Managed since December 2014 by the same manager and with the MSCI North America Index as a benchmark, the fund invests in attractive US companies with sustainable dividend yields.
Is managed by a highly experienced and top performing value manager
Adopts a disciplined value style with a distinctive quality overlay
Offers lower risk than the broad market with low correlations to other US funds
June 2020 - Latest commentary
US markets continued on their strong advance of the previous two months, when they had risen by 13 and 5% respectively, and added around 2% in June. Reopening prospects helped drive the advance, following the Covid outbreak.
The value style lagged significantly again, finishing negative, but growth style added more than 4%, for a monthly differential of a record 5%
Year-to-date the value style is down 17%, while the growth style is up by 9%, continuing a tale of two markets with a six-month differential of 26%.
The 10-year treasury yield ended up flat at 65bps, having witnessed a rally early in the month. Commodities overall were also flat, despite a rebound in oil.
Technology led the market, accounting for the majority of the 2%+ returns. Health care and utilities were the worst performing sectors.
The fund outperformed the markets, despite Technology accounting for the majority of the markets’ returns. In the process it outpaced its value style by almost 4%. Stock selection accounted for all of the outperformance, led by Industrials and Consumer Staples while sector allocation was a major negative again, due to the style headwind. Currency was positive.
The fund exited June with a price to earnings ratio of 12.2 vs 22.7 times for the market, or an almost 50% discount. The dividend yield was at 375ps, vs. 195bps for the market, a 180bps differential. This was coupled with a leverage ratio that was about two-thirds that of the market, and a ROE 50% higher. Active share remained around 95%.
Previous months’ commentaries are contained within the fund factsheets.