MARCH 2020 FUND FACTSHEET

Fund Aim

The Company's investment policy is to invest in shares issued by small and mid sized companies with a market capitalisation (at the time of investment) of between £500 million to £15 billion (although the Company expects that the average market capitalisation of the companies in which it invests to be approximately £7 billion) on a long-term, global basis.The Company’s approach is to be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies. Accordingly, it will pursue its investment policy by investing in approximately 25 to 40 companies as follows:

(a) the Company can invest up to 10 per cent. in value of its Gross Assets (as at the time of investment) in shares issued by any single body;

(b) not more than 20 per cent. in value of the Gross Assets (as at the time of investment) can be in deposits held with a single body. In applying this limit all uninvested cash (except cash representing distributable income or credited to a distribution account that the Depositary holds) should be included;

(c) not more than 20 per cent. in value of the Gross Assets (as at the time of investment) can consist of shares issued by the same group. When applying the limit set out in (a) this provision would allow the Company to invest up to 10 per cent. in the shares of 2 companies which are members of the same group (as at the time of investment);

(d) the Company’s holdings in any combination of shares or deposits issued by a single body must not exceed 20 per cent. in value of its Gross Assets (as at the time of investment) overall; 

(e) the Company must not acquire shares issued by a body corporate and carrying rights to vote at a general meeting of that body corporate if the Company has the power to influence significantly the conduct of business of that body corporate (or would be able to do so after the acquisition of the shares). The Company is to be taken to have power to influence significantly if it exercises or controls the exercise of 20 per cent. or more of the voting rights in that body corporate; and

(f) the Company must not acquire shares which do not carry a right to vote on any matter at a general meeting of the body corporate that issued them and represent more than 10 per cent. of these securities issued by that body corporate.

 
Portfolio Comment for March 2020

A position in Rational AG was initiated during the month. The company produces automated professional ovens for restaurants and mass catering venues. Due to the potential impact on the restaurant and catering trade of social distancing measures, the shares of the company have declined 44% since the start of the year. Given its competitive advantage, high returns on capital and strong cash flow, as well as the cash available on its balance sheet, we believe the company will be able to exit the crisis in a good position. We therefore see the recent share price decline as an attractive opportunity to build a position in the company. The top 5 contributors in the month were Masimo, Fisher & Paykel, Ambu, Chr. Hansen and Recordati. The top 5 detractors were Sabre, Rightmove, Paycom, Equifax and IPG Photonics.

The OCF (Ongoing Charges Figure) is the total expenses paid by the fund (excluding bank overdraft interest), annualised, against its average net asset value. The OCF will fluctuate as the average net assets and costs change. The OCF is updated following the publication of accounts for the periods ending 30th June and 31st December.

NB Where a position is being built for the fund the company name is not disclosed in factsheet data.