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
April 2019 - Latest commentary
S markets advanced just under 4% in the month of April. This was an acceleration from the previous two months’ gains and put the year-to-date total at more than 17%. This has been one of the best year-to-date advances in history, and the best start since 1998. Interest rates advanced slightly or by 10bps following their tumble, ending the month at around 2.5%. The US Dollar also advanced slightly, gaining around 0.5%. Commodities declined, giving back a large part of the year-to-date gains with gold also falling around 2%. Oil continued to advance before taking a breather at the end of the month.
Growth outperformed value by about 1% in April, adding 4.5% while value added 3.5%. This put growth’s year-to-date advance at more than 20%, while value has respectably advanced by nearly 16%. Value continues to lag growth by a large margin in the long term. Financials and technology acted as the best sectors this month, while health care and real estate declined. Other sectors that fared well included communication services and consumer discretionary. Over the past three and five years, growth has now outperformed value by 25% and 45% respectively, while over a past ten-year cycle the differential is at 120%.
The fund advanced by a little more than 3% in April. This was less than the market’s advance and slightly less than value.
Underperformance versus the market was driven by both stock allocation and stock selection. The structural underweight to technology led the relative returns, while stock picks in energy acted as an offset. Currency was broadly neutral.
The portfolio exited the month with a price-earnings ratio of 11.3 versus 19.5 for the markets. As such the discount widened to circa 45% from around 40% over the month. Other value metrics showed similar discounts on average, but on a price-sales basis the discount was higher at 60%. This was coupled with an average leverage which was at around two-thirds the markets’ level. Dividend yield was around 2.9% with active share hovering around 93%.
Previous months’ commentaries are contained within the fund factsheets.