 
We believe it might be a case of strong growth expectations already reflected for names like PayPal through high valuations – something we warned about throughout the year. 

There has been a dramatic recovery in certain cyclical areas throughout the last twelve months.  It is time to be more selective within cyclicals; a good example is General Dynamics, which finished up 44% for the year.  A year ago the concerns for their business jet division overshadowed a very attractive valuation.  Today business jet orders are at record highs.  And even though we still believe it is a high quality business, it is approaching fair value. 

In a world where the US continues to outperform across almost all sub-sectors, we need to be more selective from a global point of view. We combine cyclical exposure through the predictable business profile of a name like General Dynamics, and combine that with the short term headline risk in a recent investment like Yum China.  When you compare headline risks a year ago in a company like General Dynamics (Gulfstream was under pressure) and Abbvie (all investors knew that Humira is a huge risk, and the valuation was deeply depressed), we feel the opportunity has now shifted, to move away from those headline risks towards embracing excessive risk premiums in some parts of emerging markets and Asia in particular.  More specifically Yum China has a tremendous opportunity to expand their footprint in China and India over time, yet the Coronavirus has again given us an opportunity to invest more capital in the Yum! group, which has a history of investing in their core business, even when there appears to be short term challenges.  In fact, Yum! Brands reached a new all-time high by the end of the year, and we continue to remain shareholders after more than a decade. 

The challenge next year for investors will be to find quality companies which are miss-priced after a very long bull market.  Healthcare remains an attractive industry for us, even as companies like Roche, Johnson and Johnson and Anthem approach new highs.  Their valuations remain relatively attractive against a less favourable cyclical backdrop due to an increase in interest rates, inflation pressures and economic growth challenges which typically these companies can weather in a better way than the average business. 

The recent panic in subsectors of technology like the payments industry has created an opportunity to move in to names like Fiserv and Visa, and away from software related businesses which have performed well like Oracle and Sage.  It is important though, to combine strong earnings profiles with more predictable non-cyclical business models, like Becton Dickinson (healthcare equipment), NetEase (online gaming China), and Electronic Arts (gaming) which have fallen out of favour with investors but continue to operate in very attractive verticals, and look miss-priced for us as long term investors.  

On a headline basis, the US trades on a 60% premium to Europe, based on 27 times earnings versus 17 times earnings.  The premium is even more stretched when you consider less scientific valuation models like price to sales and the total market cap of the US stock market against its Gross Domestic Product.  In order for the US to continue to outperform, the large-cap names dominating its index have to maintain a high growth profile and maintain record high valuations.  We believe it will be a challenge for the US to outperform Europe to the same extent as the last ten years.  Not necessarily because of a lack of earnings growth, but simply the starting point of valuation.  Most large cap stocks in Europe frankly look expensive too  - one could not argue the likes of ASML, LVMH, L’Oreal are much (or at all) cheaper than the top 20 US businesses.  We have tilted the portfolio towards Asia, as we believe this is an opportunity versus the rest of the world, particularly when you take in to account the divergence in returns and valuations of the US versus China.  This increase has been roughly 10%; historically we have enjoyed good returns from emerging markets.
We still have a very healthy US exposure in the fund but are 23% below the benchmark weight for global equity indices.


Performance
In December the fund’s net asset value increased by 3.9%  vs. the market’s return of 2.2% in sterling terms.
Since inception the Sanlam Global High Quality Fund has returned 152.7% in sterling terms.
Global equities returned 175.3% over the same period, with the average global equity fund returning 140.6%.
 
Since inception the performance of the fund (in GBP) against the market is shown below:               
               

Cumulative performance for period ending 31.12.21 £  2014 2015 2016 2017 2018 2019 2020 2021 Inception
Sanlam Global High Quality Fund 12.5% 12.1% 28.7% 17.5% -2.9% 18.7% 6.2% 8.3% 152.7%
MSCI World Net Total Return 11.4% 4.8% 28.3% 11.7% -3.1% 22.7% 12.6% 22.9% 175.3%
IA Global Peer Group 6.7% 2.9% 23.9% 13.9% -5.7% 22.0% 14.8% 17.6% 140.6%
 
Annualised in GBP
 
  1 Year 3 Year 5 Year 7 Year SI
Sanlam Global High Quality Fund 8.3% 10.9% 9.3% 12.3% 12.6%
MSCI World Net Total Return 22.9% 19.3% 12.9% 13.8% 13.8%
IA Global Peer Group 17.6% 18.1% 12.1% 12.3% 11.9%

 
* Fund launched 28th of February 2014
* C Share Class (as at 31.12.21). Fund performance is calculated on a NAV to NAV basis, net of charges and assumes net income is reinvested. Peer group is the IA global
Since investors may be liable to external fees, charges and taxes, the illustrated returns are not meant to provide a measure of actual return to investors.
Sources: Sanlam Asset Management (Ireland), Sanlam UK, Bloomberg, Morningstar GBP returns since fund inception on 28 February 2014 to 31st December 2021
Comparison index is the MSCI World Net Total Return (in GBP).


Positive and negative attributors at stock level
Positive:              Anthem (+14%), Sabre (+14%) and Yum! Brands (+13%)
Negative:            Alibaba (-7%), NetEase (-5%) and Medtronic (-2%)

Significant portfolio changes - buy/sells
During December we sold our position in Abbvie and invested more capital in Yum China and NetEase– increasing our emerging market exposure further

Explore the details
A focused portfolio of the highest quality and attractively priced global companies.

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Fund Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets.

The Fund may invest in companies based in emerging markets which may involve additional risks not typically associated with other more established markets such as increased risk of social, economic and political uncertainty. The Fund has holdings which are denominated in currencies other than sterling and may be affected by movements in exchange rates. Consequently the value of an investment may rise or fall in line with the exchange rates.

Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website. (Notes 1, 3 and 4).

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