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Liontrust Global Dividend Fund Fund

August 2021 review
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

The Liontrust Global Dividend Fund returned 1.3% in August. The MSCI World Index comparator benchmark returned 3.5% and the average return in the IA Global Equity Income sector, also a comparator benchmark, was 2.7%.

As Covid-19 concerns subside in India, HDFC Bank (+14.2%) has benefited from an improving economic backdrop. The Indian bank continues to take domestic loan market share, rising from 6.2% only five years ago to 10.9% last year. Importantly, HDFC has maintained strong asset quality during the crisis, and improved its contingency buffers (which remain unutilized). We expect the pace of loan market share gains by HDFC to remain strong, given its strong funding franchise and expansion into interior India. These characteristics will drive strong dividend growth over the next five years and position the company to benefit as economic activity rebounds after a difficult 18 months.

In June, a long-term holding of the Fund, Brookfield Asset Management (BAM), spun off economic interest in Brookfield Reinsurance Partners (+13.9%). The spin off entitled one share of Brookfield Reinsurance for every 145 shares of BAM – from the outset heavy institutional selling over the first two weeks of trading enabled us to easily build a position at very attractive prices. Brookfield Reinsurance was created to take advantage of the spread between financial debt securities and real assets – for instance, the yield achieved from holding government debt or investment grade credit versus infrastructure investing.

The mismatch that ranges between 300 to 400 bps enables Brookfield Reinsurance to solve the mismatch issue between long-date liabilities for pension plan owners and the returns Brookfield can achieve. Post the spin out, the CEO of BAM took a 10% stake in the Reinsurance company and started an acquisition led strategy to consolidate the insurance/pension industries back book with the announcement of their first acquisition of American National for $5bn. What we expect is the first of many acquisitions as the company takes advance of the mismatch. 

Alibaba (-11.6%) continues to suffer from increased regulatory scrutiny from Chinese officials. The mounting pressure is focused on Alipay, which Alibaba owns a 30% stake, who is disintermediating the Chinese financial services sector. This digital first financial services company has completely upended the slow-moving incumbents by providing “pay without card”, “buy now pay later”, and investment services with low friction costs to its already large customer base acquired through its relationship with Alibaba. We expect the government to reduce Alipay’s market power to level the playing field against incumbents and new upstarts but longer term we anticipate Alipay to emerge stronger due to the level of inefficiencies in the Chinese financial system.

We expect the volatility in Alibaba’s stock to persist but remain positive on the longer-term fundamentals of the company. Given the increased volatility of the stock price, we have taken advantage of the recent bounce and reduced our position to 2.4% so that one individual stock does not drive the performance of the portfolio. We still see its leadership position in Chinese e-commerce, emerging outbound e-commerce platform, entertainment, and cloud services as incredible difficult to replicate assets positioned to benefit as Chinese economic growth drives middle class prosperity.

Amadeus (-5.8%) stock price remains under pressure after its significant bounce around this time last year – now having retraced all its gains after the vaccine bounce. However, over the last 12 months the company has gone from strength to strength and is now ramping up efforts to gain market share from beleaguered competitors. For instance, the company has just won a large Etihad contract from Sabre for its full suite of services. Importantly, the company has extracted €500m of fixed costs out of the core business over the last 18months, meaning as international boarders reopen the company will return to pre-Covid profitability at revenues significantly below 2019 levels. The catalysts we are looking for include improving international travel, contract wins, and deployment of €2bn excess cash on its balance sheet.

Lastly, Intuit (+7.9%) once again has surprised the market and announced a new acquisition set to extend its leadership position in small-to-medium enterprise productivity software. The company started with accounting software that removes the need for small businesses to hire accountants. Then it bolted on Credit Karma that enables the company to offer credit evaluation scores for key customers and suppliers. And now, the $14bn acquisition of Mailchimp accelerates the company’s ability to achieve its goal of becoming an AI-driven expert platform. We see this as an excellent acquisition that gives the company key tools to enable small businesses to get, engage, and retain customers to grow and run their businesses.

Positive contributors included:

HDFC Bank (+14.2), Brookfield Reinsurance (+13.9%), Zurich Insurance (9.8%) Alphabet (+8.5%) and Intuit (+7.9%).

Negative contributors included:

Alibaba (-11.6%), Ping An (-10.5%), LVMH (-6.5%), Visa (-6.0%) and Amadeus (-5.8%).

Discrete years' performance (%), to previous quarter-end:







Liontrust Global Dividend






MSCI World






IA Global Equity Income












Source: FE Analytics as at 30.06.21, C Accumulation share class performance. Quartile performance rankings as 30.06.21, generated on 07.07.21.

Understand common financial words and terms See our glossary
Key Risks 
Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested. The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.
Investment in funds managed by the Global Equity (GE) team may involve investment in smaller companies - these stocks may be less liquid and the price swings greater than those in, for example, larger companies. Investment in funds managed by the GE team may involve foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The team may invest in emerging markets/soft currencies or in financial derivative instruments, both of which may have the effect of increasing volatility. Some of the funds managed by the GE team hold a concentrated portfolio of stocks, meaning that if the price of one of these stocks should move significantly, this may have a notable effect on the value of that portfolio.  


This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. 
This should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust. Always research your own investments and if you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. 
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