Global Opportunities Fund

A Better Way to Access Emerging Markets

Fund overview

Thornbridge Global Opportunities Fund is a thematic fund with reduced stock specific risk. The managers believe the agent of change in the global economy is the 6bn population living outside the west and they seek businesses that engage with it, wherever they are. They believe this is a better way to access developing markets.

The investment approach is simple, transparent and unconstrained. The fund has a proven long term track record with 10.76% compound annualised growth since 2004.

The investment objective is to seek capital & income growth from investments identified across global equity and/or bond markets. The managers may also choose to hold government securities, collective investment schemes and cash & money market instruments as appropriate in achieving the overall objective of the fund. Please note that the themes currently being pursued by the managers lead it to invest in a number of higher risk emerging economies. The investment process is focussed on identifying the sectors that sit within chosen themes and constructing a diversified portfolio within those sectors.

ISIN Currency Price/NAV Change Price date
Acc GB00B5TP8W88 GBP 440.59 0.0150%   17 Jul 2018
Inc GB00B5SZCM77 GBP 383.63 0.0150%   17 Jul 2018

Fund manager comment - June

The fund did rise in value during June but by a notional amount. Investments listed in Western markets, and the US in particular, were good but emerging markets fell as money flooded out. That is a consequence not of poor economies ‘out East’ but of a fabulously strong US economy. The 313,000 jobs that the nation added in February are far more than needed to keep up with population growth and continue a strong trend this year. Bull markets don’t die of old age, as the pessimists claim. They die if underlying conditions are mishandled. There is no sign of that, in the US at least. The European one is not too shabby either with nominal wages finally rising – up 2% over the past year to March 2018. Both a strong dollar and weak dumped emerging market currencies add to an attractive brew that should stimulate export flows from East to West. The bulk of exports flow in that direction anyway which is why in our view, the high tariff nations are likely to sue for peace with the Trump administration so that everyone can get back to business. In 2017 the US imported goods from China worth $505.5bn. Trade the other way amounted to $130bn. Guess who is going to blink. Even if they don’t the consequences of higher tariffs are not obvious. So far they are being applied to fairly low value parts of the economic value food chain and even for China the relevance of exported goods to the economy has fallen as it has become more sophisticated. Its current account surplus, which measures trade in goods and services, amounted to 1.3% of GDP last year. Internal consumer spending is where the margin is for China Inc and accounts for nearly 80% of GDP. Consumer loan growth is likely to moderate as the Government seeks to encourage de-leveraging. Indeed it has already. Consumer loan growth in May stood at around 22% year on year compared to 30% a year earlier. Still pretty fabulous.

Read more...

We are not resisting prevailing trends and overall allocation to US and European markets has risen at the expense of Asian ones. However we do expect this to be transitory. We have noticed a sharp recovery across the board in recurring demand consumer brand companies and we have bought more of those over the month to provide balance against very strong tech investments.

The Global Opportunities Fund represents a stake in the consequences of rising incomes outside G7. The managers believe the investment universe has for some years been split into two economies - 'The Supplied' consisting of 1bn western consumers and 'The Suppliers' consisting of 6bn worker exporters. Against this backdrop investors have allocated assets by geography. We now live in a single global market place of 7bn consumers requiring assets to be allocated to those companies catering to the collective needs and wants within it.

The managers believe that markets are broadly efficient and asset allocation therefore delivers greater reward than individual stock selection. The Investment process is focussed on identifying sectors that sit within chosen themes by using screens for market signals and sector patterns.

Conventional bottom up research is then applied to the resulting shortlists with the managers looking for companies exhibiting the highest quality earnings, dividends, margins and sales CAGRs within the group. They favour businesses that enjoy ‘little and often’ recurring demand, are established with strong market positions and can demonstrate a degree of pricing power or economic moat.

The managers believe in the concept of compounding - adding to winners and reducing losers. In this way success is reinforced and destruction minimalized. Those stocks that don’t grow, go.

Inception
January 2004, run by Thornbridge IM from August 2015
Assets*
£69.6 M
Investment Objective
Capital Growth
Investment Policy
Unconstrained theme based fund with emerging market emphasis
Type
OEIC, UCITS long only fund, daily dealing, single share price
Illustrative Benchmark
MSCI World TR GBP
Sector
IA Global
Ongoing Charges
1.05%
Number of Holdings*
228
Dividend Yield*
1.60%
Sedol Number
Acc: B5TP8W8
ISIN
Acc: GB00B5TP8W88
Bloomberg Code
JMFPOLA
Authorised Corporate Director
Maitland Institutional Services Ltd – Dealing Line: 0345 305 4216
Contact Details
James Bedford, Thornbridge Investment Management
Direct: 020 8004 3275, Mobile: 07775 817 127
james.bedford@thornbridge.com
Inception
January 2004, run by Thornbridge IM from August 2015
Assets*
£69.6 M
Investment Objective
Capital Growth
Investment Policy
Unconstrained theme based fund with emerging market emphasis
Type
OEIC, UCITS long only fund, daily dealing, single share price
Illustrative Benchmark
MSCI World TR GBP
Sector
IA Global
Ongoing Charges
1.05%
Number of Holdings*
228
Dividend Yield*
1.60%
Sedol Number
Inc: B5SZCM7
ISIN
Inc: GB00B5SZCM77
Bloomberg Code
JMFPOLA
Authorised Corporate Director
Maitland Institutional Services Ltd – Dealing Line: 0345 305 4216
Contact Details
James Bedford, Thornbridge Investment Management
Direct: 020 8004 3275, Mobile: 07775 817 127
james.bedford@thornbridge.com

* As at 29 Jun 2018

Top 10 Holdings

Partners Group Holdings1.25%
Visa Inc1.24%
Croda International Plc1.10%
Align Technology1.09%
Keywords Studios1.07%
Estee Lauder1.06%
Shiseido1.05%
Segro1.02%
Intuitive Surgical Inc0.99%
Cintas0.97%

Sector breakdown

Consumer Facing22.41%
Strategic Assets18.46%
Capital Equipment15.61%
Healthcare13.66%
Tech13.58%
Hard & Soft Commodities12.11%
Financial4.17%

Performance over past 10 years

Cumulative performance to June 2018

3 Mnth 6 Mnth YTD 1 Year 3 Year 5 Year 10 Year
Global Opportunities Fund 7.95% 2.27% 2.27% 10.58% 54.95% 61.79% 85.18%
MSCI AC World TR GBP 7.02% 2.33% 2.33% 9.50% 53.30% 84.94% 179.52%
MSCI EM TR GBP -2.08% -4.00% -4.00% 7.05% 42.08% 49.63% 95.31%

Discrete performance to the last quarter end

Fund manager

Anthony Eaton

Anthony Eaton Anthony has been lead manager on the Global Opportunities Fund since 2005. As well as running the fund, Anthony continues to be a senior investment manager at JM Finn. Anthony graduated from Bangor University with a BA in Economics and is a member of the CISI (Chartered Institute for Securities & Investment). Prior to joining JM Finn in 2001, Anthony was with Greig Middleton which he joined in 1990.

How to invest and further information

To deal in the units of Thornbridge Global Opportunities Fund please call Maitland Institutional Services Ltd on +44 (0)345 305 4216.

Further information and forms are available from Maitland Institutional Services Ltd at www.maitlandgroup.com/fund-info/mi-thornbridge-global-opportunities-fund/ or call +44 (0)345 305 4216.

For further enquiries on the Thornbridge Global Opportunities Fund please contact James Bedford at Thornbridge Investment Management on +44 (0)20 8004 3275 / james.bedford@thornbridge.com