Stonehage Fleming Global Best Ideas Equity Fund manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 quality businesses which are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.
Since launching in August 2013, the $1.03bn fund has attracted assets from private, professional and institutional investors and has returned 66.7% over the last five years, compared to the Global Equity peer group average of 30.0 % and the comparative index return of 40.0%.
Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder.
Technology names now make up 25.5% of the fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.
Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”
Commenting on the current market environment, Smit adds:
“The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”
The Global Best Ideas Equity Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.
