CONTRIBUTORS
Mel Jenner
Director, Investment Trusts (Edison)
Extract from the Edison Report: Written by Mel Jenner, Director, Investment Trusts. Edison, a leading investment intelligence and advisory firm, provides comprehensive research and analysis to empower investors and businesses around the world.
Martin Currie Global Portfolio Trust (MNP)
Manager ‘sticking to his knitting’; positive outlook*
Martin Currie Global Portfolio Trust (MNP) has been managed by Zehrid Osmani since October 2018. He runs a high-conviction, relatively concentrated portfolio of quality growth companies with pricing power.
The manager believes that pricing power is particularly important as he considers that consensus earnings expectations are too bullish and sticky inflation has pushed out the prospect of lower interest rates.
With investors focusing on short-term economic data points and central bank commentary, Osmani expects continued share price volatility, which over the longer term should favour MNP’s portfolio of high-quality growth businesses with strong cash flows and robust balance sheets.
Why consider MNP?
MNP has a portfolio of high-quality companies with long-term growth attributes. Important themes represented in the fund are the growth in artificial intelligence (AI), the energy transition and an ageing global population. Major AI beneficiary NVIDIA is the largest holding (c 10%) and has been in the portfolio since 2021.
Osmani believes that as central banks are in data-dependent mode, markets will remain volatile around the timing of interest rate reductions. Despite stock markets historically pricing in events ahead of time, the manager thinks that, given investors’ short-term focus, stocks can continue to move higher once there is greater certainty about interest rate cuts.
The investment approach is not influenced by the trust’s benchmark weightings as stocks are selected on a bottom-up basis. MNP’s resulting portfolio has a meaningful c 14pp underweight to the dominant US market (c 65% of the index). The trust has a c 14pp overweight in healthcare stocks and zero exposure to four of the 11 sectors, which together make up more than 17% of the benchmark.
MNP is a straightforward listed equity fund with no derivatives. Since 2013, the trust’s board has employed a zero-discount policy, aiming to ensure that, in normal market conditions, MNP’s shares trade close to NAV. This is an important consideration as generally investment company discounts are wider than their historical averages during a period of elevated investor risk aversion.
*Information correct as at the report's date of 11 June 2024. Please see Portfolio & Performance page for full current performance information.
This research note has been commissioned by Martin Currie Global Portfolio Trust from Edison. The research note does not constitute independent research for the purpose of legal and regulatory requirements and is therefore not subject to the regulatory protections afforded to independent research. In particular, the research note is not subject to any prohibition on dealing and both Edison and Martin Currie/Franklin Templeton, and their respective staff, may have dealt in the securities discussed in the research note.
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Important information
This information is issued and approved by Franklin Templeton Investment Management Limited (FTIML). It does not constitute investment advice.
The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the security transactions discussed here were or will prove to be profitable. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.
Past performance is not a guide to future returns. The return may increase or decrease as a result of fluctuations in the markets, in currency and/or in the portfolio.
Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.
The analysis of Environmental, Social and Governance (ESG) factors form an important part of the investment process and helps inform investment decisions. The strategy does not necessarily target particular sustainability outcomes.
The opinions contained in this document are those of the named manager(s). They may not necessarily represent the views of other Martin Currie managers, strategies or funds.
Shares in investment trusts are traded on a stock market and the share price will fluctuate in accordance with supply and demand and may not reflect the value of underlying net asset value of the shares. The majority of charges will be deducted from the capital of the company. This will constrain capital growth of the company in order to maintain the income streams.