Liontrust GF Asia Income Fund

May 2018 portfolio changes

  • Bought – Indo Tambangraya Megah Tbk (ITMG). ITMG is an Indonesian coal mining company with concessions in Kalimantan.  It exports close to 90% of its production and is a beneficiary of the recovery in coal prices, which look set to stay elevated. ITMG has higher than normal spot price exposure with only 30% of sales under fixed contract prices compared to an average of more than 50% in the past three years. The Northern Hemisphere summer, which leads to increased air conditioning, could act as a shorter term catalyst. The supply outlook remains favourable as coal mining investment in China has declined by approximately 70% due to tighter regulations regarding environmental protection and safety policies. ITMG’s valuation looks attractive at a 2018 price/earnings ratio of 8.3x, below its long-term average, with a robust 11% dividend yield.  Its balance sheet is strong and in a net cash position while a 29% return on equity is the highest in the region save for Semirara Mining in the Philippines. 

 

Key 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. 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 the Fund involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Fund’s expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation. 

Disclaimer

This content 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.  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, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

Monday, June 11, 2018, 11:42 AM