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
February 2019 - Latest commentary
US markets have seen a strong start to 2019. January saw the S&P rise more than 8%, with February seeing a further 3%, for a YTD advance of nearly 12%. This follows immediately on from one of the weakest Decembers on record, where markets fell by -9%. Value has seen decent performance since the beginning of the year, advancing almost inline with growth names in February. Over the past ten-year cycle, growth has now outperformed value by around 120%.
Technology, financials, industrials and energy acted as the best performing sectors, effectively adding a cyclical bias to the rally and a repeat of January trends. Real estate, communication services and materials were the most notable underperformers.
In bond markets, the US 10yr yields continued to climb, closing in at around 2.75%; the USD strengthened marginally. The Oil price also rose. Gold declined following a multi-month rally.
The fund marginally underperformed the markets during the February rebound, performing broadly in-line with our style benchmark. YTD the fund is in-line with markets and slightly ahead of style.
All the slight underperformance versus markets came from sector allocation as style lagged. Stock selection was neutral and currency exposure added marginally over the month.
The portfolio ended the month with an average dividend yield of 3.15%, 115bps ahead of the benchmark. Other valuation metrics also showed highly attractive discount differentials, with levels near 35% on both P/E and P/Book ratios. On a P/Sales basis, the discount was most notable at around 60%. Active share hovered at around 93%.
Previous months’ commentaries are contained within the fund factsheets.