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 2020 - Latest commentary
US markets declined in February, losing around 8% (despite starting the year strongly) on fears of the coronavirus. This followed one of the best years in history.
The value style of investment underperformed in the decline, a rare occurrence, losing around 1.5% more than the growth style of investment. This was in line with the streak in place since the end of 2016.
10-year treasury yields tumbled massively, falling from 1.6% at end of January down to below 1.2% at the end of February. This followed on from the previous month’s decline.
Commodities lost much less than equities, falling by around 1.6%, this was despite oil losing around 10% in the month and gold remaining steady.
Defensive sectors as well as Materials and Energy outperformed but were still down. Technology was the worst sector with Microsoft warning of a profit shortfall.
Exiting February, the fund was offering around a 50% discount to the markets on a profit’s basis, with a price-to-earnings ratio of 10 vs 20 for the markets. On a cash flow basis, the discount was even higher at 60%, while on a sales basis the discount was at a record 70%. This was coupled with a leverage ratio of two-thirds to the market, and a 40% higher return on equity. The dividend yield was at 3.7%, for the differential of 155bps vs the market. Active share remained around 96%.
Previous months’ commentaries are contained within the fund factsheets.