Event Voice: Your Questions Answered by Mirabaud Asset Management at the Global Equities Event

Partner Content - Mirabaud Asset Management sponsor of the recent Global Equities event. Paul Middleton gives an overview of the Mirabaud Sustainable Global Dividend Fund and its performance.

1. Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors and the role your fund could play in an investor's portfolio?

The Mirabaud Sustainable Global Dividend Fund offers an attractive combination of dividend yield (2.6% vs. 2.0% for the MSCI All Countries World Index, as at 30 August 2024) with the potential for capital returns. We are clearly in a volatile market, which is vacillating between hard and soft-landing outcomes in the US and causing a great deal of rotation under the surface. In this environment, we believe that having an anchor in the form of dividend yield is very attractive. Additionally, we strive to capture capital returns, which will predominantly be driven by dividend growth for the stocks in the portfolio. All stocks in the portfolio have this combination of dividend yield and dividend growth. We invest thematically in nine areas that we believe are structurally growing faster than the wider economy. These themes drive the dividend growth for our stocks. One example is our "Explosion of Data" theme. Here, Broadcom and TSMC stand out in having enabled us to benefit from the GenAI tailwind over the past year. Across the themes, we invest in what we believe to be both high-quality global leaders and ESG leaders.

2. What do you see as the big opportunities and risks for your strategy?

We think there are many attractive features of the global dividend asset class, but that sometimes these are packaged with other, less-attractive features. If you look at the MSCI All-Country World High Dividend Index as a proxy, this gives an understanding of these less desirable features, with very large sector biases (overweight Staples, underweight Tech), regional biases (underweight US), and style biases (overweight Value). We are not arguing that any of these specific biases are bad, we just don't want these factors to drive relative returns. We therefore construct portfolios in such a way as to emphasise stock selection, and this enables us to target the attractive characteristics of the asset class but mitigate the exposures we do not want. We are stock pickers, this is our source of alpha, and so we want to make sure that this drives relative returns for the fund. We therefore construct portfolios which have high stock-specific risk. In reality, this means that we do not have large sector, regional or style risks or bets in the portfolio. Stock specifics present both the main opportunities and risks in the strategy.

3. Can you identify a couple of key investment opportunities you are playing at the moment in the portfolio?

We believe the market is broadening out, with rates failing and data slowing. This is producing some interesting opportunities for the strategy. For example, the US telco tower operator stocks are becoming interesting after a tough couple of years, characterised by slower growth and interest rate sensitivity. American Tower (AMT) is the leading tower operator in the US, which is a three-player market. Its growth is tied to mobile phone data usage, which continues to grow 20%+ per annum. Over the last couple of years, telco carriers paused spending on their networks, leading to slower growth for AMT. Leasing activity is now picking up again, the company is exiting the Indian market (which has been an issue for it), and the valuation is attractive relative to history.

4. Which are the main factors that have contributed to the performance of the fund? What is the volatility of the fund?

The fund tends to show a lower volatility than that of the benchmark and also tends to have a lower beta. Its annualised volatility since inception is 13.88% vs. 14.83% for the benchmark, with since inception beta of 0.89*. Therefore, it tends to perform well in uncertain environments. Stock specifics are the key driver of relative returns over time. The fund will also tend to do better when market breadth is higher and when index returns are not driven by large, non-dividend paying names.

*The fund's benchmark is the MSCI AC World Index TR Net USD. All data to 30 August 2024. 

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About Mirabaud Asset Management

We are an independent active asset manager that truly believes accountability drives the right outcomes from high-conviction, long-term sustainable investing. Mirabaud Asset Management is part of the Mirabaud Group, an international provider of bespoke financial and advisory services established in 1819 in Geneva, Switzerland. We became the independent, pure-play investment arm of the Group in 2012. Since then, we have developed capabilities across fixed income, equities and private assets, offering a range of investment solutions that align with our clients' objectives and share their principles. Our strong sense of purpose, deep-rooted through seven generations of private ownership, defines our approach to asset management. We invest today to build the world for the generations to come.

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This marketing material contains or may incorporate by reference information concerning certain collective investment schemes ("funds") which are only available for distribution in the registered countries.  It is for your exclusive use only and it is not intended for any person who is a citizen or resident of any jurisdiction where the publication, distribution or use of the information contained herein would be subject to any restrictions.  It may not be copied or transferred. 

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Issued by: in the UK: Mirabaud Asset Management Limited which is authorised and regulated by the Financial Conduct Authority.  In Switzerland: Mirabaud Asset Management (Suisse) SA, 29, boulevard Georges-Favon, 1204 Geneva, as Swiss representative. Swiss paying agent: Mirabaud & Cie SA, 29, boulevard Georges-Favon, 1204 Geneva. In France: Mirabaud Asset Management (France) SAS., Spaces 54-56, avenue Hoche, 75008 Paris. In Luxembourg, Italy and Spain: Mirabaud Asset Management (Europe) SA, 6B, rue du Fort Niedergruenewald, 2226 Luxembourg. The Prospectus, the Articles of Association, the Key Information Document (KID) as well as the annual and semi-annual reports (as the case may be), of the funds may be obtained free of charge from the above-mentioned entities and on the webpage: https://www.mirabaud-am.com/en/funds-list/. Further information on sustainability is available at the following link: https://www.mirabaud-am.com/en/responsibly-sustainable.