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Manchester and London powers further ahead

Manchester and London powers further ahead – Manchester and London Investment Trust delivered an NAV return of 9.8% over the year ended 31 July 2019. By contrast, its benchmark, the MSCI UK Investable Market Index, returned just 1.0%. The trust was 50% ahead of its benchmark over three years at 31 July 2019. The dividend has been raised by 16.7% to 14p, this is paid from capital rather than revenue returns.

The manager breaks down the portfolio’s performance by sector. The trust focuses on the technology, healthcare and consumer sectors and the technology sector was the largest contributor to returns, adding 6.4% to the NAV. Sterling weakness was also beneficial. On technology, the manager said:

Microsoft Corporation accounted for over half of the sector return and was the biggest single contributor to portfolio performance during the year.

Other material positive performers included PayPal Holdings Inc, Match Group Inc, Visa Inc, Facebook Inc, Tencent Holdings Ltd, Adobe Systems Inc, The Walt Disney Company, Apple Inc and Polar Capital Technology Trust plc.

Video gaming was the key underperforming sub-sector during the year: Activision Blizzard Inc, Nvidia Corp, Electronic Arts Inc, Ubisoft Entertainment Sa, Take Two Interactive Software Inc and Nintendo Co. Ltd together contributed -3.9% to overall portfolio performance. During the year, we reduced exposure to this niche. The gaming sub-sector’s growth is forecast to be strong over the medium term but there is also a disruptive shift in pricing models which is increasing the volatility in earnings.

Alphabet Inc was the only other material negative contributor.”

In consumer, the portfolio made money from Amazon and LVMH but Alibaba was a detractor. In healthcare a holding in Align Technology lost them money and was sold leaving no exposure to this area.

MNL : Manchester and London powers further ahead


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