Liontrust Global Dividend Fund

September 2020 review

The Liontrust Global Dividend Fund returned 0.5% in September compared with 0.0% from both the MSCI World Index and IA Global Equity Income sector.

Market returns continue to reflect an uncertain outlook over the speed of reopening and result of the upcoming US Presidential election. As we enter flu season, the spike in COVID infection rates, even though expected, is a negative development as many economies enter a difficult period. In periods of market volatility, we seek to build new positions in best-in-class companies at attractive prices. In September we built two new positions – Automatic Data Processing (ADP) and Tradeweb.

ADP is one of the largest payroll and tax processors in the world, serving over 860,000 clients. The company’s services include a wide range of human resource, payroll, tax, and benefit administration solutions. Importantly, once a customer installs ADP’s HCM software system they are unlikely to switch to a rival provider. Importantly, the cost to the customer is small but system training and customisation provide high switching costs driving low-90’s retention ratio.

As the company transitions its customer base to the cloud, we expect the company to benefit from lower marginal cost of distribution, driving operational leverage and earnings growth. The company currently trading on a dividend yield of 3%, and with the company growing its dividend over 10% a year, is well positioned to increase its payout to shareholders over the next five years.

On the other hand, Tradeweb is a leading financial exchange that is disrupting the fixed income market. The company provides a platform where clients can transact orders electronically, instead of voice-driven execution, that drives down costs for clients and increases price transparency for clients in a stricter regulatory environment.

The company went public in 2019 and initiated a dividend in its first year of trading, and with the large opportunity ahead of the company to take market share from Bloomberg and other competitors across corporate bonds and sovereign debt instruments. Importantly, the cost of the company’s execution platform is relatively fixed so as the company takes share revenue will drop to the bottom line and result in strong dividend growth.

As we enter the fourth quarter, we expect continual volatility in financial markets and uncertainty will remain elevated until the healthcare industry develops an effective vaccine and in the meantime – we will continue to take profit from those stocks that get expensive as market overexuberance takes over in certain areas of the market and redeploy into overlooked best-in-class companies.

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







Liontrust Global Dividend C Acc GBP






MSCI World






IA Global Equity Income













*Source: Financial Express, as at 30.09.20


**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.


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 20, 2020, 11:14 AM