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Fund Managers' Blog

Mark Williams: Five stocks to crow about in the Year of the Rooster

This article was first published by Citywire Wealth Manager on 16 February 2017

• Lite-0n Technology CorpGiving you the dual-camera you never knew you wanted

Lite-On manufactures power supplies, components for consumer electronics, and optoelectronics.

Jamie Clark: Taking the edge off our pharma exposure

We are longstanding investors in the pharmaceutical sector, but think investors should be more critical in evaluating the chance of drug pipeline failure and risks to capital.

Mark Williams: What prospects for China in the Year of the Rooster?

The Liontrust Asia Income Fund had slightly over 40% exposure to Hong Kong and China at the start of the year. All of this is via companies listed in Hong Kong (not A-shares, listed in the Chinese mainland markets), but they are companies with exposure to the mainland Chinese market, rather than the Hong Kong economy, which we think will struggle in a world of rising United State interest rates.

Liontrust fund managers’ “Reasons to be Cheerful”

Having given us their Halloween “Reasons to be Fearful”, we asked the same Liontrust fund managers to highlight aspects of their research which point to a more optimistic outlook for 2017

Olly Russ: Renzi loses Italian Job

Although market reaction is at an early stage and things could yet reverse, the prophecies of doom heard last week seem currently wide of the mark, with no real apparent signs of stress in the wider European banking system. These days it seems that the buy the dip mentality is so ingrained, that sometimes investors don’t bother waiting for the dip.

John Husselbee: A desynchronising world

Are you still playing Pokémon Go? The online game was released to the world in early July this year and soon went viral over the summer. However the game today is seemingly unfashionable with its rapid decline in recent months clearly charted by Google Trends. And whilst gamers are abandoning Pokémon Go, it seems that investors are beginning to shy away from government bonds.

Olly Russ: How will markets react to the Italian referendum result?

We are unable to rehearse here a full summary of the political debate for reasons of space and life expectancy, but this is not a simple Right versus Left issue (Berlusconi is on the No side, along with the Greens, the Italian Left and Five Star), and if we think the anti-establishment vote is likely to win, it is not easy to identify which side that is. A proposal to sack several hundred politicians hardly sounds traditionally pro-Establishment. There is a feeling perhaps that the ‘shy’ vote is for Yes, and turnout will likely be higher in the North which is also more pro-Yes, but the expectation is that the proposal will fail. In this piece, we would like to concentrate on market outcomes.

Jamie Clark: Autumn Statement initial thoughts

Philip Hammond’s inaugural – and final – Autumn Statement confirms our view that fiscal activism has made an emphatic comeback. The headline Productivity Fund initiative paid lip-service to the Keynesian commonplace that productivity is explicitly a function of government largesse. Although a mixture of both novel and preannounced measures, the £23bn initiative’s emphasis on R&D, housing, transport and digital infrastructure signals that the state will be assuming a bigger role in the economic life of the country. This was underscored in the long-term commitment to increase infrastructure expenditure from 0.8% of GDP in the present fiscal year, to 1-1.2% on an ongoing basis. Modest in the context of the multi-decade decline in infrastructure expenditure, but an inflection that is party to a more global recourse to fiscal policy.

Hugo Rogers: A dispassionate look at 'Trumpflation'

Trump’s election is an emotive topic, but as investors we must make dispassionate assessments. The President-elect will wield executive and legislative power that Barack Obama could only dream of, so the consequences of his victory will be profound. Over 50% of the Liontrust GF Global Water & Agriculture Fund is invested in the US, and an early appraisal suggests this exposure could benefit from a Trump administration.

Jamie Clark: What ‘Trump-priming’ of US economy means for our Macro-Themes

This week’s US election outcome presents a timely opportunity to revisit and update our prior blog entry. In ‘Why Friedman is out and Keynes is back’, I discussed the rehabilitation of Keynesian economics and the likelihood of increasing infrastructure spend. The logic was clear: the Central Bank response to the Great Financial Crisis had produced an uneven, dissatisfactory recovery and expended most viable monetary options; this had encouraged much introspection, with public investment now broadly discussed and accepted as an alternative.

Anthony Cross: Where investors should seek sanctuary from inflation


A key tenet of our investment process is the importance of barriers to competition. We have moulded our approach around the identification of characteristics which we believe allow companies to sustain profits in the face of competitive threats.  It is this theoretical ability to generate a higher than average level of profitability for longer than expected which we refer to as Economic Advantage. 

Another way of thinking about barriers to competition is in the form of pricing power; the ability to maintain prices and profit margins in a crowded and competitive market place. 

Liontrust fund managers’ scariest charts

As Halloween approaches, Liontrust’s fund managers highlight the most frightening data they’ve come across in their research

Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a regulated investment advisor or licensed stock broker before investing.

Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.