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.
The fund:
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Is managed by a highly experienced and top performing value manager
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Adopts a disciplined value style with a distinctive quality overlay
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Offers lower risk than the broad market with low correlations to other US funds
December 2020 - Latest commentary
US markets capped off a great 2020 by advancing another 4% in December following the 11% rise in November. This put the year-to-date tally at above 18%. It was a great year for US equities, despite the rise of the pandemic.
Value underperformed again in the final month of 2020, after two strong months in October and November where it led the markets - especially during the strong November rebound. Year-to-date the value and dividend styles ended up only a couple of percent, despite the strong markets. Growth indices on the other hand had a fantastic year, adding 38%. This put the 2020 differential between growth and value at 35%.
This brought the three, five and ten-year differentials to 67%, 98%, and 217% respectively.
The 10-year treasury yield continued its prior month advance, finishing up circa 91bps. Commodities had another great month, adding around 5%. Gold also advanced strongly, by about 5%.
Technology, financials and consumer discretionary acted once again as the best sectors. Energy, materials and yield-rich sectors underperformed.
The fund underperformed the markets in December, driven by the style underperformance which followed two strong outperformance months during the value rebound. Sector allocation drove most of the differential, while currency added value. Most value was added in the cyclical sectors.
The fund exited 2020 very attractively priced. It offered significant discounts on all valuation metrics, while exhibiting much better quality metrics, lower leverage and higher return on equity. Active share remained around 98%.
Previous months’ commentaries are contained within the fund factsheets.