The fund was launched in April 2011. It follows a disciplined value investing strategy, seeking to deliver superior investment returns to the wider equities market (MSCI World) over the long term. 

The fund:
  • Focuses on strong companies with above-average returns on capital over a business cycle

  • Follows a highly disciplined value investing approach to buy these businesses when out of favour and trading at a significant discount to their intrinsic value.

  • Offers diversified exposure across industries and geographies, through a portfolio of 40 to 70 stocks.

December 2018 - Latest commentary

World markets retracted in the high single digits in USD terms, driven by the US, as the hopes for a trade deal with China were quickly dashed and as the arrest of Huawei’s CFO in Canada further added to political tensions between the two countries. The falling oil price, a flattening yield curve combined with high levels of corporate and government debt cast doubts over inflation expectations and the sustainability of the US growth cycle. The threat of a Federal shutdown at the end of the month did not help sentiment. The USD was either flat or down against the main currencies, while the oil price continued falling, reaching $50 as OPEC failed to reach an agreement on production cuts. In this environment materials and utilities performed the best with energy, industrials, healthcare, IT and financials lagging the overall market.
The fund underperformed the market by about one point on the back of our overweight positions in healthcare, financials and energy as well as negative selection consumer discretionary. Signet Jewelers, Michael Kors and Norwegian Cruise Lines were all victims of deteriorating macroeconomic sentiment. Signet in particular fell almost 40% as the market punished the stock on high promotional activity and falling gross margins. Within the context of the company’s restructuring, we find this move entirely irrational. Signet is generating positive organic growth and good cash flow, while having a conservative balance sheet. At 5.5x normal earnings and a covered 5% dividend yield, we own a market leader at a fraction of its intrinsic value.
AmerisourceBergen was also a significant detractor as the stock was dragged down along with the rest of the healthcare sector. Pharma distribution remains one of our favourite hunting grounds as it is the least exposed to political or business disruptions, while being naturally hedged against inflation and benefiting from powerful economics in the form of scale and entrenched relationships. Conversely, the fund was rewarded by a broad selection of companies – Malaysia Airports, Imperial Brands, and SJM holdings. Notably, WPP performed strongly after laying out its restructuring plan at its analyst day, corroborating our long term thesis.

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Fund disclaimer

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 below.

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.

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