Assets under management (AUM) for the Stonehage Fleming Global Best Ideas Equity Fund have passed the USD2 billion mark.
Since launching in August 2013, the fund has attracted assets from private, professional and institutional investors. It has returned 118.8 per cent (17.0 per cent pa) over the last five years, compared to the MSCI World’s 97.8 per cent (14.6 per cent pa) (USD terms).
Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 28 businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value. The portfolio has very low turnover: over the past 12 months Gerrit has only sold two positions, with the fund turnover well below 10 per cent. Current investments include some of the world’s best known companies such as Amazon, PayPal, Microsoft, Nike, Adobe and Estée Lauder.
Commenting on the current market environment, Smit says: “The global fundamental economic recovery for 2021 is well underway, coming off the low base of 2020. We believe we are now into a new positive global economic cycle, well supported by the successful vaccine roll out programmes.
“Some investors are challenged with perceptions of high valuations. They often underestimate the value of sustainable growth and get overwhelmed by current valuation multiples. The best opportunities lie in strategic investing with an eye on the horizon for long-term compounded growth, combined with an improving short-term outlook.”
Andrew Clarke, Group Head of Business Development, says: “In under two years, our Global Best Ideas Equity Fund has doubled in size to exceed USD2 billion. The investment philosophy that underpins the Fund’s strategy, (ie that a good business remains a good business irrespective of short-term share price volatility), clearly resonates with investors.
“We are excited by the Fund’s growth potential and look forward to raise the Fund’s profile further amongst wholesale investors this year.”
On the continuing impact of Covid-19, Smit adds: “PayPal and Amazon (and many others’) futures are in the process of arriving two or more years early, without all the usual necessary investment required to attract all those new clients. Their future profitability therefore also arrives earlier, and their share prices have to reflect that. We believe their future growth trajectory has been enhanced by Covid-19.”
“Whilst the high street is structurally damaged, those businesses that have developed their online capabilities well are in the process of taking permanent market share. They should also enjoy better margins, with direct sales replacing those through wholesalers and retailers.”