Page 21 - DIY Investor Magazine - Issue 27

‘HELPED THE TORTOISE FUND TO DELIVER RETURNS OF MORE THAN 22% IN THE LAST THREE MONTHS’
Within the portfolio the Global Equity Fund, International
Equity Fund and the Tortoise Fund have stood out over the past three months. In the Global and International funds, we understand that stock selection has driven the majority of the relative performance and the returns have come from a diverse number of stocks. Samsung, AP Moller and MercadoLibre were three of the standout winners across the funds, while the high level of exposure to emerging markets was beneficial for the trust.
The Tortoise Fund, which has a strong long-term track record in the long/short equity space since launching in 2007, saw
its long weighting towards financials drive returns. With the short book having been scaled back significantly in the spring of 2020 after markets had crashed with the initial onset of COVID-19, the long book was also increased.
This was a result of the managers having taken advantage of what they deemed opportunities in oversold companies with good long term structural drivers, and helped the Tortoise fund to deliver returns of more than 22% in the last three months. Having seen a significant improvement in performance in recent months, we are enthusiastic for what 2021 has in store for the trust. Although MAJE’s NAV has performed strongly in recent times, the discount remains wide at present, and we also believe there is plenty of room for the underlying NAV to perform.
In particular, the managers believe that the UK portion of the portfolio (representing c. 35%) offers exciting opportunities. Within this area the managers believe there are an abundance of undervalued companies with good structural growth opportunities. The uncertainty surrounding Brexit has been a key factor in the underperformance of the UK market in their view, as it was shunned by global investors.
The UK equity portfolio offers exposure to companies that
are performing well operationally and that compare well to global peers, as the global economy recovers as the vaccines are rolled out. The global funds have demonstrated strong performance in 2020 due, we understand, to fundamental stock picking and have a broad portfolio not skewed to any investment style. Further details on performance can be found here.
The valuation of the unquoted stake in MAM has been a significant drag to the performance of MAJE’s NAV, having been written down by 28% in 2020 due a reduction in AUM.
The MAM valuation methodology is reported quarterly and was changed in May 2020.
It now reflects market multiples (discounted by 20%), current earnings, and surplus cash after deducting 200% of regulatory capital. MAM has paid a significant dividend to MAJE, which currently yields 5% and trades on a discount of 16%.
Read more about the exciting opportunities MAJE offers here > To buy this trust login to your EQi account
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Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that Independent financial advice should be taken before entering into any financial transaction.
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21 DIY Investor Magazine | Mar 2021