Liontrust Global Dividend Fund

Q3 2019 review

The Liontrust Global Dividend Fund returned 4.8% in the third quarter of 2019, versus the IA Global Equity Income sector average and the MSCI All-Country World Index’s returns of 2.7% and 3.4% respectively. This performance places the Fund in the top quartile of the peer group over the period.

Market overview


As we enter a period of slowing global growth and elevated valuations, idiosyncratic risk becomes heightened so we have reduced our concentration risk to a maximum holding of 3.5% in the near-term to help reduce the effect of known unknowns on the overall portfolio. A key feature of current global markets is crowding in “high quality” stocks so valuation discipline is crucial to protecting downside price risk.

Portfolio attribution


Over the quarter, we made a few portfolio changes for stock specific reasons. For instance, we exited our position in AO Smith after General Electric announced it was entering the US water heater market in 2020 – the profitability of US water heater market is vital to AO Smith’s business model so with increased competitive pressures in its key market the outlook for AO Smith deteriorates. We also exited our position in Spark NZ because of two reasons: firstly, we met with new management who indicated a change in strategy towards a more unsustainable growth strategy, and, secondly, the significant price divergent from what we assess as our estimate of intrinsic value of the business. 

We built new positions in industry leaders well positioned to execute growth strategies with excellent digital capabilities. Boeing is one company undergoing significant change as it starts to emerge from legacy 737 Max issues. We expect this to take time as the company reverses some of its move to out-source a significant proportion of its manufacturing and design functions and brings critical functions back into the company. Longer term, we see a long runway for the company to compete and win in both the air transport and defence industries.

Another purchase was Infratil, an infrastructure investment company based in New Zealand, who have an excellent track record of purchasing underperforming assets and improving asset efficiency thus creating significant value for shareholders. The company recently announced a purchase of a major New Zealand communications asset from a distressed seller (Vodafone) at an attractive price. This underperforming asset has significant latency that we expect the Infratil team to execute on so see plenty of upside from purchase price. 



As we enter Q4, we remain focused on growing the income pay-outs for our unit holders while seeking to grow capital. We recognise valuations are stretched in certain areas of the market but we are still finding opportunities to invest with a reasonable margin of safety. Going forward we see some exciting opportunities with companies who are starting to execute against digital platform strategies announced years ago and offer some compelling investment opportunities.

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








Liontrust Global Dividend C Acc






MSCI AC World Index






IA Global Equity Income













*Source: Morningstar as at 30.09.2019, on 17.10.2019.

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.




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.

Tuesday, October 22, 2019, 3:09 PM