Martin Currie Global Portfolio has announced results for the six months ended 31 July 2016. It underperformed its benchmark, the FTSE World Index, over this period. Its net asset value increased by 17.6% on a total return basis and the share price total return was 19.8%, compared to the benchmark return of 20.3%. The total dividend for the period is 1.80p, the same as last year.
The report says that, at the stock level, the top contributor to performance was Arm Holdings, the UK technology company which became the subject of a takeover bid from Softbank in July. The largest active position in the portfolio, Lockheed Martin, continued to perform well. They believe that, as a defence contractor with long-term contracts, it has been shielded from the volatility in economic expectations and resultant share price fluctuations.
On the other side, two of their largest holdings performed poorly in this period. L Brands (better known by its main retail brand, Victoria’s Secret) had enjoyed strong share price performance for a number of years. Indeed, its valuation was looking a little stretched and they had been reducing our position in this long-held stock. So when it reported a couple of months’ weaker sales numbers, the share price declined quite dramatically – an overreaction in our view. Meanwhile, the UK-based insurance company Prudential continues to operate well and grow, especially in Asia. However, its share price has fallen along with the insurance sector as interest rates have declined. Prudential is now valued extremely cheaply compared with its history. They continue to hold both these companies in the portfolio.
MNP : Martin Currie Global Portfolio held back by holding in L Brands, amongst others