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
November 2018 - Latest commentary
US markets recovered partly from the sell-off during October, advancing almost 2%. For the year markets are now back in positive territory, with one month left to go.
In the meantime the US 10-year treasury yields fell back down, moving to below 3% again from the 3.2% reached at the end of October. The US Dollar also had a seesaw pattern over the month, before finishing exactly where it started. For the year the US currency remains in strong form. Oil continued to be smashed down continuing the heavy downward movement from the past month, and having lost as much as two-thirds of its value in just two months, from $75 to $50. Gold advanced a couple of percent.
The value style led the markets in the rebound, adding 3% while the growth style was up only 1%. Year-to-date growth is still significantly leading and outperforming, having added 8% vs. value, which added less than 2%. This follows on the footsteps of 2017 when growth outperformed value by 16%. Over a 5-year period growth is ahead by around 45% now, and over 10 years it is ahead by more than 115%.
Healthcare was the best performing sector for the month, leading the markets while financials, industrials and consumer discretionary also had a solid month. Technology lagged, as well as energy taking its cue from the oil price.
The fund slightly underperformed the markets in November, following last month’s outperformance, and as such also underperformed value benchmarks.
The portfolio’s average dividend yield came back to 3.4% exiting the month, while the market’s yield was at less than 2% making for a historically attractive and wide differential of almost 150bps - levels which have not been seen for some time. Other valuation metrics also showed highly attractive discounts, with levels reaching almost 40% on price to earnings and 65% on price to book basis. Price to sales also had a notable discount at almost 70%; highlighting the value characteristics. This was coupled with an average leverage which was around 45% lower. Active share hovered around 94%.
Previous months’ commentaries are contained within the fund factsheets.