Global Equity Income fund focused on finding asset-light companies with cash generative economics and long-term growth potential, that also offer an attractive initial yield and a growing dividend stream. These types of companies tend to be better insulated during the market downturns. It invests in developed market listed companies, but with revenues generated from a well-diversified range of geographies, including emerging markets. The managers actively manage risk including valuation, by always targeting the best combination of quality and value at any given time.
“The Evenlode Global Income Fund is a portfolio of highly cash-generative companies from around the world, designed to provide an attractive yield today and prospects for higher than average, inflation-beating dividend growth."
Ben PetersPortfolio Manager
Aims to deliver capital growth and a growing income stream from a portfolio of global equities
Focus on quality companies with high returns on capital, a strong economic moat and pricing power
Disciplined long-term investment approach, supported by a single investment team shared across all Evenlode strategies
Ben has been a manager of Evenlode Global Income since launch in November 2017, and has worked on Evenlode Income since launch in 2009.
CFA (Level 1), IMC
15 years
16 years
Chris has been a manager of Evenlode Global Income since launch in November 2017 and Evenlode Global Equity, which launched in July 2020.
CFA
9 years
9 years
March saw the positive run for global equities continue, with the fund up by +1.1% and the comparator benchmark MSCI World index up by +3.4% in sterling. The fund is sitting at all -time high levels, backed by solid cash flow and dividend growth from the portfolio as we noted last month. However, recent performance against the market and the sector of global income strategies has been relatively muted. The Evenlode investment process looks for high quality businesses that can steadily grow cash flows to drive returns to shareholders through time, and that are relatively insulated from the economic cycle. While this strategy of selecting resilient companies has demonstrated relative downside protection in market downturns compared to the index, we acknowledge that the strategy is likely to lag in stronger markets and indeed this is what we have seen in recent times.
Comparing to the benchmark MSCI World index much of the recent relative underperformance has come from Information Technology firms, which have been positive contributors for the portfolio year to date - but even more positive for the market with a notable boom in the semiconductor industry. A comparison to the MSCI World High Dividend Yield index over the last three years allows us to draw comparisons across sectors that are more typically found in yield-seeking portfolios. The strong showing for the Financials and Energy sectors in the MSCI index more than accounts the performance lag against peers as these sectors feature companies that do not generally meet our investment criteria and are generally not held in the portfolio. For sectors that are found in the fund, positive relative performance has come from the Communications Services, Industrials and Information Technology sectors, but Consumer and Health Care companies have detracted.
The overall valuation environment remains attractive and the recent weakness in our preferred sectors provides opportunities for investment. Last month we added a small position to the portfolio in French spirits maker Pernod Ricard following share price declines. This used proceeds from some other consumer names including rival Diageo, which has also fallen, but by less.
1Unilever | 4.6 |
2Microsoft | 4.3 |
3Accenture | 3.9 |
4Wolters Kluwer | 3.9 |
5RELX | 3.8 |
6Medtronic | 3.7 |
7Nestlé | 3.6 |
8Procter & Gamble | 3.3 |
9Reckitt | 3.3 |
10Experian | 3.2 |
11LVMH | 3.2 |
12Cisco Systems | 3.2 |
13Paychex | 3.1 |
14Quest Diagnostics | 3.1 |
15Diageo | 3.0 |
16L’Oréal | 3.0 |
17Jack Henry & Associates | 2.8 |
18Roche | 2.8 |
19GSK | 2.6 |
20Intertek Group | 2.4 |
Industrials | 25.4 | |
Consumer Staples | 21.6 | |
Health Care | 20.3 | |
Information Technology | 15.1 | |
Communication Services | 6.3 | |
Consumer Discretionary | 5.4 | |
Financials | 2.8 | |
Materials | 2.1 | |
Cash | 0.9 |
Europe | 38.6 | |
North America | 33.0 | |
United Kingdom | 22.9 | |
Asia-Pacific | 4.6 | |
Cash | 0.9 |
Comparator Benchmark | MSCI World |
IA Sector | IA Global Equity Income |
Morningstar category | EAA Fund Global Equity Income |
Launch date | 20 November 2017 |
Fund type | UK Domiciled OEIC |
Base currency | GBP |
Dividend frequency | Quarterly |
Active share | 90.8% |
Country of registration | UK |
The investment objective of IFSL Evenlode Global Income is to provide income and capital growth over Rolling Periods of 5 years, with an emphasis on income.
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