Liontrust Global Dividend Fund

November 2020 review

The Liontrust Global Dividend Fund returned 12.1% in November compared with 9.2% from the MSCI World Index and 10.7% from the IA Global Equity Income sector*.

The Liontrust Global Dividend Fund performed strongly in November as stocks in beaten-down sectors have contributed to the portfolio’s performance. The positive vaccine developments combined with the reduced US election uncertainty have provided a positive backdrop to equity prices leading to a broad rally across global equities.

After almost six months of narrow leadership with a small cohort of stocks driving equity markets, the broad rally is a welcome respite and highlights an improvement in the overall economic outlook. Driving the performance Amadeus, Safran, Compass Group and Brookfield Asset Management were up on average 30% for the month, which helped offset those stocks that underperformed the broader market.

Apart from Brookfield Asset Management, the aforementioned are new positions this year for the Fund as we took advantage of overreactions during periods of market volatility earlier this year to build new positions in best-in-class companies at attractive prices.

However, some of the long-term winners within the portfolio lagged the broader market this month – with American Tower and Microsoft slightly down as investors trimmed positions in strong performers year to date and allocated capital to more cyclical sectors. During the month we made two new changes to the portfolio: firstly, we sold Diageo, which has performed strongly since we brought it in the depths of the selloff in March as it approached our price target.

With the capital we built a new position in Costco – the lowest price grocer with an enviable market position and strong growth prospects. With the rotation, some of the more defensive stocks within our watchlist are starting to become attractive for the first time this year. Secondly, we built a new position in Becton Dickinson, a large US healthcare supplier of medical devices and healthcare consumables – the company provides a large and growing share of medical supplies to healthcare facilities all over the world where quality is more important than price.

The shares of this exceptional company have significantly underperformed this year, and after recent stock price weakness this month offers an attractive opportunity to investment in a company set to grow its dividend in the double digits over the next five years as it becomes a bigger share of hospital spend.

The approval of the Pfizer vaccine for use in the UK is an important first step in returning to past levels of economic activity. However, this is only the first step and we will no doubt have some wobbles along the way.

Levels of debt in some areas of the economy and competitive rivalry in others will be important to keep a close eye on as we reopen, but overall, the recent developments provide a positive backdrop for equity prices as we close out a difficult year. 

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

 

Sep-20

Sep-19

Sep-18

Sep-17

Sep-16

Liontrust Global Dividend C Acc GBP

8.1

15.7

12.4

9.4

11.0

MSCI World

5.2

7.8

14.4

14.4

29.9

IA Global Equity Income

-3.9

7.0

7.0

12.3

24.7

Quartile

1

1

1

3

4

 

*Source: Financial Express, as at 30.11.20

 

**Source: Financial Express, as at 30.09.20

 

For a comprehensive list of common financial words and terms, see our glossary here.

  

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 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.

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.

Thursday, December 10, 2020, 5:25 PM