Global equity fund focused on finding high quality cash compounders that can produce attractive capital returns for investors. Strong bias towards market leading companies with a large element of recurring revenues, and strong competitive positions. These businesses tend to be asset-light and able to generate growing free cashflows, that can be reinvested to help compound returns for shareholders in the long-term. The managers actively manage valuation risk by always looking for the best combination of quality, long-term growth and value at any given time.
"The Evenlode Global Equity Fund is a portfolio of highly cash-generative companies, that can compound their cash-flows consistently over time – producing attractive returns for investors."
Chris ElliottPortfolio Manager
Aims to deliver capital growth from a portfolio of global equities
Focus on companies with high returns on capital, a strong economic moat and pricing power
Disciplined long-term approach, supported by a collaborative investment team shared across all the Evenlode strategies
Chris joined Evenlode in 2015 as an Investment Analyst. In 2017 he became the co-manager on Evenlode's Global Equity Income strategy and in 2020 fund manager on the Global Equity Growth strategy. Previously he worked at the Oxford University Press as a software engineer and completed all his CFA exams whilst working there.
CFA
9 years
9 years
James joined Evenlode in April 2020 as an Investment Analyst and Fund Manager, having previously worked as an equities analyst at Independent Franchise Partners (IFP) from 2015 to 2020. Prior to IFP, he worked as an investment analyst at Arisaig Partners and Newlands Investment Management.
MiF, London Business School
4 years
18 years
Evenlode Global Equity rose modestly in the month of March, lagging its comparator benchmark index, the MSCI World Index, by a reasonable margin. This takes its first quarter performance to approximately 470bps (4.7%) behind the benchmark, even after outperforming in January. There is no sugar-coating that this has been a disappointing two months for relative performance.
While there have been idiosyncratic company-level issues, these should be put in context – in any given two-month period since we launched, at least one or two of our companies have been temporarily out of favour with the market. Historically, these have been overwhelmed by the portfolio’s superior fundamentals against the broader market, but this has not been the case so far in 2024. As a simple diagnostic of changes in fundamental expectations, we looked at consensus GAAP EPS (earnings per share) revisions year to date for the portfolio vs. the MSCI World – while we do not value our companies on EPS, it is a relevant and widely available barometer. Unexpectedly and probably as a result of USD strength, estimates for calendar years 2024-2026 for both the index and the portfolio have declined YTD, but somewhat less for the portfolio, ruling this out to our minds as a reason for relative weakness [sources: Factset and Visible Alpha]. The starting multiple for the portfolio against the index on Jan 1 was in line with its long-term post-launch average, so we don’t think that is a likely culprit either.
The closest parallel in the portfolio’s lifetime is the second half of 2020, when we also meaningfully underperformed. After the initial dash to defensive quality in the pandemic’s onset, the market bounced on vaccine news and improving financial conditions, i.e. lower rates and tightening credit spreads. Lower rate expectations kicked off the current rally at the end of October 2023; while they have moderated in 2024 YTD, this has been on positive economic data surprises, particularly out of the US, which together with high expectations of earnings growth from AI innovation has kept the market moving. As with the late 2020 rally, this has disproportionately benefited companies more sensitive to improved economic conditions and lower rates and credit spreads. It is hard to explain why explicit EPS forecasts don’t yet reflect this, but it’s reasonable to assume the sellside is lagging the buyside here; and also, perhaps the market is overly optimistic on at least some fronts, as it has already proven to be on rate cuts. Given Evenlode’s exclusive focus on high cashflow generation, low cyclicality, and low leverage, our portfolios tend to lag in these environments. While it is never pleasant to be behind, we are aware of why this is the case and how it fits into the broader plan for our portfolios. Critically, our companies retain their powerful competitive advantages. We expect them to outperform the broader market in capturing the benefits of innovation and financial conditions improving, whereas the average company tends to see these tailwinds competed away.
1Mastercard | 6.9 |
2Alphabet | 5.6 |
3RELX | 5.0 |
4Microsoft | 5.0 |
5Wolters Kluwer | 4.7 |
6Experian | 4.2 |
7Medtronic | 4.2 |
8Nestlé | 4.0 |
9Diageo | 3.9 |
10Accenture | 3.6 |
11Heineken | 3.5 |
12Amadeus | 3.2 |
13Verisk Analytics | 3.2 |
14Johnson & Johnson | 3.0 |
15Intercontinental Exchange | 3.0 |
16Broadridge Financial | 2.9 |
17Amazon | 2.9 |
18L’Oréal | 2.7 |
19Beiersdorf | 2.7 |
20London Stock Exchange Group | 2.7 |
Industrials | 23.4 | |
Financials | 22.5 | |
Consumer Staples | 18.7 | |
Consumer Discretionary | 10.0 | |
Communication Services | 8.9 | |
Information Technology | 8.6 | |
Health Care | 7.2 | |
Cash | 0.8 |
North America | 51.8 | |
Europe | 27.3 | |
United Kingdom | 18.6 | |
Asia-Pacific | 1.6 | |
Cash | 0.8 |
Comparator Benchmark | MSCI World |
IA Sector | IA Global |
Morningstar category | Global Large-Cap Growth Equity |
Launch date | 15 July 2020 |
Fund type | UK Domiciled OEIC |
Base currency | GBP |
Dividend frequency | Annual |
Active share | 86.2% |
Country of registration | UK |
The investment objective of IFSL Evenlode Global Equity is to provide capital growth over Rolling Periods of 5 years.
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