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Julian Fosh, Economic Advantage: Why we (still) like GlaxoSmithKline

Recent short term disappointments in the form of lacklustre Q2 numbers and the ongoing Chinese corruption investigation have not, in our opinion, altered GlaxoSmithKline’s long-term characteristics or fundamentals, although they have driven the share price to a level at which it offers compelling value. The shares now offer a prospective return on capital almost twice that of the market average, yet are trading on valuation levels which are well below the market, while its management has explicitly committed to align corporate strategy with enhancement of shareholder value.

Jan Luthman, Macro-thematic: Accounting for our Financials exposure

We have a number of macro themes active within the Funds, many of which are interwoven, and few run along pure sector lines. A quick glance at the Macro Equity Income Fund’s industry allocation shows a 9% overweight to Financials versus the FTSE All-Share weight of 24.8%, which may lead some to conclude we have an upbeat assessment of the outlook for banks, its largest component. However, breaking Financials down to the next sector level – Banks, Insurance, Financial Services (which includes asset managers) and Real Estate – gives a clearer picture of the Macro Equity Income Fund’s various exposures and shows that we have a large underweight to the banks sector.

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.