JO Hambro UK Dynamic Fund

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1 Powered by TCPDF ( JO Hambro UK Dynamic Fund Launch Date Fund Size Legal Structure 16/06/ M OEIC (OEIC) Share Class ISIN AMC OCF JOHCM UK Dynamic Y Acc in GB GB00BDZRJ % 0.69%* JOHCM UK Dynamic Y Inc TR in GB GB00BDZRJ % 0.69%* This fund s objective is to generate long-term capital growth through active management of a portfolio of UK equities. Fund manager Alex Savvides aims to invest in high quality, unloved and under-researched stocks in a patient, disciplined and unemotional manner. This means that at times the fund may underperform over the shorter term. Savvides joined JO Hambro in 2003 as co-manager on the UK Growth fund. Prior to joining the company, he spent seven years in sales, trading and research roles focusing on UK companies at various broking firms. He is a fellow of the Securities Institute and has a Securities Institute Diploma. He also holds a BA (Hons) in Politics from the University of Nottingham. Whilst the fund invests in companies of all sizes, it sometimes has a bias to mid- and small-caps. At its current size this fund is nimble enough to be able to invest in smaller companies without the constraints applicable with larger funds. Savvides seeks companies which are under-earning, undervalued and misunderstood, and/or mismanaged and inefficient, but with dynamic managers who are willing to create change. Change in this context should always maximise cash and the return on capital employed. discrete annual performance to last quarter end (GBX) 0-12m 12-24m 24-36m 36-48m 48-60m Fund Performance 4.36% 29.57% -6.11% 6.51% 18.33% Sector Performance 2.65% 18.07% -3.35% 5.73% 13.87% to sector Rank within sector 80/274 8/ / /251 66/244 Quartile clarity verdict: The investment process of this fund is based on finding corporate change which is not yet recognised by the market. Fund manager Alex Savvides aims to identify businesses benefiting from restructuring to improve cash-flow and returns on capital. He has mainly been successful in this objective, but performance can be relatively volatile at times. Data supplied by FE Analytics as at June 2018, bid/bid, income reinvested. Risk warning: The past is not necessarily a guide to future performance. The value of your investment and the income from it can fall as well as rise and is not guaranteed. You may not get back the full amount invested. Our views are based upon our understanding of current legislation in England and Wales. Levels and bases of, and reliefs from, taxation are subject to change and their value to you will depend upon your personal circumstances. You should not act on any of the information without seeking professional advice. clarity Ltd is authorised and regulated by the Financial Conduct Authority (FCA). clarityglobal.com clarity Ltd 2018

2 Monthly Portfolio Review June 2018 Data as at 31 May 2018 JOHCM UK Dynamic Fund Fund overview Objective: to generate long-term capital growth through active management of a portfolio of UK equities Senior Fund Manager Alex Savvides believes misunderstanding of corporate change by the stock market regularly presents opportunities for the patient, disciplined and unemotional investor His process aims to proit from understanding change and investing where there is the highest probability of success but with the highest cash-based valuation support Performance highlights Return since launch (%) Return history 1m 3m 1yr 3yr 5yr 10yr SL Annualised* A Acc GBP Benchmark Quartile** Discrete 12 month performance to A Acc GBP Past performance is no guarantee of future performance. Fund - A Acc GBP FTSE All-Share TR May 2010 May 2012 May 2014 May 2016 May 2018 The value of an investment and the income from it can fall as well as rise as a result of market and currency luctuations and you may not get back the amount originally invested. The Funds investment include shares in small-cap companies and these tend to be traded less frequently and in lower volumes than larger companies making them potentially less liquid and more volatile. The annual management charge is deducted from the capital of the Fund. This will increase the income from the Fund but may constrain or erode potential for capital growth. We recommend that you read the Prospectus and Key Investor Information Document available from the address overleaf or from our website. Source: JOHCM/FTSE International/Bloomberg, NAV of Share Class A in GBP, net income reinvested, net of fees. The A Acc GBP class was launched on 23 October During the period 16 June 2008 to 23 October 2009 the performance record is based on the pre-existing share class that had a higher management fee. Benchmark: FTSE All-Share TR. Performance data for the period 16 June 2008 to 22 October 2009 is for Ryder Court UK Dynamic Fund. From 23 October 2009 onwards, the Fund converted to the JOHCM UK Dynamic Fund. Performance of other share classes may vary and is available on request.*annualised since launch. **Sector quartile ranking: IA UK All Companies. Source and copyright of Citywire. Alex Savvides is A rated by Citywire for his three year risk-adjusted performance for the period 30/04/2015 to 30/04/2018. Citywire awards apply to the Manager, rather than the Fund. A Acc GBP ISIN: GB00B4T7HR59 Fund details Fund size Strategy size Contact details J O Hambro Capital Management Ground Floor, Ryder Court 14 Ryder Street London SW1Y 6QB OEIC Dealing & Investing / (0) (international calls) Fax GBP 1.1bn GBP 1.4bn Launch date 16 June 2008 Benchmark No. of holdings 46 Domicile Fund structure Denominations Valuation point info@johcm.co.uk FTSE All-Share TR UK UCITS GBP Historic Yield (%) 3.40 XD date Pay date 12pm Dublin time 31 Dec 28 Feb Total strategy assets is updated quarterly and shown as at 31 March Fund managers 8 Alex Savvides Senior Fund Manager Alex has managed the Fund since launch. He joined JOHCM in 2003 and has 21 years of industry experience. Tom Matthews Analyst Tom has worked on the Fund since he joined JOHCM in 2013 and has 12 years of industry experience. For professional investors only Page 1 of 4

3 Portfolio analysis (%) Data as at 31 May 2018 Top 10 holdings Sector breakdown Absolute Absolute BP Shell GSK HSBC Electrocomponents i Lloyds Banking Group Morrisons Aviva Barclays Total 44.6 Consumer Services Industrials Telecommunications Financials Basic Materials Technology Oil & Gas Utilities Health Care Consumer Goods Cash Active bets Top 5 Electrocomponents 4.1 3i 3.6 Morrisons 3.5 QinetiQ 3.3 Aviva 2.8 Bottom 5 British American Tobacco -3.6 Shell -3.2 AstraZeneca -2.8 Diageo -2.7 Unilever -1.9 Market cap breakdown Absolute FTSE FTSE FTSE Small 15.6 Cash 2.6 FTSE Small = FTSE Small Cap, FTSE Fledgling and FTSE AIM Attribution & contribution (%) Stock attribution Sector attribution* Top contributors return return Electrocomponents 0.49 QinetiQ 0.35 British American Tobacco 0.23 BT 0.18 TT Electronics 0.16 Top detractors McBride Aviva Vodafone Barclays SIG Industrials 0.56 Oil & Gas 0.06 Consumer Goods 0.03 Utilities 0.03 Technology 0.02 Telecommunications 0.01 Health Care Basic Materials Financials Consumer Services *Excludes cash Source: JOHCM/FTSE International/Bloomberg. Benchmark: FTSE All-Share TR. Please note that due to rounding breakdowns may not add to %. All Attribution igures are as at end of day and are calculated on a gross basis. M P R June 2018 Page 2 of 4

4 Fund manager s commentary Equity markets continued to recover from their March lows in the UK and the US, whilst European markets struggled somewhat in the face of new political crises in both Italy and Spain. The Fund performed broadly in-line with the benchmark in what was a tougher month for outperformance given declining bond yields and weakening sterling. Performance over 1 month % Fund - A Acc GBP FTSE All-Share TR Investment background Equity markets continued to recover from their March lows in the UK and the US, whilst European markets struggled somewhat in the face of new political crises in both Italy and Spain and a continued moderation in various PMI data. Emerging markets continued their recent struggles in the face of continued US dollar strength and various headline idiosyncratic issues recently affecting Argentina, Brazil and Turkey in particular. Further headline news regarding trade wars and the on-off US summit with North Korea did not help the general macro environment. Fund review The Fund performed broadly in-line with the benchmark in what was a tougher month for outperformance given declining bond yields and weakening sterling. Declining bond yields are not immediately supportive to this Fund, which remains underweight large-cap defensives. At the stock level, May was a key month for the Fund with a number of the Fund s largest active positions being March year-ends and therefore reporting full year results. Three high conviction positions, Electrocomponents, 3i and QinetiQ (collectively c. 11% of the portfolio), all reported excellent full-year results, which saw earnings or NAV upgrades in all cases and led the share prices higher immediately post the earnings announcements. The performance from Electrocomponents was particularly noteworthy, given a set of very strong results across the board, c. 7-10% earnings upgrades for the year ahead and the irst bolt-on acquisition from this management team (and from this company for a generation). The shares were up c. 15% after results and delivered c. 50bps of relative performance. QinetiQ s results also beat expectations on both earnings and cash low. This saw the shares recover their poise after a surprising period of weakness in the last six months of last year. It is satisfying having suffered major underperformance from this share in the last 12 months to observe the recovery (+35bps relative for the month). On the negative side, Vodafone performed poorly after a set of in line/slightly weaker results, the announcement of a transaction to buy a set of European assets from Liberty Global and a CEO succession. Whilst a good deal the price paid, whilst not outlandish, is reasonably high and adds a level of gearing, which has perhaps placed the dividend under a little more perceived pressure. ITE traded poorly after announcing the proposed acquisition of Ascential s exhibitions business. Ascential (also a fund holding) seems to be, in the short run at least, getting the better side of the deal, given the sale price of 300m or c.4x sales (for a 25% ebitda margin business). For ITE management, some of whom used to run these assets, the upside is a broadening out of the current Russia-focused business, better revenue growth from geo-cloning and better management of the assets, and some cost synergies. While the assets are undoubtedly high quality, the price paid on the deal, and therefore the margin of safety, is questionable. Statistics Annualised since launch Active share* (%) Fund volatility (%) Benchmark volatility (%) Alpha 4.82 R squared 0.94 Correlation 0.97 Tracking error (%) 4.34 Information ratio 1.11 Sharpe ratio 0.66 Source: JOHCM/FTSE International/Bloomberg (calculated weekly). Performance data for the period 16 June 2008 to 22 October 2009 is for Ryder Court UK Dynamic Fund. From 23 October 2009 onwards, the Fund converted to the JOHCM UK Dynamic Fund. *The proportion of stock holdings in a fund s composition is different from the composition found in its benchmark. The greater the difference between the composition of the fund and its benchmark, the greater the active share. Fund awards & ratings Morningstar Overall Ratings and Morningstar Analyst Ratings are as at 30/04/2018. Copyright Morningstar UK Limited. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Elite Rating system is proprietary to FundCalibre Ltd, but should not be taken as a recommendation. M P R June 2018 Page 3 of 4

5 Country registration A Acc GBP A Dis GBP B Acc GBP B Dis GBP Y Acc GBP Y Dis GBP Austria Germany Ireland Singapore Switzerland UK Regulatory documents English language KIIDs can be found on our website at Foreign language versions are available on request by calling +44 (0) Share class details (Further details on additional share classes are available on request) Initial Annual Ongoing Minimum ISIN SEDOL Bloomberg WKN charge charge charge investment* A Acc GBP GB00B4T7HR59 B4T7HR5 JODYNIA LN A0YKNH Up to 5% 0.75% 0.84% 1,000 A Dis GBP GB00B4T85529 B4T8552 JODYNII LN A0YKNG Up to 5% 0.75% 0.84% 1,000 B Acc GBP GB00B4T7JX59 B4T7JX5 JODYNRA LN A0YKNF Up to 5% 1.25% 1.32% 1,000 B Dis GBP GB00B4TXJ339 B4TXJ33 JODYNRI LN A0YKNE Up to 5% 1.25% 1.34% 1,000 Y Acc GBP GB00BDZRJ101 BDZRJ10 JODYAGB LN A1XCA0 Up to 5% 0.625% 0.71% 50,000,000 Y Dis GBP GB00BDZRJ218 BDZRJ21 JODYIGB LN A1XCA1 Up to 5% 0.625% 0.71% 50,000,000 Performance fee: 15% on excess if Fund outperforms benchmark, calculated daily. Any underperformance carried forward. *Other currency equivalents apply. Important information This document is for professional investors only, it should not be circulated to retail investors. Sources for all data: JOHCM/FTSE International/Bloomberg (unless otherwise stated). The information in this document does not constitute, or form part of, any offer to sell or issue, or any solicitation of an offer to purchase or subscribe for Funds described in this document; nor shall this document, or any part of it, or the fact of its distribution form the basis of, or be relied on, in connection with any contract. Telephone calls to and from JOHCM may be recorded. Information on how JOHCM handles personal data which it receives can be found in the JOHCM Privacy Statement on its website: Issued and approved in the UK by J O Hambro Capital Management Limited ( JOHCM ) which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No: Registered address: Ryder Court, 14 Ryder Street, London, SW1Y 6QB. The registered mark J O Hambro is owned by Barnham Broom Holdings Limited and is used under licence. JOHCM is a registered trademark of J O Hambro Capital Management Limited. Citywire s Fund Manager Ratings identify the individual managers who have the best risk-adjusted personal performance track records over three years and highlights the funds they are currently managing. The Citywire Manager Ratings are based on what is referred to as the Citywire Manager Ratio (equivalent of the Information Ratio). This takes into account career moves, career breaks and switches in funds managed. The igure relects how much added value in terms of outperformance against the benchmark the fund manager delivers for each unit of risk assumed (where risk is deined as not mirroring the index s return). FE Alpha Manager and Crown Rating. Ratings do not constitute investment advice offered by FE and should not be used as the sole basis for making any investment decision. All rights reserved FE. Source: FTSE International Limited ( FTSE ) FTSE The Industry Classiication Benchmark ( ICB ) and all rights in it are owned by and vest in FTSE and/or its licensors. FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. Neither FTSE, nor its licensors accept any liability for any errors or omissions in the ICB. No further distribution of ICB is permitted without FTSE s express written consent. M P R June 2018 Page 4 of 4