The Fund aims to achieve long-term growth of capital primarily through investment in securities quoted on markets in North America. In order to achieve the Fund's objective, the strategy invests in a wide range of companies, large and small, which reflect growth opportunities in various sectors of the North American and global economies.

The fund

  • Invests primarily in North America.

  • Managed by a highly experienced team.

  • Focuses on growing companies trading at a discount to their intrinsic value.

Meet the growth equities team

Chris Ford
Chris Ford
Fund Manager
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Tim Day
Tim Day
Fund Manager
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Giles Worthington
Giles Worthington
Fund Manager
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Why invest in the fund?

  • High active share with a growth style bias
  • Exposure to secular growth through a diversified blend of high-conviction holdings with attractive thematic attributes
  • The combination of using AI to identify opportunities and the fund managers’ experience gives us a competitive edge
  • Managed by an institutional-quality team with proven experience in thematic investment
  • One of the longest serving US equity fund managers in the UK

We believe growing companies exposed to longer-term secular growth drivers that create value and which trade at a discount to intrinsic value will outperform over the longer term.

Our approach works as we focus on business that are benefiting from or focused on thematic secular growth drivers – in other words, they are in the ‘right’ part of the equity market. However, we will only buy those companies if that growth potential is not fully reflected in the valuation. It is also important that the companies demonstrate a record of value creation or we believe have the potential to create value.

At the stock level, our internally developed artificial intelligence platform helps us to identify North American companies which have exposure to longer-term thematic secular growth drivers.

Environmental, Social and Governance

Active and ongoing engagement with companies rather than outright exclusion. We believe that over the long term, integration of robust ESG policies make good business sense.

  • We have always been mindful of issues which may impact the sustainability of returns over the medium to long term
  • ESG issues are considered when they may have a material impact on investment risk or return

We partner with MSCI, a global ESG and corporate governance provider, and ESG is fully integrated as follows:
 
  • All teams have access to the detailed ESG reports so include this risk analysis as part of their due diligence
  • Comparable company scores allow for best-in-class analysis at the sub-industry, sector and regional level
  • Quarterly investment committee meetings review ESG reports on each fund, looking at the overall score and challenging on the riskier or more controversial holdings.

 

We use a unique, proprietary AI platform to identify North American companies with exposure to our favoured long-term thematic secular growth drivers.

Tim Day, Fund Manager

Fund Commentary

October 2021

Market/macro backdrop
North American equity markets delivered further gains in October with the MSCI North America index posting a sterling total return of 5.2% in GBP (7.0% in USD – source: MSCI). North American equities were buoyed by a positive start to the Q3 earnings season but fixed income markets were volatile as inflationary pressures – and especially soaring energy prices – weighed on sentiment.
 
At the sector level, energy and consumer discretionary delivered outperformance versus the wider North American equity market, while communication services and consumer staples were the laggards.

Performance
The Fund produced a performance of 6.0% in September (source: Morningstar – B share class).

The MSCI North America index produced a sterling total return of 5.2% in GBP (source: MSCI).


Past performance is not a guide to future performance. Total return, NAV to NAV basis, net of charges.

Positive and negative attributors at stock level
Positive:              Alphabet, Generac, UnitedHealth
Negative:            Fiserv, Capital One Financial, Western Digital

Significant portfolio changes - buy/sells
Buys in October included Ulta Beauty and Keysight Technologies. Ulta is one of the leaders in the beauty & personal care category in the US with a strong position across digital and physical channels. It has a differentiated and crowd-pleasing shopping format that keeps customers coming back and is becoming a community hub for ‘Generation Z’ beauty enthusiasts. Keysight is a leading test & measurement equipment provider for electronic design, e-mobility, network monitoring, 5G and the Internet of Things.

There were no complete exits in October although we reduced our exposure to the electronic payments theme through reductions of Fiserv and PayPal. We also took some profits in SVB Financial.

Corporate/team highlights
We are pleased to report that October was another positive month for the Fund where we outperformed the index, primarily reflecting good stock selection, although being underweight communication services (which underperformed) also added to returns.

Outlook
As vaccine coverage improves in a number of countries, investors are increasingly trying to ascertain what the ‘new normal’ might look like. While there is plenty of pent-up demand, we also think that there is genuine interest in creating better and more resilient world than the one that existed before the pandemic. We believe that this should provide a supportive backdrop for a number of our favoured investment themes, which include clean energy, electric vehicles, artificial intelligence and the rebuild of infrastructure. Ongoing inflationary pressure and the Fed’s taper could lend support to the more ‘value’ oriented areas of the market in North America in the short term, but the long-term earnings growth profile of the Fund’s holdings remains robust.
 

Explore the details
Providing exposure to underappreciated growth utilising a thematic framework with the added benefit of AI-enhanced stock screening.

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Fund Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets.

The Fund invests mainly in North America, movements in exchange rates may result in frequent rises and falls in the Fund's share price.  Exchange rate changes may cause the value of investments to go down as well as up.

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The value of investments and any income from them can fall and you may get back less than you invested.