Liontrust Global Dividend Fund

October 2020 review

The Liontrust Global Dividend Fund returned -2.6% in September compared with -3.1% from the MSCI World Index and -3.3% from the IA Global Equity Income sector.

Finally, a large group of companies in the portfolio have provided updates on their operations for Q3. Whilst normally these results enable us to incrementally update our views on a business and provide an opportunity to evaluate if a company is on track to achieve its strategic objectives; this month we got an important insight into how the companies are able to not only flex their cost base but also evaluate their ability to shift to a digital economy.

Even though the Fund is down for the month, the results from the companies in the portfolio were pleasing. Only a couple of companies produced unsatisfactory results – one was Unilever who has focused investor attention on its digital transformation progress, but the results highlight on 8% of total sales is through its e-commerce channel. So, this company is now under review to determine if there are better opportunities elsewhere in the watchlist.

As I write this update, the US election is in its final stages and it seems a Biden win is now the base case with references to the 2000 race misinformed due to the race actually being close in Florida. This time, all everyone wants is for all the votes to be counted so I’m sure they will. While we wait for the official result, we may get some examples of voter fraud and some volatility in the market until Trump concedes, but we can now start looking to a slightly different future under a new governing body.

But without a blue Senate (set to be determined in January by a runoff in Georgia) Biden has his hands tied, particularly when it comes to reversing the tax cuts. However, one of the first acts of a Biden government is expected to be the US re-joining the Paris climate agreement. This would clearly be a positive for climate change advocates and we have a number of companies in the portfolio that will benefit from an increased focused on reduced carbon intensity, particularly, in the automotive sector – something I will touch on in further updates after inauguration ceremony for the next US President.

As we enter November, we continue to expect markets to remain volatile until we find a viable vaccine and have a solution to the healthcare crisis, but in the meantime, we will continue to seek out investment opportunities provided by market volatility in best-in-class companies. 

 

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 30.09.20

 

**Source: Financial Express, as at 30.09.20

 

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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 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.

 

Friday, November 13, 2020, 11:14 AM