Liontrust GF Asia Income Fund

November 2019 portfolio changes

  • Bought – Pacific Textiles. A provider of dyeing, knitting, printing and finishing services, Pacific Textiles sits in the midstream of the textiles supply chain. Already high at c.18%, we expect gross margins to improve further as product mix shifts from cotton to synthetics and advanced technology fabrics (such as Heattech and Airism for Uniqlo). Pacific Textiles recently added China’s Anta Sports as a key customer, becoming its third largest, and it expects to grow sportswear revenues from 12% to 20% over the next three years.
  • Sold – G8 Education. Increased competition in the Australian childcare sector has limited G8’s ability to improve occupancy rates. Following the company’s second earnings downgrade in three months, we closed out the position in recognition of the increased risks to earnings delivery and dividend payments.
  • Sold – Silverlake. Earnings are now expected to decline this financial year as trade worries have led clients to be more cautious on fintech spending and after Silverlake’s blended tax rate rose due to loss of ‘pioneer’ status in Malaysia. With the shares trading on 17x this year’s forecast earnings, we believe more attractive investments can be identified.


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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. Investment in Funds managed by the Asia team 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

The information and opinions provided 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. 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, December 9, 2019, 1:58 PM