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VOL 23 / ISSUE 15 / 22 APRIL 2021 / £4.49
BIN THE
TAXMAN:
Stocks that could help
you avoid inheritance tax
BIDEN
REGULATION AND
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COULD DERAIL
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INVESTMENTS
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COINBASE IS AN
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‘PLODDERS’
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We strive to
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authorised and regulated in the UK by the Financial Conduct Authority. Please quote 2587.
STA0421359244-001_2587_ASI_IT_AD_2021_ASIAN_A4_Shares.indd 1 09/04/2021 10:32
EDITOR’S VIEW
The value rally is being
powered by ratings
change not earnings
We’ve reached the point where the rising tide may no longer lift all boats
A
nother week, another push forward for
the UK stock market. We’ve waited for a
long time for this to happen and it’s very
satisfying to see the FTSE 100 and FTSE 250 finally
get some winds in their sails.
The key question is whether the rally has legs. rating, whereas previously it was on a depressed
Some companies look like they’ve already priced in rating? Or is that rating too high for this type of low
a significant amount of potential future growth so margin business?
that they a) no longer look good value and b) stand Wagamama owner Restaurant Group (RTN)
to experience a big share price correction if the has risen by 204% since 1 November yet its 2022
earnings growth doesn’t materialise. earnings per share forecasts have fallen by 28% over
There are stocks still priced attractively versus that period, putting it on a price to earnings ratio of
their prospects, four of which we featured in this 24.9 – not the sort of rating you’d associate with a
recent article. However, it does feel as if we are leisure company.
approaching the stage where parts of the market Since 1 November, 315 stocks from the FTSE 350
may find it harder to keep rising without stronger – which combines both the FTSE 100 and FTSE 250
earnings upgrades. indices – have increased in price, 16 of which by
Shares has looked at the performance data since more than 100% and 97 delivering more than 50%
1 November 2020 which is roughly when the market return, according to SharePad. The ones delivering
rotated towards value-style shares. In theory, the negative returns have seen an average share price
vaccine rollout has improved value stocks’ chance of decline of 4.2% over that period.
growing earnings and investors suddenly found they Shares is certainly not calling the top of the value
no longer needed to pay top price to access growth. rally, merely highlighting the need to be more
For the past five months, these value stocks selective with stock picking at this stage.
have principally risen because investors have been It’s also worth looking at the ones that haven’t
prepared to pay a higher rating for them. For rallied as there could be some decent companies
example, if a company was trading on 10 times trading on lower ratings than their historical average.
forecast earnings for 2021 and enjoyed a 50% rise This group is likely to include some quality names
in its share price, it would be trading on 15 times – with a long track record of delivering good returns,
assuming no change to earnings estimates. but which are temporarily out of favour because
Cleaning provider Mitie (MTO) has seen its 2022 investors can find potential growth stories on a
earnings per share forecast increase by 5% since the cheaper rating. As we explain in this article, now
start of November 2020, according to Stockopedia could be a good time to load up on quality names.
data. Its share price has risen by 129% over that
period, meaning the gains are almost entirely down
to the rating change. By Daniel Coatsworth Editor
Mitie now trades on 13.1 times 2022’s expected
earnings. Investors need to ask – is that now a fair
22 April 2021 | SHARES | 3
Contents CFA UK
Publication of
the Year
CFA UK
Journalism
Awards 2019
News
Provider
of the Year
(Highly Commended)
CFA UK
Journalism
Awards 2020
EDITOR’S
03 VIEW The value rally is being powered by ratings change not earnings
London-listed banks should report strong first quarter but challenges remain /
Biden regulation and tax changes could derail certain investments / Pressure builds
06 NEWS on GlaxoSmithKline as activist enters the fray / Get the inside track on new float
MusicMagpie
GREAT New: It’s a great time to feast on McDonald’s shares / Virgin Wines’ shares are
1 1 IDEAS cheap for an online retailer and it is profitable
Updates: Elementis / DiscoverIE / Tracsis / Touchstone Exploration / Treatt
22 FUNDS Evenlode to rival Fundsmith with new global growth fund
25 FEATURE $63 billion Coinbase is an easy way to play bitcoin
27 FEATURE Bin the taxman: Stocks that could help you avoid inheritance tax
INVESTMENT
34 TRUSTS Follow Nick Train and buy quality ‘plodders’ while they’re on sale
UNDER THE
37 BONNET Don’t miss PZ Cussons’ big turnaround effort as the shares are moving up
42 RUSS MOULD Where are we in the market cycle?
46 ETFS ETF demand to rise as funds added to popular comparison tool
49 ASK TOM Can you help with rules around crystallising a pension?
51 INDEX Shares, funds, ETFs and investment trusts in this issue
securities, derivatives or positions with spread betting organisations that they
DISCLAIMER have an interest in should first clear their writing with the editor. If the editor
agrees that the reporter can write about the interest, it should be disclosed to
readers at the end of the story. Holdings by third parties including families, trusts,
IMPORTANT self-select pension funds, self select ISAs and PEPs and nominee accounts are
included in such interests.
Shares publishes information and ideas which are of interest to investors. It
does not provide advice in relation to investments or any other financial matters. 2. Reporters will inform the editor on any occasion that they transact shares,
Comments published in Shares must not be relied upon by readers when they derivatives or spread betting positions. This will overcome situations when the
make their investment decisions. Investors who require advice should consult a interests they are considering might conflict with reports by other writers in the
properly qualified independent adviser. Shares, its staff and AJ Bell Media Limited magazine. This notification should be confirmed by e-mail.
do not, under any circumstances, accept liability for losses suffered by readers as
a result of their investment decisions. 3. Reporters are required to hold a full personal interest register. The whereabouts
of this register should be revealed to the editor.
Members of staff of Shares may hold shares in companies mentioned in the
magazine. This could create a conflict of interests. Where such a conflict exists it 4. A reporter should not have made a transaction of shares, derivatives or spread
will be disclosed. Shares adheres to a strict code of conduct for reporters, as betting positions for 30 days before the publication of an article that mentions
set out below. such interest. Reporters who have an interest in a company they have written
about should not transact the shares within 30 days after the on-sale date of the
1. In keeping with the existing practice, reporters who intend to write about any magazine.
4 | SHARES | 22 April 2021
Small &
Mid Cap
Inve s tment s
That
Have
Superior
O per ating
Number s
% Total Return
Fundsmith LLP (“Fundsmith”) is authorised and regulated by the Financial
12 months Since inception Conduct Authority and only acts for the funds to whom it provides regulated
2021 2020
ending March to 31.03.21 investment management and transaction arrangement services. Fundsmith does
not act for or advise potential investors in connection with acquiring shares in
Smithson Investment Smithson Investment Trust plc and will not be responsible to potential investors
+43.4 +0.8 +65.8
Trust Price for providing them with protections afforded to clients of Fundsmith. Prospective
investors are strongly advised to take their own legal, investment and tax advice
MSCI World from independent and suitably qualified advisers. The value of investments may
+55.1 -15.6 +33.4
SMID Cap Index (£ net) go up as well as down and be affected by changes in exchange rates. Past
performance is not a guide to future performance.
Source: Financial Express Analytics. Inception 19.10.18.
A Fundsmith fund Available through your stockbroker
Fundsmith LLP is a limited liability partnership registered in England and Wales with number OC354233. Its registered office address is 33 Cavendish Square, London, W1G 0PW.
www.smithson.co.uk
NEWS
London-listed banks should
report strong first quarter
but challenges remain
Key points to expect from Barclays, HSBC, Lloyds, NatWest and more
W
ith the major UK banks due to report
their first quarter results in the next
couple of weeks, we believe the
rally in the sector which began last autumn has
staying power based on valuation grounds.
However, this is only a sector to trade short-
term and we would be wary of brokers pushing an
overly bullish narrative.
WHAT TO EXPECT UK BANKS: DIVIDEND YIELDS
The reporting season starts with HSBC (HSBA)
on 27 April, followed by Lloyds (LLOY) and Metro FY21 Div FY22 Div
Bank (MTRO) on 28 April, NatWest Group (NWG) Yield Est Yield Est
on 29 April and Barclays (BARC) on 30 April. Barclays 3.0% 4.2%
Key numbers important to the market are net HSBC 3.7% 4.8%
interest income and the net interest margin. Lloyds 4.0% 5.6%
The first is the amount the banks are making on NatWest 5.0% 6.8%
money they have lent out minus the income paid Standard Chartered 2.6% 3.6%
on deposits. The second is the same thing but
Source: Shares, based on market prices 20 April
expressed in percentage points as a margin on
total loans and deposits. report bumper earnings from these divisions if the
Net interest income and margins have been US investment banks are any yardstick.
whittled away by low base rates over the last Of the two, Barclays is generally acknowledged
couple of years, so the banks have had to try to to have the better investment banking business
grow their loan books faster than their deposits. and has taken market share from its Wall Street
However, during the pandemic people and rivals in certain markets in recent quarters.
companies ended up borrowing less and saving HSBC and emerging markets rival Standard
more so there’s unlikely to be great news on Chartered (STAN), which reports on 29 April, are
that front. likely to have seen strong growth in the Asia Pacific
The news on bad loans should be better though. region, although both are likely to warn that year-
The banks have put aside billions of pounds for on-year growth will slow in 2021 as the region
expected credit losses which have so far failed to was the first to recover from the initial impact of
materialise, so the market is expecting them to Covid and performed well from the second quarter
announce – or at least hint at – special dividends onward.
and share buybacks later this year. Finally, with India struggling to control a new
wave of the virus, Standard Chartered in particular
INVESTMENT BANKS COME GOOD is likely to stay cautious on its full year guidance
For a change, the two firms with big investment and the message will be one of ‘controlling the
banking businesses – Barclays and HSBC – should controllable’, i.e. costs. [IC]
6 | SHARES | 22 April 2021
NEWS
Biden regulation and
tax changes could derail
certain investments
The new administration could make life harder for many companies
T
he latest signs that the Biden The key question is whether these changes are
administration is getting tough on being factored into analysts’ earnings estimates
corporate regulation and tax have put the and market valuations.
tobacco sector under pressure. The impact of Trump’s corporation tax cut in late
Shares in British American Tobacco (BATS) 2017 was significant, helping to drive big upgrades
and Imperial Brands (IMB) fell between 5% and to earnings forecasts and provided a significant
6% on 20 April, mirroring similar moves for their catalyst for the US stock market.
US-listed counterparts, on reports the Biden
team is considering plans to cap nicotine levels 3000
S&P 500 US MARKET INDEX
in cigarettes.
This could make tobacco companies’ core 2800
product less addictive and undermine sales. If 2
these reports are correct, it’s another reason why 2600
1
the new president is turning out to be less than
friendly to the business world, with tax increases
clearly on the table. 2400
2017 2018
There is talk of a global minimum tax rate,
agreed by the world’s biggest economies. Biden’s 1 2 Nov 2017
Trump tax cut introduced in the House of
administration might also force big companies to Representatives
pay taxes where their revenues are earned, not 2 22 Dec 2017
where the profits can be shifted to. Tax cut signed into law
Biden needs to pay for his stimulus and
infrastructure spending plans, and it looks like this This only came through once the Trump tax
will encompass a big hike in the US corporation cut had been introduced to Congress and signed
tax rate to 25% or even 28% from the current 21%. into law, suggesting it may take some time for the
Such a change would hit businesses like Google negative impact of Biden’s tax increases to feed
and Facebook which have their international through to markets.
headquarters in Dublin to take advantage of These new tax plans are still in their early stages
Ireland’s 12.5% rate. and may be diluted as the administration looks to
The Biden administration is looking at expanding get them approved by US lawmakers. However,
the ‘global intangible low-tax income’ tax which these issues are likely to garner increasing
was introduced under Donald Trump to make attention as we move through 2021.
it harder to shelter intangible profit – i.e. that Industries like healthcare and technology which
secured from intellectual property, copyrights and derive a significant chunk of their profit overseas
trademarks – overseas. and pay limited tax on this profit look most
There are also proposals to levy a 15% minimum vulnerable to any changes and this could reinforce
rate on book income to effectively ensure that all the current rotation out of these sectors and into
businesses pay something. value stocks. [TS]
22 April 2021 | SHARES | 7
NEWS
Pressure builds on
GlaxoSmithKline as
activist enters the fray
The arrival of Elliott Investment Management on the share register could
galvanise management
S
hares in GlaxoSmithKline (GSK) are on
an upward path after the Financial Times 200
GLAXOSMITHKLINE
reported that activist US investor Elliott 180 ASTRAZENECA
Investment Management had taken a ‘significant’
multi-billion-pound stake. 160
The $42 billion fund, known for active campaigns 140
at miner BHP (BHP) and Premier Inn owner
Whitbread (WTB), is expected to heap pressure on 120
Glaxo chief executive Emma Walmsley. 100
Although we don’t know the precise reasons
for Elliott’s actions, we can construct a possible 80
2018 2019 2020 2021
narrative. The shares have lagged the sector and
the company is in the middle of one of the biggest
transformations in its history which will see the One of Walmsley’s first actions in 2018 was the
consumer healthcare division demerged in 2022. $5.1 billion purchase of US biotech company Tesaro,
Given the huge amounts of investment in which spearheaded the relaunch of the cancer
research and development needed to build a drug franchise.
pipeline it could be argued that the full sale of the Although small today, Liberum expects the cancer
consumer health division would serve long term franchise to generate sales of $2.7 billion by 2030,
shareholders better than a demerger. driven by Zejula (ovarian cancer) and Blenrep
The deal with Pfizer in 2019 to combine (multiple myeloma).
respective consumer health businesses has created In vaccines, Shingrix, which is used to treat
one of the best quality consumer franchises the chicken-pox related disease shingles, has
boasting such iconic brands as Panadol, Sensodyne shown good efficacy and is expected to remain
and Advil. Such a high-quality asset might command an important driver of growth until the end of
a high multiple should it be sold in its entirety. the decade.
Liberum estimates the cancer and vaccines
BUILDING THE PIPELINE franchises could add around $7bn to revenues over
At the same time Glaxo is in the process of beefing the decade which will more than compensate for
up its biopharma division. It takes a long time stagnant sales elsewhere.
to build a pipeline of new drugs, but Glaxo has Liberum analyst Alistair Campbell commented:
arguably made good progress and expects to launch ‘Our detailed work shows that contrary to market
more than 20 new products over the next five scepticism GSK’s biopharma business will deliver
years. above sector sales growth and high single digit
The biggest drivers of value over the coming earnings per share growth to 2025. In fact, even in a
decade are expected to be the cancer and vaccine bear case GSK will still deliver sales growth to 2030,
franchises according to Liberum. in our view.’ [MG]
8 | SHARES | 22 April 2021
NEWS
Get the inside track on
new float MusicMagpie
The smartphones, consoles and computers reseller has a clear ESG angle
S
martphones-to-computers recycler and
reseller MusicMagpie (MMAG:AIM) is set
to swoop onto AIM (22 April) today through
a flotation valuing the ‘re-commerce’ business at
£208 million.
That market valuation equates to roughly 1.4
times historic sales and 15 times historic earnings.
Trading as musicMagpie in the UK and Decluttr in
the US, MusicMagpie is a specialist online reseller
of used electronic products, games, CDs and DVDs.
A ‘comfortably’ oversubscribed placing at 193p
raised £15 million of new money for the company,
though selling shareholders took £95 million off
the table.
Chief executive Steve Oliver tells Shares that
investments in proprietary technology and the trust
it has built with consumers give MusicMagpie an
edge in the market, with competition coming from
peoples’ propensity to leave old tech in drawers. about £153.4 million in the year to November
MusicMagpie estimates that in the UK alone, 2020, a compound annual growth rate of about
‘people are sitting on around £16.5 billion worth of 15.2%.
technology that they no longer use, and that only Over the same period, earnings before interest,
a small percentage of consumer technology items tax, depreciation and amortisation sparked up from
are currently recycled’. £2.6 million to approximately £13.9 million for a
The company takes these unwanted products CAGR of approximately 132%, demonstrating the
and uses proprietary technology to optimise operational leverage in the business.
the sales price for every item, simultaneously The new money raised at the stock market
listing them across multiple sales sites, including listing will repay debt and fund the expansion of
the musicMagpie and Decluttr websites and MusicMagpie’s smartphone rental proposition as
applications, as well as Amazon and eBay. well as the roll-out of its SMARTDrop kiosk concept,
The group has the highest number of seller which is a way for sellers to recycle phones for
reviews on both Amazon and eBay, where it cash, with kiosks now being rolled out in Asda and
consistently achieves positive feedback scores. Co-op branches.
MusicMagpie resold over 400,000 consumer MusicMagpie also expects to qualify for the
technology products to consumers in the year London Stock Exchange’s Green Economy Mark
to November 2020 and Oliver estimates the when it arrives on the stock market. This recognises
company resells around 2,500 tonnes of books and companies that derive 50% or more of their total
disc media each year that could have ended up annual revenue from products and services that
as waste. contribute to the global ‘Green Economy’ and could
MusicMagpie’s sales increased from roughly make the shares more attractive to ESG-minded
£115.5 million in the year to November 2018 to investors in the future. [JC]
22 April 2021 | SHARES | 9
TIME FOR VALUE?
Temple Bar Investment Trust Plc is a
well-established investment company,
with a new portfolio management team
at the helm. RWC’s UK Equity Income
team, was appointed to manage the
trust in November 2020. Led by Nick
Purves and Ian Lance, the team
employs a disciplined, value-oriented
investment approach.
Value investing has a very long history
of outperformance, but it has struggled
in the growth-dominated markets of
the last decade. Recent market
behaviour suggests this may be
beginning to change.
The Temple Bar Investment Trust is well
placed to benefit should this rotation
into UK value stocks continue.
For further information, please visit
templebarinvestments.co.uk
“In my 30-year career as a fund manager, there have been
two occasions in which a market dislocation has created an
opportunity for investors to potentially make very attractive,
outsized returns. The 2000 dotcom boom, and in 2009
following the global financial crisis. I believe we are now
witnessing a third.”
Ian Lance, Portfolio Manager
No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment. Investments can go up and
down in value and you may not get back the full amount invested. RWC Asset Management LLP is the appointed portfolio manager to the Temple Bar
Investment Trust Plc and this is issued by RWC Partners Limited. Both firms are authorised and regulated by the Financial Conduct Authority.It’s a great time to feast on
McDonald’s shares
Growth and decent income are on the menu at the fast-food chain
O
n 29 April McDonald’s
will release its first MCDONALD’S
quarter earnings and if BUY
analysts are right, the numbers (MCD:NYSE) $231.81
will be good.
Earnings of about $1.80 per Market cap: $173 billion
share is predicted, based on
Refinitiv forecast data, which
would smash the same period in
2020 where it reported $1.47 per
share and put the burger giant
back on its pre-pandemic track.
Like restaurants everywhere,
McDonald’s was happy to see the
back of 2020 as Covid-19 ripped
across the world and saw us all Despite this setback, as an ANALYSTS ARE LOVIN’ IT
at home for months at a time. investment McDonald’s did The Trefis analysts err on
McDonald’s saw revenue decline remarkably well last year. The the cautious side with their
9% in 2020 to $19.2 billion, while share price ended 2020 at nearly calculations. The consensus
earnings per share fell to $6.35 the same level as just before the earnings per share estimate
from $7.95 in 2019. pandemic broke, at around $215. for this year is $8.43, rising to
With most of the world $9.30 for 2022 and $10.26 for
McDonald’s growing now in reopening mode and 2023, according to Refinitiv.
dividends people rediscovering the Interestingly, of the 39 analysts
freedom to get out and about, that follow McDonald’s, 30 rate
Year Dividends
see friends and family, visit the stock as a buy, 10 with very
2023* $5.81 shops and leisure outlets and so high conviction. Not one single
2022* $5.52 on, investors can begin to look analyst calls the stock a sell.
2021* $5.25 ahead with far more confidence. The potential for increasing
2020 $5.04 McDonald’s is a prime market share is a key reason why
2019 $4.73 beneficiary of greater movement analysts are bullish. Thousands
2018 $4.19 of people as it is a popular choice of restaurants have been forced
2017 $4.04 for ‘food on the go’. to close their doors since the
2016 $3.61
Analysts at US broker Trefis onset of the pandemic, and
forecast McDonald’s revenues many of them will never reopen.
2015 $3.44
to grow by around 11% to $21.2 Their loss is McDonald’s
2014 $3.28
billion in 2021. They said: ‘Net opportunity. With its powerful
2013 $3.12 income is likely to grow to $5.5 and pervasive global brand and
2012 $2.87 billion as recovery post Covid-19 infrastructure, McDonald’s could
2011 $2.53 gains pace, increasing its become stronger as the weaker
Source: McDonald’s, *Refinitiv forecast earnings per share to $7.48.’ players pull out of the market.
22 April 2021 | SHARES | 11It has more than 38,000
restaurants in 120 countries
worldwide and it is said in
some marketing circles that
the chain’s ‘Golden Arches’ are
more widely recognised than the
Christian cross.
Last year Forbes ranked
McDonald’s as the tenth most
valuable corporate brand in the millennials, one of the chain’s bonds. The income stream also
world, worth $46.1 billion, and longer-run challenges, according looks very secure, with the
the fourth most prized non- to critics. payout ratio returning to fairly
technology business. McDonald’s It is also embracing typical 60% levels after inflating
owns and runs around 2,600 technology and data analytics to 80% last year. The dividend
outlets itself. The remainder are to improve efficiency and itself has more than doubled
franchises, where the company customer experience while over the past decade.
licences its operating model lowering running costs, such Measured versus its peer
to franchisees in a profit share as automated, multi-language group McDonald’s stands
arrangement. robotics ordering. on an enterprise value to
In recent years restaurants earnings before interest, tax,
have been refitted, brightened GROWTH AND INCOME depreciation and amortisation,
up and dragged into the 21st While there is a long-run growth or EV/EBITDA, of 18.2 versus
Century, with free customer story, income seekers will also the average of 17.3; a price to
wi-fi, phone charging points, be pleased. The company has cash flow of 20.1 against its
self-order kiosks and curb-side an unbroken 40-year-plus industry average of 13.9; and
pick-up through mobile app record for growing its dividend the peer group’s dividend yield
ordering. stretching back to 1976, even of 1.15%. Yet McDonald’s price
McDonald’s has been during Covid, where it increased to earnings ratio of 26.5 is just
providing home delivery in many the 2020 dividend by 6.5% to an 8% premium, based on a
markets for some time through $5.04. A $5.25 per share award is next 12-months basis. That’s not
deals with Uber Eats and Just expected this year. excessive, in our view.
Eat Takeaway (JET) in the UK. It That’s not a huge income yield, McDonald’s shares aren’t
is also testing meat-alternative about 2.3%, but it knocks the going to be a multi-bagger, but
products, which could bolster socks off the 0.625% on five-year the stock could make good gains
its social cachet with healthier- UK government bonds or 0.75% through 2021 as reopening
eating and ecology-mindful from five-year US government continues. Beyond this year, the
shares should continue to offer
the sort of sleep-easy steady
progress year after year that
helps built wealth through solid
capital gains and ever-increasing
dividends. [SF]
240
230
220
210
200
190
180
MCDONALD’S
170
2020 2021
12 | SHARES | 22 April 2021AS FOCUSED ON DIVIDENDS AS YOU ARE The Merchants Trust PLC The Merchants Trust aims to provide a rising income by investing in large UK companies with the potential to pay attractive dividends. Although past performance is no guide to the future, we’ve paid a rising dividend to our shareholders for 38 consecutive years, earning us the Association of Investment Companies’ coveted Dividend Hero status. Beyond a focus on dividends, Merchants offers longevity too. Founded in 1889, we are one of the oldest investment trusts in the UK equity income sector. To see the current Merchants dividend yield or to find out more about us, please have a look at our website. A ranking, a rating or an award provides no indicator of future performance and is not constant over time. You should contact your financial adviser before making any investment decision. www.merchantstrust.co.uk INVESTING INVOLVES RISK. THE VALUE OF AN INVESTMENT AND THE INCOME FROM IT MAY FALL AS WELL AS RISE AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED. This is a marketing communication issued by Allianz Global Investors GmbH, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, D-60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). Allianz Global Investors GmbH has established a branch in the United Kingdom deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website (www.fca.org.uk).
Virgin Wines’ shares
are cheap for an online
retailer and it is profitable
The premium wines purveyor should flourish long after lockdown restrictions ease
I
f you missed out on the
pandemic-driven share VIRGIN WINES
price gains at Naked Wines BUY
(WINE:AIM) fear not, for another (VINO:AIM) 224p
listed online wine retailer offers
a tasty proposition and fruitful Market cap: £126.5 million
growth prospects.
Open a position in Virgin
Wines (VINO:AIM) at 224p,
where the stock market
newcomer trades at a steep
discount to online peers.
Based on estimates for as they couldn’t get out to growth, driven by increased
the year to June 2022, Virgin bars, pubs and restaurants, investment in new customers
Wines trades on 19.1 times benefiting the likes of Virgin and underpinned by predictable
forward earnings, considerably Wines. While the sector is now subscription revenues.
less than many other online- lapping tough comparative sales The near-term outlook
focused companies on the UK figures, investors should look for consumer spending is
stock market. at the longer-term prospects positive and Virgin Wines’
For example, fashion retailer rather than focus on whether exposure to trends including
ASOS (ASC:AIM) trades on 2020’s big growth spike can be premiumisation in the alcoholic
33 times forward earnings repeated. drinks market, the shift to online
and sector peer Boohoo Virgin Wines offers exposure and the growth of subscription
(BOO:AIM) trades on almost to direct-to-consumer digital models mean outer year
32 times. Online musical earnings forecasts could prove
instruments retailer Gear4Music Customers signed up to conservative.
(GFM:AIM) trades on 38 times Virgin Wines’ WineBank club
forward earnings. PREMIUM FOCUS
Virgin Wines is cash generative As of Numbers AIM-traded Virgin Wines is one
and profitable, whereas rival Jun-17 66,000 of the UK’s largest direct-to-
Naked Wines is forecast to Jun-18 72,000 consumer online wine retailers
remain loss-making as it invests Jun-19 75,000 and the exclusive licensee of the
heavily to acquire customers and Feb-20 86,000 Virgin Wines brand in the UK and
build stock levels. Jun-20 96,000 Ireland from Virgin Enterprises,
Oct-20 102,000 an arm of Richard Branson’s
THIRSTY CUSTOMERS Dec-20 118,000
Virgin empire.
A lot of people ordered wine via Firmly focused on the
the internet during the pandemic Source: Virgin Wines
premium wine market, the
14 | SHARES | 22 April 2021company has a reputation for figure is through direct-to-
supplying high-quality wines consumer online retail channels,
curated to customers’ tastes and with Virgin Wines speaking for
good customer service. just 9%, so there is still a big
The company has been growth opportunity.
profitable in every year since Furthermore, the market for
Jay Wright’s appointment as wine specialists is expected to
CEO in 2008. It is highly cash grow by circa 3% per year with
generative, and it is benefiting the online segment growing by
from the structural shift in how roughly 11% to 12% per year
people buy more through digital from 2021 to 2025.
channels. The pandemic has turn and much higher margin Growing its craft beers and
further entrenched delivery as structure all point to Virgin spirits range, Virgin Wines also
a more viable and convenient Wines scoring as the premium sees opportunities to expand in
option for wine drinkers. investment case on offer.’ overseas territories such as the
Virgin Wines’ business model US, Europe and Australia over
UNCORKING THE POTENTIAL is ideally suited for a digital age; the long term.
Liberum Capital says the group it uses a wealth of customer
has ‘a more disciplined and data and an open source buying SALES PROFILE
targeted approach to growth’ model which ensures the Virgin Wines generated 33%
than rival Naked Wines, offering company can source the best sales growth to £56.5 million in
more choice in terms of its product at the best prices the year to June 2020, and then
subscription schemes. while also creating a range reported £40.6 million sales
Its wine clubs include of wines suited for the tastes in the first half of its current
something called WineBank and stylistic preferences of its financial year. Liberum is looking
whereby a customer deposits a customers. By selling exclusive for £70.3 million sales for the full
set amount of money into their products, Virgin Wines maintains year, which implies second-half
account each month and then premium prices and benefits sales of £29.7 million.
buys wine when they are ready. from minimal returns. While that second-half figure
For every £5 a customer saves would be slightly lower than
into their account, Virgin Wines TASTY OPPORTUNITY the £30.3 million recorded
gives them £1 extra to spend Management estimates the in the same period in 2020,
on wine. current UK addressable retail Liberum believes its estimates
Liberum says: ‘Stability of wine market, defined as are ‘prudent considering the
management and track record, households who buy more than positive momentum across
consistent delivery of profits, three bottles of wine per month unit economics and key
stronger sales retention and with price points of over £6 per performance indicators’.
paybacks, better cash flow bottle, is around £2.4 billion. For fiscal 2021, it forecasts
generation from high stock Around £780 million of that £4.6 million pre-tax profit (2020:
£2.8 million), rising to £6.5
Virgin Wines: Earnings and valuation million in 2022 and £8.1 million
in 2023. [JC]
PBT EPS PE
230
2020a £2.8m 4.7p 47.7 VIRGIN WINES
2021e £4.6m 8.3p 27.0
2022e £6.5m 11.7p 19.1 225
2023e £8.1m 13.2p 17.0
Source: Liberum Capital, Virgin Wines. June year end 220
PBT = Profit before tax, EPS = Earnings per share, PE = Price to earnings ratio
A = Actual, E = Estimate MAR APR
22 April 2021 | SHARES | 15Sponsored content
WHAT IS REFLATION AND WHY IT IS PARTICULARLY
BENEFICIAL TO VALUE AND RECOVERY STOCKS?
shorter duration ones. Therefore, in an inflationary
environment, where interest rates are rising, these
shorter duration value stocks become relatively more
attractive.
At a stock and sector specific level, there are many
Hugh Sergeant, Head of Value and cheaply valued stocks in sectors which are more
financially geared to interest rates moving upwards.
Recovery at River and Mercantile. Perhaps the most obvious of these is financials.
Banks, for example, have struggled in the context of
the very low interest rates we have seen for several
REFLATION CAN BE broadly defined as expansion years now, as it’s difficult to make much margin
in the level of output of an economy, by increasing between what you charge to lend money and your
government stimulus, using fiscal or monetary policy. cost of borrowing when both are near zero! As rates
This is intended to stimulate corporate and consumer rise, this will support a better environment for banks’
spending, so benefits value and in particular, cyclical revenues and profitability.
recovery stocks, which by their nature are geared
towards an uptick in the economy. Given the benefit that a reflationary environment can
bring to certain stocks and sectors, it is interesting to
There is also what is known as the ‘duration’ effect look at how we position a portfolio to take advantage
– how sensitive a company’s valuation is to changes of this. We will be looking in more detail at this in our
in interest rates. Duration refers to how long it takes next article.
for an investor to be paid back by a future stream of
cash flows. Much of a high growth stock’s value is
derived from earnings which will be delivered quite a The ES R&M UK Recovery Fund enables investors
long time into the future, so they are known as long to have targeted exposure to those companies
duration stocks. Value stocks on the other hand, that R&M believe to have particularly strong
tend to have their value based on more imminent potential to create value, following a period of
earnings, making them shorter duration. Changes depressed profits that could enable significant
in interest rates affect the valuations of the longer recovery. To find out more, visit here.
duration stocks more than they do those of the
This is a financial promotion within the meaning of the FCA rules. For further details of the specific risks and the
overall risk profile of this fund; as well as the share classes within it, please refer to the Key Investor Information
Documents and ES River and Mercantile Funds ICVC Prospectus which are available on our website
www.riverandmercantile.com.
The value of investments and any income generated may go down as well as up and is not guaranteed.
An investor may not get back the amount originally invested. Past performance is not a reliable guide
to future results. Changes in exchange rates may have an adverse effect on the value, price or income of
investments. The information and opinions shared are subject to updating and verification and may be
subject to amendment. The information and opinions do not purport to be full or complete. No representation,
warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or
opinions shared by R&M, its partners, or employees. No liability is accepted by such persons for the accuracy or
completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the
information and opinions contained in this article.
Prepared and issued by River and Mercantile Asset Management LLP (“R&M”), registered in England and
Wales under Company No. OC317647, with its registered office at 30 Coleman Street, London EC2R 5AL. R&M
is authorised and regulated by the UK Financial Conduct Authority (FRN 45308) and is a subsidiary of River
and Mercantile Group PLC which is registered in England and Wales under Company No. 04035248, with its
registered office at 30 Coleman Street, London EC2R 5AL. Equity Trustees Fund Services Ltd is the Authorised
Corporate Director (the “ACD”) of the ES River and Mercantile Funds ICVC and of its sub-funds. The ACD is
authorised in the United Kingdom and regulated by the Financial Conduct Authority (FRN 227807) and has its
registered office at Pountney Hill House, 4th floor, 6 Laurence Pountney Hill, London EC4R 0BL.ELEMENTIS DISCOVERIE
(ELM) 137p (DSCV) 797p
Gain to date: 8.8% Gain to date: 32.8%
Original entry point: Original entry point:
Buy at 125.9p, 18 February 2021 Buy at 600p, 10 December 2020
REPORTS THAT chemicals group Elementis ELECTRONICS ENGINEER
(ELM) had been the subject of a takeover DiscoverIE (DSCV) is riding high
deal that could value it at over 200p per share after its latest trading update
proved unfounded. drove material upgrades to
Late on 20 April its US-listed rival Innospec analysts’ earnings forecasts.
revealed it had made a cash and shares bid of The company designs and
160p but that this offer had been rebuffed and a manufactures bespoke kit for highly regulated
deal was no longer under active consideration. industries including healthcare, renewables,
Analysts at Jefferies say that while they ‘expect transport and aerospace.
the market to be disappointed by this news, the On 20 April the company said it expected
ongoing takeover interest in Elementis implies underlying earnings for the 12 months to 31
that its shares have been cheap’. March 2021 to be above the upper end of market
These latest developments came after expectations as trading momentum in the final
Elementis rejected three takeover bids last year two months of the year continued to strengthen.
from another US firm, Mineral Technologies, Group sales in the second half were 9% ahead
the highest of which valued Elementis at 130p of the first half with a return to organic growth
per share. of 1% in the last two months of the year, with
The stock is still trading significantly below overall group sales for the full year 3% lower.
the 200p mark, which is the level at which the ‘The strong order book and momentum
company has long since argued it should be provide a solid base for sustained organic
valued, and we think shareholders should be sales growth whilst further investing in growth
patient until the shares reach this level. initiatives,’ the company said.
Broker Peel Hunt upgraded its March 2021 and
March 2022 pre-tax profit forecasts by 8% apiece
to £29.6 million and £32.3 million respectively.
Based on the upgraded forecasts for March
2022, the shares trade on a price to earnings ratio
of 29.9.
850
DISCOVERIE GROUP
140 800
130 750
ELEMENTIS
120 700
110 650
100 600
90 550
80 500
70 450
60 400
50 2020 2021
2020 2021
SHARES SAYS:
SHARES SAYS: While the shares trade on a rich rating, we’re happy
We still think there is considerable unrealised value to stick with them while there is positive earnings
in Elementis. [TS] momentum. [TS]
22 April 2021 | SHARES | 17TRACSIS TOUCHSTONE
TOP
(TRCS:AIM) 820p STOCKS EXPLORATION
FOR (TXP:AIM) 101.6p
Gain to date: 30.2% 2021
Original entry point: Gain to date: 95.4%
Buy at 630p, 23 December 2020 Original entry point:
Buy at 52p, 25 June 2020
INVESTORS ARE getting far more confident that
big events will get back going again this summer IT HAS been a volatile few
as the UK’s vaccine rollout filters through the weeks for small cap oil and gas
population, and investors have been snapping up play Touchstone Exploration
Tracsis (TRCS:AIM) stock in anticipation. About (TXP:AIM) as it announced
half of the Leeds-based transport infrastructure mixed news from its Ortoire
and analytics software company’s business comes block in Trinidad & Tobago.
from planning and running music festivals, motor However, confirmation that
races and other major events that attract people the Cascadura Deep-1 well had
in their thousands. yielded a significant natural gas discovery (12 Apr)
Reopening came too late to save Glastonbury helped set the shares on the right path.
this year but there is optimism that events later Touchstone had been knocked off course by
in the summer will go ahead, such as the world- news that another well – Chinook-1 – contained
renowned Isle of Wight Festival, pencilled in for oil rather than gas as investors had hoped and
mid-September. expected (31 Mar).
Tracsis management remain understandably Natural gas is particularly in demand in
cautious given the difficulty of predicting the Trinidad thanks to its large industrial sector and
Covid virus impact over the coming weeks and Touchstone’s apparent bias towards gas had also
months, yet the company remains convinced insulated it from volatility in the oil price.
of hitting its own 10% organic revenue growth The company has a large inventory of prospects
target this year to 31 July 2021. to drill on Ortoire with a well on its Royston
With a little luck and sensible precautions, prospect expected to be in focus soon.
getting some ‘live’ shows going this summer Shore Capital analyst Craig Howie
could push performance beyond that, and says the latest announcement provides ‘a
importantly, spark a series of upgrades for fiscal robust basis for upgrades – which we would
2022, helped by roughly £2.5 million of costs expect to process following discussions with
permanently stripped out of the business. management to firm up our expectations
regarding commercial deliverability, timing and
follow-on development plans.’
850
800 TRACSIS
750 180
160
TOUCHSTONE
700 EXPLORATION
650 140
120
600
100
550 80
500 60
2020 2021
40
20
SHARES SAYS: 2020 2021
The stock is up 25% since the end of March, and
this could be the start of a run of positive news SHARES SAYS:
events. [SF] We see scope for further upside in Touchstone. [TS]
18 | SHARES | 22 April 2021TREATT reflected the growth in those categories and the
transition into ‘more sophisticated, solution-
(TET) £11.45 driven’ products in citrus.
The company is also in the process of a moving
Gain to date: 88.6% to a new headquarters in Bury St Edmunds
which should boost efficiency and capacity.
Original entry point: Investec analyst Nicola Mallard commented:
Buy at 607p, 29 October 2020 ‘Despite the pandemic’s obvious impact on
the global beverage trade, Treatt continues to
OUR BELIEF that it would be premature to take deliver strong momentum. The move to cleaner,
profit in extracts and ingredients manufacturer healthier foods and beverages is increasing the
Treatt (TET) in January has been vindicated with size of Treatt’s addressable market.’
the shares extending their recent gains off the
back of another strong trading update (12 Apr). 1200
The company said it expected to grow its first- 1100
1000
TREATT
half revenue by 14%, while also achieving an 900
improvement in margins. 800
Revenue for the six months to 31 March was 700
600
seen rising to around £60.8 million. 500
Growth was particularly strong in the tea, 400
health and wellness, and fruit and vegetables 2020 2021
categories, ‘meeting growing global consumer
demand for healthier living,’ Treatt said. SHARES SAYS:
We continue to see Treatt as a buy. [TS]
The company said gross margin improvements
DESIGNED TO PERFORM
ACTIVELY MANAGED
TRUSTED FOR OVER 35 YEARS
DISCOVER AGT AT
WWW.AVIGLOBAL.CO.UK
Past performance should not be seen as an indication of future performance. The value of your investment may go down as well as up and you may not
get back the full amount invested. Issued by Asset Value Investors Ltd who are authorised and regulated by the Financial Conduct Authority.This is an advertising promotion
The stars align for UK equities
We believe a rare set of events have combined to make the UK equity market a highly attractive prospect right now -
and Claverhouse Investment Trust could provide an attractive vehicle to capitalise on it.
The income outcome EXHIBIT A – UK EQUITY INCOME INVESTMENT COMPANIES
The Mercantile’s portfolio of medium and smaller-
Investors around the world have grown 1.16
accustomed to dark times. The effects of the Peer group
1.14
pandemic continue to crush income hopes. In the
1.12
UK, dividend values fell by 44% in the course of JPMorgan
2020, hitting their lowest level since 2011.1 Against 1.10 Claverhouse
Investment
this backdrop, rare chinks of good news shine Trust plc
1.08
even more brightly – notably the announcement in
Dividend cover
January by JP Morgan’s Claverhouse Investment 1.06
Trust that it was increasing its dividend by 1.7%. 1.04
This remarkable achievement speaks to the in- 1.02
built advantage of investment trusts. Unlike ‘open-
ended’ funds, they can draw on a fixed pool of 1.00
capital that allows them to plan for the long term, 0.98
since they can retain 15% of their income. And
0.96
Claverhouse’s enjoys especially strong reserves. In 0.0 0.2 0.4 0.6 0.8 1.0 1.2
fact, the trust has now increased its dividend 48 Revenue reserves (Years’ dividend)
years in a row. That’s among the longest record of
unbroken rises of any UK equity-focused trust. Source: Numis Securities Research, Datastream, Company Data, Bloomberg, as at 19 May 2020.
The case for UK equities EXHIBIT B - UK EQUITIES CHEAP VS. OWN HISTORY (UK MARKET PRICE TO BOOK (X)
Claverhouse managers firmly believe that having a
UK Market Price To Book Value Max Min Median
UK focus will give investors a positive advantage in
4.0
the market of early 2021. With Covid-19 vaccine
3.5
programmes rolling out, recovery is tangible. The
investment skies are clearing. Given the heavy fiscal 3.0
support delivered by governments to bridge the 2.5
pandemic, interest rates are likely to be suppressed 2.0
for some time. But the US election and the long- 1.5
awaited resolution of Brexit have bolstered political 1.0
stability on either side of the Atlantic. 0.5
0.0
1980 1990 2000 2010 2020
Source: Datastream, Morgan Stanley Research. Data from 1 January 1980 to 27 October 2020. Past performance is not a
At this pivotal point of the pandemic, reliable indicator of current and future results
UK stocks offer a tantalising prospect.
WILL MEADON, CLAVERHOUSE PORTFOLIO DIRECTOR.
UK equity prices are currently trailing well below recent performance: a glance at the records shows
them hovering near the lows of the 1980s. “They are not only historically cheap, but attractively valued
compared to overseas markets – notably the US, which is dominated by sky-high tech valuations,”
Meadon says.
1 https://www.linkgroup.eu/insights/publications/uk-dividend-monitor-q4-2020/This is an advertising promotion
Under-performance in recent years has led many EXHIBIT C – UK MARKET CHEAP VS OTHER EQUITY MARKETS – THE >30% DISCOUNT FOR MSCI UK
investors to avoid UK stocks. Yet the coming VS. MSCI WORLD IS AT OVER 40 YEAR LOW
recovery might be their chance to shine. In
particular, it could lift the currently unfashionable MSCI UK vs MSCI World Average % Premium On PE, PBV & PDiv
10
‘value’ stocks – long-established sectors that
appear to be undervalued compared to their 0
performance and potential – such as construction, -10
oil and gas and financial services. Claverhouse is Median
-20
well placed to capitalise on such a development:
its portfolio includes a range of both blue-chip -30
and mid-cap value stocks. -40
-50
Buy UK, buy global
-60
Investing in UK equities doesn’t mean turning 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
your back on the rest of the world; quite the
reverse. AstraZeneca’s UK-Swedish base and its Source: Source: J.P. Morgan Asset Management using data from MSCI, I/B/E/S, Morgan Stanley Research. Based on PE (Price
international vaccine rollout is currently the most to Earnings),PBV (Price to Book Value) and PD (Price to Dividend). Average relative valuations use 12 month forward data
prominent example of the worldwide footprint of where available. Data from 31 December 1974 to 31 May 2020. Past performance is not a reliable indicator of current and
nominally UK companies. Like BP, Unilever or future results.
GlaxoSmithKline, it’s a global firm that happens to
be UK-listed. EXHIBIT C – LONG-TERM CAPITAL MARKET ASSUMPTION EXPECTED RETURNS IN COMING 10-15
“In fact, 70% of the revenues of the UK’s top 100 YEARS
stocks originate from overseas,” Meadon points
out. “The UK economy is not the UK stock market, %, annualised return in GBP
and the UK stock market is not the UK economy. UK large cap
Emerging markets
Asia ex-Japan
UK core real estate
Eurozone large cap
“So investing in UK equities is a way of
Japan
buying into some of the best global
Global infrastructure
companies without having to pay the
US large cap
inflated valuations you see in other
UK investment-grade corporate bonds
equity markets. By opting for an
UK cash Equity
investment trust, investors can exploit Fixed income
UK Gilts Alternatives
this anomaly in a diversified way, while
UK inflation-linked Gilts Historical return since 2009
benefiting from increased income.
-2 0 2 4 6 8 10 12 14 16
The case for investing now
Past performance is not a reliable indicator of current and future results
Given the twists of the past year, the course of the
recovery remains uncertain. We believe this
Even Meadon, who has spent much of his 38-year opportunity to get involved is brief – and
underlines the case for investing in a structure
industry experience at JP Morgan, has rarely narrowing. “Investors globally are, for the first
such as Claverhouse, where future income is
witnessed such an auspicious moment for UK time in 10 years at least, starting to show interest
supported by a strong revenue reserve base. But
equities. “This is a very unusual confluence of in value stocks,” Meadon warns. In our view, that
a market that’s historically and globally cheap,
events: those stars don’t align very often,” he means there’s a limited time for informed
and simultaneously well placed for recovery, is a
declares. investors to jump on board the UK equities craft
singular event.
Like any heavenly collision, however, the before it takes off.
Find out more about JPMorgan Claverhouse Investment Trust
This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest
thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management
for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions,
statements of The warning in brackets must be removed if the Marketing Communication has been released for General Public. Financial market trends or investment techniques and strategies expressed
are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not
guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance
with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products
or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst
it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset
management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with
our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.
com/emea-privacy-policy. Investment is subject to documentation. The Annual Reports and Financial Statements, AIFMD art. 23 Investor Disclosure Document and PRIIPs Key Information Document can be
obtained free of charge from JPMorgan Funds Limited or www.jpmam.co.uk/investmenttrust. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated
in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.
LV-JPM53174 | 03/21 | 0903c02a82b0521dEvenlode to rival
Fundsmith with new
global growth fund
The fund manager is best known for its income funds but is now looking at growth to
accommodate its investment ideas
B
est known for its UK and
global income funds,
asset manager Evenlode
is to launch a growth-themed
global equity fund after its
research unearthed many strong
investment ideas which don’t pay
much in the way of dividends and
therefore wouldn’t feature in its
other funds.
TB Evenlode Global Equity
(BMFX289) will invest in
companies with attractive have low portfolio turnover with portfolio includes US tech
structural growth opportunities, long-term holding periods. firms Accenture, Microsoft and
sustainable competitive That puts it in direct Google owner Alphabet, as
advantages, and sustainable competition for investors’ well as payment giants Visa and
reinvestment that safeguards and money with Fundsmith Equity Mastercard, UK names including
extends their businesses. (B4MR8G8) which follows a Relx (REL) and Unilever (ULVR),
It will follow the same similar investment approach. and others like Heineken,
principles of other Evenlode Nestlé, Booking Holdings,
funds in looking for stocks with PORTFOLIO NAMES L’Oreal and LVMH.
high return on capital and strong According to the March Now might be a good time to
free cash flow and will aim to factsheet, Evenlode’s new launch a fund aimed at quality
and growth stocks, with the
Evenlode income funds: Track record market rotation into value and
small caps creating a buying
3 years 5 years 10 years opportunity for bigger names
EVENLODE INCOME 26.9% 57.3% 188.6% that have seen their share
IA UK EQUITY INCOME 10.4% 29.0% 92.6% price weaken in the past few
Source: FE Fundinfo, 19 April 2021. Total return months. It means Evenlode
can pick up certain stocks
potentially at a discount to
1 year 3 years their historical average.
EVENLODE GLOBAL INCOME 28.0% 49.6% But co-manager Chris Elliott
MSCI WORLD (IN GBP) 37.2% 53.5% says that didn’t come into the
Source: FE Fundinfo, 19 April 2021. Total return team’s thinking in launching the
Evenlode Global Income launched in November 2017, so there is no 5 or 10 year data fund, rather that after testing the
22 | SHARES | 22 April 2021You can also read
