Global Select Fund (JOGIX)

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Fund Description

Fund managers Christopher Lees and Nudgem Richyal believe stock markets are inefficient and aim to exploit market anomalies via an investment process that combines both top-down and bottom-up research. Their distinct “4-Dimensional” investment process (stocks, sectors, countries, time/change) focuses on the behaviour of each share price to determine whether the most important driver of each prospective investment is stock specific, sector or country-based. The fund invests in both developed global (including the United States) and emerging markets, with the fund managers frequently drawing upon the stocks ideas generated by JOHCM’s regional equity teams.

Investment Strategy
  • Christopher and Nudgem have a Growth at a Reasonable Price (GARP) investment philosophy, which is sometimes described as core with a growth bias. They aim for consistency of returns by exploiting multiple market anomalies/inefficiencies.
  • Four-dimensional investment process (stocks, sectors, countries, time/change) with factors weighted to what actually drives each share price.
  • Growth and value disciplines are combined to help avoid the volatility that can occur in a single-style strategy, therefore to obtain better risk-adjusted returns over the medium and long term.
  • They look for stocks, sectors and countries that have displayed long-term underperformance (3 to 5 years) followed by short-term outperformance (6 to 12 months).
Investment Objective

The investment objective of the Global Select Fund (the “Fund”) is to seek long-term capital appreciation.

The Fund invests, under normal circumstances, at least 80% of its assets in equity securities of U.S. and foreign companies. The Fund can invest without limit in foreign securities and can invest in any country, including countries with developing or emerging markets. The normally will invest in at least three countries (one of which may be the US) with at least 40% of its assets invested in countries other than the U.S. However, the Fund may invest at least 30% of its assets outside the U.S. when market conditions are favorable. Typically, the Fund invests in a number of different countries. The Fund is not required to allocate its investments in any set percentages in any particular countries. The Fund may invest in U.S. and foreign companies of any size, including small and mid-capitalization companies.

The "Adviser" (J O Hambro Capital Management Limited) seeks to identify and make investments in U.S. and foreign companies based on a multi-dimensional investment process, considering a number of factors, including growth, valuation, size, momentum, and beta. The Fund utilizes a core style with a modest growth tilt (or “GARP”) over all capitalization ranges. The Fund seeks those stocks, sectors, and countries with positive earnings surprises, sustainably high or increasing return on equity, and attractive valuations.

  • Christopher Lees

    Senior Fund Manager

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  • Nudgem Richyal

    Senior Fund Manager

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Fund details

Data as at 28 February 2023
Fund size $218.37mn
Strategy size $3.55bn
Benchmark MSCI AC World NR
Share classes
Institutional (Launch date) 21-March-2013
Advisor (Launch date) 21-March-2013
Minimum investment
Institutional $1,000,000
Advisor $0
Fund codes
Fund Ticker Share Class Fund Number CUSIP
JOGIX Institutional 382 46653M708
JOGEX Advisor 182 46653M807
Fees and Expenses
Fund Ticker Share Class Net Expense Ratio* Gross Expense Ratio*
JOGIX Institutional 0.98% 0.98%
JOGEX Advisor 1.05% 1.05%

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

Fund ratings

Data as at 28 February 2023
Morningstar Rating Rank
  Rank Percentile Rating
Overall Morningstar Rating™     3-Star
1 year 307/366 82%
3 years 133/309 46% 3-Star
5 years 162/272 63% 3-Star
Morningstar Category World Stock

Morningstar rankings are based on Share class I and on total returns. Past performance does not guarantee future results. © 2022 Morningstar. 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. 

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.  Ratings are for the share class shown only; other classes may vary.  

Administration

Investment Advisor JOHCM (USA) Inc.
Transfer Agent Northern Trust
Custodian Northern Trust

Investment Background

Data as at 28 February 2023

Strategy Highlights

As at 31 December 2022

The portfolio underperformed its benchmark index in Q4, mainly due to our Brazilian financial sector holdings Banco Bradesco and B3, which both fell significantly given the events after the election. We think Brazil is now past the worst and have confidence in our holdings there. Chart Industries was the major individual stock detractor to performance after it surprised us and the market with a large acquisition funded by new debt and new equity, so we are reviewing the stock.

In 2022 we underperformed for 5 main reasons:

1) We got inflation and interest rates wrong, expecting moderate, not near-record rises.

2) This meant we got the valuation wrong for our ‘offence’ high beta growth stocks, especially our technology holdings such as ASML, Lam Research and NVIDIA, which we sold once their earnings revisions peaked or turned negative. Elsewhere, we had too much duration (interest rate risk) in most other sectors and regions, as 2022 was the third fastest rate hike since Arthur Burns in ’72 and Paul Volcker in ’80.

3) We also owned the wrong type of ‘defensive’ low beta stocks, particularly our COVID beneficiary Healthcare holdings such as Avantor, BioNTech and Catalent, which we sold given their fundamental deterioration. Elsewhere, our other traditionally low beta ‘bond proxy type stocks’ did not deliver their previously good downside protection for us.

4) The classic 60/40 asset allocation model broke down, and our equity-only portfolio construction is based on this model. So it stopped working in 2022 as both our offence and defensive stocks both underperformed.

5) We have a growth/momentum style which significantly underperformed the value style in Q4 and 2022. All the above meant we did not deliver our usual ‘relative downside protection’ in 2022.

During the 4th quarter, we purchased high quality economically resilient stocks, given our expectation of a recession, such as Unilever (UK consumer staples), United Health (US healthcare) and Walmart Mexico (Mexican consumer staples). We followed our investment process and weeded out the losers, such as Hong Kong Exchange, Alibaba, Tencent and Prosus. However, these four Chinese stock
sales significantly detracted from performance as they and the whole Chinese equity market subsequently rallied strongly after we had sold them.

We think most equity markets are in a drawn out bottoming process, with risk on/off rotations as inflation and interest rates peak, and equity markets try to look through the probable recession. We see improving relative fundamentals, attractive valuation, and improving relative share price trends in the following neighbourhoods:

  • Quality growth stocks, many of which are already down 30-50%.
  • UK & European global champions plus Japanese exporters
  • Emerging markets domestic consumption stocks
  • China reopening/recovering, both direct and indirect opportunities

But given the Q4 rally and 2023 recession risks we will wait to buy the dips throughout the year.

Our current scenario analysis is 50% bullish and 50% bearish. Short term reasons to be bearish include a recession potentially becoming a financial crisis/contagion. Medium term reasons to be bullish include the Fed regaining credibility with inflation & interest rates stabilising this year.

Scenario 1 = 40% probability of rally led by quality growth stocks. It is probably nearer the end of the bear market for economically resilient quality growth stocks that are already down 30-50% after their 2022 interest rate shock.

Scenario 2 = 10% probability of rally led by cyclical value stocks. It is probably nearer the beginning of the Bear market for these stocks given their recessionary earnings risk, but will the equity market look through this?

Scenario 3 = 50% probability equity market keeps falling. Healthcare is our biggest position relative to benchmark given the sectors positive fundamentals, valuation and trend.

One of our greatest frustrations and disappointments of 2022 was that many of the profitable quality growth stocks we own fell about as much as the unprofitable negative cash flow growth stocks that we do not own. We call the latter ‘Concept Capital’ and think they still have a long way to fall. We are positive about the relative prospects of our profitable quality growth stocks, with low debt-to-equity balance sheets going into the probable 2023 earnings recession - an environment when quality stocks with great balance sheets usually shine (on a relative basis).

 

Sources for all data: JOHCM/Bloomberg (unless otherwise stated).

Total Return (%)

Data as at February 28, 2023
  1 Month Total Return 3 Month Total Return YTD Total Return 1 Year Total Return Cumulative Since Inception
Advisor Shares Net -4.19 -2.77 1.95 -18.79 108.82
Benchmark -4.18 -2.72 1.94 -18.70 110.63

Annualised Return (%)

Data as at December 31, 2022
  1 Year 2 Year 3 Year 4 Year 5 Year 10 Year Annualized Since Inception
Advisor Shares Net -32.91 -8.36 3.86 8.28 4.91 7.61
Benchmark -32.83 -8.27 3.97 8.40 5.02 7.70

Monthly returns (%)

Data as at 28 February 2023
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Fund 2013 1.20 1.58 1.46 -2.30 5.79 -1.39 6.96 3.34 4.05 4.48 27.75
Benchmark 2013 0.73 2.86 -0.27 -2.92 4.79 -2.08 5.17 4.02 1.42 1.73 16.15
Fund 2014 -1.97 7.12 -4.14 -0.99 4.55 3.49 -2.58 4.58 -1.65 -0.51 1.07 -1.46 7.06
Benchmark 2014 -4.00 4.83 0.44 0.95 2.13 1.88 -1.21 2.21 -3.24 0.70 1.67 -1.93 4.16
Fund 2015 1.62 7.08 -0.44 -1.07 3.99 -5.93 0.43 -8.91 -6.30 4.46 -1.37 -0.61 -7.98
Benchmark 2015 -1.56 5.57 -1.55 2.90 -0.13 -2.35 0.87 -6.86 -3.62 7.85 -0.83 -1.80 -2.36
Fund 2016 -3.49 -0.22 4.03 1.34 -0.83 2.38 4.49 -0.83 1.43 -1.58 -3.15 -0.99 2.27
Benchmark 2016 -6.03 -0.69 7.41 1.48 0.13 -0.61 4.31 0.34 0.61 -1.70 0.76 2.16 7.86
Fund 2017 6.65 -1.00 2.29 -0.35 0.98 0.84 4.40 1.78 1.07 3.07 0.43 2.80 25.22
Benchmark 2017 2.73 2.81 1.22 1.56 2.21 0.45 2.79 0.38 1.93 2.08 1.94 1.61 23.96
Fund 2018 7.28 -1.74 -0.31 -0.12 2.62 -1.75 0.93 -0.61 -1.19 -6.59 0.60 -6.21 -7.56
Benchmark 2018 5.64 -4.20 -2.14 0.95 0.12 -0.54 3.02 0.79 0.44 -7.49 1.46 -7.04 -9.42
Fund 2019 7.76 3.08 2.29 1.41 -4.51 7.24 0.53 -1.39 -0.45 0.21 2.85 2.22 22.70
Benchmark 2019 7.90 2.67 1.26 3.38 -5.93 6.55 0.29 -2.37 2.10 2.74 2.44 3.52 26.60
Fund 2020 0.19 -6.91 -10.11 12.13 8.51 2.79 6.74 4.24 -1.32 -1.70 12.18 5.10 33.43
Benchmark 2020 -1.10 -8.08 -13.50 10.71 4.35 3.20 5.29 6.12 -3.22 -2.43 12.33 4.64 16.26
Fund 2021 1.03 3.97 0.73 4.31 -0.20 2.60 2.01 2.45 -4.59 8.07 -1.05 3.86 25.16
Benchmark 2021 -0.45 2.32 2.67 4.37 1.51 1.36 0.69 2.50 -4.13 5.10 -2.41 4.00 18.54
Fund 2022 -12.05 -4.27 1.59 -10.77 1.70 -10.70 5.98 -5.91 -9.49 5.25 6.83 -4.62 -32.91
Benchmark 2022 -4.91 -2.58 2.17 -8.00 0.12 -8.43 6.98 -3.68 -9.57 6.03 7.76 -3.94 -18.37
Fund 2023 6.41 -4.19 1.95
Benchmark 2023 7.17 -2.87 4.10

Expense Ratio (%)

Data as at February 28, 2022
Share Class Gross Expense* Net Expense*
Advisor 1.05% 1.05%
Institutional 0.98% 0.98%

Important Information

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI All Country World Index (ACWI) is a market-capitalization-weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging market countries in North and South American, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars. Indexes mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

Top 10 holdings and active weights

Data as at 28 February 2023
Top 10 holdings
United Rentals 3.25%
Ansys 2.95%
Aptiv 2.69%
Novo Nordisk 2.65%
Linde 2.65%
Boliden 2.64%
Fortescue Metals 2.61%
CNH Industrial N.V.é 2.54%
AGCO 2.50%
Sony 2.47%
Top 10 active weights
United Rentals +3.20%
Ansys +2.90%
Aptiv +2.63%
Boliden +2.62%
Fortescue Metals +2.56%
CNH Industrial N.V.  +2.54%
AGCO +2.50%
TPG +2.47%
Linde +2.35%
Henry Schein +2.33%

Regional / Country breakdown

Data as at 28 February 2023
Portfolio Benchmark Relative
Australia 2.61% 1.99% 0.61%
Brazil 3.65% 0.55% 3.09%
Denmark 4.85% 0.75% 4.09%
Indonesia 2.17% 0.2% 1.96%
Italy 2.32% 0.64% 1.67%
Japan 4.84% 5.47% -0.62%
Mexico 2.29% 0.28% 2%
Sweden 2.64% 0.89% 1.74%
United Kingdom 4.23% 3.92% 0.3%
United States 64.17% 60.24% 3.92%
Cash 4.11% 0% 4.11%

Sector breakdown

Data as at 28 February 2023
Portfolio Benchmark Relative
Health Care 24.32% 12.29% 12.00%
Information Technology 18.41% 21.12% -2.70%
Financials 17.16% 15.39% 1.80%
Industrials 9.91% 10.25% -0.40%
Materials 7.90% 4.97% 2.90%
Consumer Staples 6.20% 7.36% -1.20%
Consumer Discretionary 5.16% 11.03% -5.80%
Energy 2.32% 5.17% -2.90%
Communication Services 2.26% 6.96% -4.70%
Utilities 2.19% 2.87% -0.70%
Real Estate 0.00% 2.53% -2.50%
Cash 4.11% 0.00% 4.11%

Market cap breakdown

Data as at 28 February 2023
Portfolio Benchmark Relative
Large 87.56% 93.41% -5.85%
Mid 8.18% 6.59% 1.58%
Small 0.00% 0.00% 0.00%

Important Information

Fund holdings, sector allocation, regional allocation and top 10 countries are subject to change without notification.

Fund

As at noon Share class Currency CUSIP Number NAV Change Change % Previous
JOHCM International Select Fund 29/03/2023 Institutional USD 46653M849 21.29 0.19 0.90% 21.10
Investor USD 46653M823 21.34 0.19 0.90% 21.15
JOHCM Emerging Markets Opportunities Fund 29/03/2023 Advisor USD 46653M203 10.70 0.17 1.61% 10.53
Institutional USD 46653M104 10.73 0.17 1.61% 10.56
Investor USD 46653M302 10.69 0.16 1.52% 10.53
JOHCM Global Select Fund 29/03/2023 Advisor USD 46653M807 12.49 0.12 0.97% 12.37
Institutional USD 46653M708 12.53 0.12 0.97% 12.41
JOHCM Emerging Markets Small-Mid Cap Equity Fund 29/03/2023 Advisor USD 46653M500 11.57 0.11 0.96% 11.46
Institutional USD 46653M401 11.58 0.11 0.96% 11.47
JOHCM Global Income Builder Fund 29/03/2023 Advisor USD 46653M799 9.73 0.00 0.00% 9.73
Institutional USD 46653M815 9.73 0.00 0.00% 9.73
Investor USD 46653M781 9.73 0.00 0.00% 9.73
JOHCM International Opportunities Fund 29/03/2023 Institutional USD 46653M872 10.59 0.12 1.15% 10.47
JOHCM Credit Income Fund 29/03/2023 Institutional USD 46653M740 8.97 0.00 0.00% 8.97
Regnan Global Equity Impact Solutions 29/03/2023 Institutional USD 46653M716 7.26 0.06 0.83% 7.20
TSW Large Cap Value Fund 29/03/2023 Institutional USD 46653M641 12.44 0.11 0.89% 12.33
TSW High Yield Bond Fund 29/03/2023 Institutional USD 46653M658 8.67 0.03 0.35% 8.64

Important Information

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI All Country World Index (ACWI) is a market-capitalization-weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging market countries in North and South American, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars. Indexes mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

19 Jan 2023

Update: JOHCM International Select Strategy

What Senior Fund Managers Christopher Lees and Nudgem Richyal are most excited about looking into 2023 in a short video presentation.

12 Oct 2022

Q3 Video Update from Christopher Lees, CFA

Christopher addresses the past quarter and shares what he and Nudgem Richyal, CFA, are excited about moving into the new market regime.

    01 Oct 2022

    International Select Fund Quarterly Report

    The fund has started tiptoeing slowly into new “neighborhoods” where we see positive relative fundamentals and valuations, plus stabilizing relative share price trends.

      07 Jul 2022

      Q2 End Update with Christopher Lees, CFA

      "Beware good houses in bad neighborhoods..."

      10 Mar 2022

      International Select - Monthly Report

      Senior Fund Manager, Chris Lees, reviews the Ukraine invasion and his outlook and positioning for the future. 

      17 Mar 2020

      Think like a scientist - but which one and when?

      Updated probability-based scenario analysis from the JOHCM International Select team

      02 Mar 2020

      Coronavirus: indiscriminate selling makes for opportunity

      Thoughts on the coronavirus and the subsequent market correction from the JOHCM International Select Fund team. 

      27 Aug 2019

      Beating the machines - the Global Equity process

      How to beat the investment machines? Chris Lees, manager of the the JOHCM Global Equity Fund, discusses the change in investment process in recent years.

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