Fund Research

Martin Currie Global Portfolio Trust

20 April 2018 View latest version

Martin Currie Global Portfolio (MNP) aims to achieve long-term capital growth, in excess of the FTSE World index, while offering a solid yield relative to the sector.

Taking over the trust in 2000, one year after inception, Tom Walker looks for companies that are undervalued because of earnings, asset or valuation anomalies. In recent times, Tom has been encouraged to pursue a higher-conviction portfolio, reducing the number of holdings to 47. This change has been reflected in the trust’s active share of 89.7% (versus the FTSE World Index), which has increased by close to 5% over the past three years.

MNP is comprised of predominantly large cap equities (over 90% of the portfolio), which the team consider ‘the world’s leading companies’. Exposure is broadly diversified in geographical terms, although there is a significant weighting to the US – where over half the portfolio is invested. The trust’s top ten holdings make up over a third of the portfolio and the largest sector weightings include financials, technology and industrials.

Although the trust continues to struggle to outperform the index, in absolute terms the NAV total return has been 28.7% and 11.2% during 2016 and 2017 respectively. The recent changes to the portfolio (including becoming more concentrated) have been implemented as an attempt to improve performance.

Since the launch eighteen years ago, MNP has an unbroken record of maintaining or increasing the dividend year-on-year, and this combined with the trust’s yield (1.83%) relative to the rest of the sector, is a significant part of the trust’s appeal to investors. Additionally, the introduction of a zero-discount policy in 2013, has meant the trust has traded very close to NAV.

The start of 2018 also brought a reduction in the management fee (with effect from 1 February 2018) from 0.5% to 0.4% of ex-income net assets. Accompanying this, the board have amended the performance fee, which will now be 12.5% of the cumulative outperformance, relative to the benchmark. Moreover, the company’s ongoing charges have also been reduced, now equating to 0.69%, compared to its previous figure of 0.74%. This change has led to MNP being one of the three lowest charging trusts in the global equity sector.

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Fund History: Martin Currie Global Portfolio Trust

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