JOHCM International Opportunities Fund (JOPSX)

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Fund Description

The JOHCM International Opportunities Fund is managed by Ben Leyland, senior fund manager, and Robert Lancastle, fund manager, supported by dedicated analyst Jasmeet Munday. The team seeks to generate high risk-adjusted returns with volatility below that of the broad market by focusing on high-quality, cash-flow-generative companies. They blend the best of quality investing with the best of value investing in order to avoid the two major sources of capital destruction at market turning points: overvaluation and overleverage. They prioritize businesses with strong franchises, strong balance sheets and the ability to create shareholder value by reinvesting in areas of competitive advantage, but they only commit capital where they see a favorable risk/reward ratio, i.e., limited downside and substantial upside on a 3- to 5-year horizon. They emphasize absolute rather than relative returns and are prepared to hold up to 20% cash in the fund when valuations are unattractive.

Investment Strategy

The team aims to deliver above-average risk-adjusted equity returns over the medium term. They believe this is best achieved by investing in a concentrated, unconstrained portfolio of attractively valued compound growth companies. They prioritize companies that are able to reliably generate cash flow and reinvest it at high marginal returns in order to grow their intrinsic value. As a result, the companies become more valuable over time. 

Investment Objective

The investment objective of the JOHCM International Opportunities Fund is to achieve long-term total return by investing in a concentrated portfolio of international equity securities. The Fund invests, under normal market conditions, primarily in equity securities of companies headquartered outside the U.S., including those in emerging markets. The Fund may invest in foreign companies of any size, including small- and mid-capitalization companies, in order to achieve its objective. Equity securities include common and preferred stocks, rights and warrants. The Fund may also invest in equity related instruments, such as equity linked notes and participation notes, all of which derive their value from equities. Equity linked notes and participation notes will be securitized, freely transferable and the Fund will not be leveraged as a result of investing in them. The portfolio typically contains 25 to 40 stocks,* with position sizes of 2% to 5%. The Fund is benchmarked against the MSCI EAFE Index, but their process is benchmark-agnostic: The team aims to cluster exposure around particularly attractive areas and have zero exposure to overleveraged or overvalued areas of the market. The process is biased toward larger-cap (>$5 billion) multinationals listed in developed markets.
*The number of stocks in the portfolio will be fewer than 50.

  • Ben Leyland

    Senior Fund Manager

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  • Robert Lancastle

    Senior Fund Manager

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  • Jasmeet Munday

    Analyst

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An introduction to the JOHCM International Opportunities Fund

Other International Equity Funds

JOHCM International Select Fund (JOHIX)

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 intuitive “4-Dimensional” investment process (stocks, sectors, countries, time/change) focuses on the be...

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Fund details

Data as at 31 August 2023
Fund size $2.02mn
Benchmark MSCI EAFE Index
Share classes
Institutional (Launch date) 30-September-2016
Minimum investment
Institutional $1,000,000
Fund codes
Fund Ticker Share Class Fund Number CUSIP
JOPSX Institutional 46653M872
Fees and Expenses
Fund Ticker Share Class Net Expense Ratio* Gross Expense Ratio*
JOPSX Institutional 0.88% 1.93%

*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 31 August 2023
Morningstar Rating Rank
  Rank Percentile Rating
Overall Morningstar Rating™     5-Star
1 year 1/730 1% 2-Star
3 years 79/678 13% 4-Star
5 years 63/616 10% 5-Star

Administration

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

Investment Background

Data as at 31 August 2023

Strategy Highlights

As at 28 July 2023

Equity markets were strong overall in Q2, and volatility fell further, but under the surface there were some notable rotations. As in Q1, the vast majority of index performance came from technology and related sectors, which rallied powerfully in May, when Nvidia’s first-quarter report and guidance was the catalyst for renewed excitement about Artificial Intelligence. For the index as a whole, most of the increase came in the final month, as most other sectors recovered somewhat after a weak May, although in the context of a falling oil price, rising US yields and an increasingly inverted US yield curve, resources and most of the ‘bond proxy’ sectors were still down over the three months.

A large proportion of the fund’s marginal outperformance during the quarter, especially in May, is explained by our relative underexposure to technology. Many of our holdings in the healthcare, utilities and financials sectors were weak, and we used this as an opportunity to top up weights in names such as Deutsche Boerse. On the other hand, we benefitted from strong performance in CRH, Cameco and Komatsu.

We continue to be overweight in the utilities and consumer staples sectors. It is important to note that this is not simply defensive positioning due to a negative short-term macroeconomic view. Bear in mind, we are also overweight in the energy and industrials sectors. The reason we own names like Philip Morris and Heineken is because we believe their growth potential is underappreciated and, therefore, attractively valued at present. Merck and LG Household also contributed negatively to the portfolio this quarter. In 2021 we talked a lot about the emergence of a ‘forgotten middle’ of high-quality companies with strong multi-year growth potential, generally outside the technology sector and, in many cases, with more idiosyncratic than thematic growth drivers. They were ignored in the stampede towards tech-focused ‘lockdown winners’ during Covid, and it is happening again. While everyone else seems to have been reading research notes about how AI is going to transform various sectors and companies, we have been reading about the ongoing nuclear renaissance, the improving corporate governance at various Japanese and Emerging Market companies, and attending investor days with companies like Sanofi and Shell.

 

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

Total Return (%)

Data as at August 31, 2023
  1 Month Total Return 3 Month Total Return YTD Total Return 1 Year Total Return Cumulative Since Inception
Institutional Shares Net -2.37 5.71 11.56 25.24 51.50
Benchmark -3.83 3.80 10.87 17.92 48.14

Annualised Return (%)

Data as at June 30, 2023
  1 Year 2 Year 3 Year 4 Year 5 Year 10 Year Annualized Since Inception
Institutional Shares Net 25.20 2.48 10.14 6.44 5.95 6.29
Benchmark 18.77 -1.17 8.93 5.23 4.39 6.11

Monthly returns (%)

Data as at 31 August 2023
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Fund 2016 -0.24 -3.28 -2.60 2.01 -4.13
Benchmark 2016 -0.29 -2.05 -1.99 3.42
Fund 2017 0.85 1.95 1.91 2.88 5.22 -0.99 2.18 1.26 1.32 0.71 -0.15 -0.18 18.17
Benchmark 2017 2.90 1.43 2.75 2.54 3.67 -0.18 2.88 -0.04 2.49 1.52 1.05 1.61 25.02
Fund 2018 1.56 -3.12 1.58 1.23 -1.02 -0.34 1.09 -0.66 1.23 -6.16 1.00 -3.88 -7.58
Benchmark 2018 5.02 -4.51 -1.80 2.28 -2.25 -1.22 2.46 -1.93 0.87 -7.96 -0.13 -4.85 -13.79
Fund 2019 5.08 2.00 1.63 2.83 -4.76 5.27 -2.07 -0.74 1.93 2.75 0.40 2.92 18.15
Benchmark 2019 6.57 2.55 0.63 2.81 -4.80 5.93 -1.27 -2.59 2.87 3.59 1.13 3.25 22.01
Fund 2020 -0.92 -6.55 -11.34 3.46 5.38 2.02 4.34 2.42 -2.90 -4.26 15.23 3.50 8.20
Benchmark 2020 -2.09 -9.04 -13.35 6.46 4.35 3.40 2.33 5.14 -2.60 -3.99 15.50 4.65 7.82
Fund 2021 -1.67 1.78 2.54 4.30 2.35 -1.98 -0.20 0.11 -5.77 2.16 -6.63 5.79 2.02
Benchmark 2021 -1.07 2.24 2.30 3.01 3.59 -1.44 0.75 1.76 -2.90 2.46 -4.65 5.12 11.26
Fund 2022 0.11 -0.83 -3.04 -1.97 2.22 -8.45 6.10 -5.49 -8.09 7.25 12.79 0.99 -0.59
Benchmark 2022 -4.83 -1.77 0.64 -6.47 0.75 -9.28 4.98 -4.75 -9.35 5.38 11.26 0.08 -14.45
Fund 2023 7.54 -1.68 2.00 2.05 -4.11 5.33 2.80 -2.37 11.56
Benchmark 2023 8.10 -2.09 2.48 2.82 -4.23 4.55 3.24 -3.83 10.87

Expense Ratio (%)

Data as at February 28, 2022
Share Class Gross Expense* Net Expense*
Institutional 1.93% 0.88%

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 EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

 

*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 31 August 2023
Top 10 holdings
Northern Institutional Treasury Portfolio 4.61%
Sanofi 4.42%
Merck KGaA 4.31%
CRH 4.31%
Shellé 3.90%
Deutsche Bérse 3.79%
Compass Group 3.72%
Thales Group 3.71%
Heineken 3.65%
Roche 3.50%
Top 10 active weights
Northern Institutional Treasury Portfolio +4.61%
Merck KGaA +4.16%
CRH +4.04%
Sanofi +3.63%
Thales Group +3.61%
Heineken +3.59%
Deutsche Börse +3.57%
Compass Group +3.43%
B&M European Value Retail +3.39%
Philip Morris International +3.01%

Regional / Country breakdown

Data as at 31 August 2023
Portfolio Benchmark Relative
Canada 5.96% 0% 5.96%
France 15.39% 12.25% 3.13%
Germany 12.64% 8.5% 4.14%
Ireland 4.31% 0.84% 3.46%
Japan 15.20% 22.79% -7.59%
Netherlands 5.31% 4.46% 0.84%
Sweden 4.10% 3.02% 1.07%
Switzerland 3.50% 10.1% -6.6%
United Kingdom 16.01% 14.62% 1.39%
United States 7.63% 0% 7.63%

Sector breakdown

Data as at 31 August 2023
Portfolio Benchmark Relative
Financials 18.75% 18.66% 0.10%
Industrials 15.90% 16.12% -0.20%
Health Care 12.24% 13.40% -1.20%
Consumer Discretionary 12.16% 12.23% 0.00%
Consumer Staples 12.05% 9.98% 2.10%
Energy 11.33% 4.42% 6.90%
Communication Services 6.26% 4.04% 2.30%
Materials 5.47% 7.45% -2.00%
Utilities 3.70% 3.42% 0.30%
Information Technology 2.20% 8.05% -5.90%
Real Estate 0.00% 2.17% -2.20%
Cash -0.10% 0.00% -0.10%

Market cap breakdown

Data as at 31 August 2023
Portfolio Benchmark Relative
<10BN 18.40% 10.50% 7.89%
>10BN 76.85% 89.50% -12.64%

Fund

As at noon Share class Currency CUSIP Number NAV Change Change % Previous
JOHCM International Select Fund 03/10/2023 Institutional USD 46653M849 20.85 -0.29 -1.37% 21.14
Investor USD 46653M823 20.87 -0.29 -1.37% 21.16
JOHCM Emerging Markets Opportunities Fund 03/10/2023 Advisor USD 46653M203 10.18 -0.13 -1.26% 10.31
Institutional USD 46653M104 10.21 -0.13 -1.26% 10.34
Investor USD 46653M302 10.16 -0.14 -1.36% 10.30
JOHCM Global Select Fund 03/10/2023 Advisor USD 46653M807 12.00 -0.20 -1.64% 12.20
Institutional USD 46653M708 12.04 -0.21 -1.71% 12.25
JOHCM Emerging Markets Small-Mid Cap Equity Fund 03/10/2023 Advisor USD 46653M500 12.47 -0.10 -0.80% 12.57
Institutional USD 46653M401 12.48 -0.10 -0.79% 12.58
JOHCM International Opportunities Fund 03/10/2023 Institutional USD 46653M872 10.58 -0.10 -0.94% 10.68
Regnan Global Equity Impact Solutions 03/10/2023 Institutional USD 46653M716 6.91 -0.11 -1.57% 7.02
TSW Large Cap Value Fund 03/10/2023 Institutional USD 46653M641 12.42 -0.10 -0.80% 12.52
TSW High Yield Bond Fund 03/10/2023 Institutional USD 46653M658 8.62 -0.05 -0.58% 8.67

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 EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

 

*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.

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