Tim Crockford
Head of Equity Impact Solutions
Regnan Global Equity Impact Solutions is a high conviction, diversified, global multi-cap portfolio with a strong emphasis on driving impact through engagement. The team aim to generate long-term outperformance by investing in mission-driven companies that create value for investors by providing solutions for the growing unmet sustainability needs of society and the environment. They use the United Nations Sustainable Development Goals (SDGs) as an investment lens.
The investment objective of Regnan Global Equity Impact Solutions (the "Fund") is to seek to achieve long-term capital appreciation by investing in companies that contribute solutions to addressing the world's major social and environmental challenges.
Head of Equity Impact Solutions
Fund Manager
Analyst
Analyst
Fund size | $13.45mn | ||||||||
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Strategy size | $350.88mn () | ||||||||
Fund inception date | 23 August 2021 | ||||||||
Benchmark | MSCI ACWI Investable Market Index | ||||||||
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Fees and Expenses |
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Investment Advisor | JOHCM (USA) Inc. |
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Transfer Agent | Northern Trust |
Custodian | Northern Trust |
Global equity markets finished the first quarter in positive territory, with the US and emerging markets outperforming Europe. There are questions over the direction of the global economy, with the US’s outlook worsening in recent weeks, China’s post-covid performance starting to disappoint and a slowdown in German manufacturing. On the positive side, Latin America and Brazil, in particular, has stood out with strong performance driven by an improving macroeconomic environment, with GDP surprising to the upside.
The strategy outperformed the MSCI ACWI IMI reference index during the period, driven by positive stock selection led by both Brazilian education holdings, YDUQS and Afya. Yduqs, the Brazilian postsecondary education provider, was the largest positive contributor during the quarter, with the stock rallying +181%, driven by strong earnings, which confirmed a recovery in the core on-campus business and with robust guidance provided for Q2. The Ministry of Education’s consultation into a new government scheme to support student loans can potentially be a significant driver for Yduqs and the Brazilian Education sector more broadly. Abcam also performed strongly during the period (+82%), following reports of takeover interest from multiple players, including Danaher and Agilent (also held in the portfolio).
Carl Zeiss, the German provider of ophthalmic and microsurgery solutions, was the largest detractor during the first quarter (-22%) following a profit warning due to a weaker product mix with a lower share of consumables in China and inventory build due to covid lockdowns, as well as confusion on the mid-term outlook commentary from management. Given the company’s attractive positioning in high growth markets and strong pricing power, we remain positive following these near-term issues. Sartorius Stedim was also a detractor (-19%), following a significant cut to its 2023 targets. However, management have reiterated mid-term targets and we believe near term guidance is now sufficiently conservative.
The portfolio’s relative overweighting of small and mid-cap equities, while not an asset allocation decision but a structural bias driven by our strategy to invest in SMID cap companies that can grow into large cap companies over 5-10 years, has been a headwind year to date, driven by liquidity coming out of financial markets. However, small and midcap valuations are now at a level where they are attractive relative to the broader market on any metric. For example, MSCI SMID World is trading at 16.7x next year’s earnings, below the large cap portion of the MSCI World which is at 18.2x. We would expect smaller companies to trade on higher multiples, generally, relative to larger companies to reflect the higher long term growth potential. Relative valuations on a price-to-book basis are around the trough levels reached during the peak of the COVID shock in 2020 and the global financial crises in 2009.
We remain optimistic about the portfolio’s growth profile, given the highly innovative solutions that drive the investment case for each of the businesses we are invested in. This is a portfolio of idiosyncratic opportunities driven by the growth of the product or service at the centre of their businesses rather than short-term cycles, as demand for environmental and social solutions continues unabated. Given the underlying demand for the innovative solutions (of the companies) we are invested in, we expect portfolio company earnings to be resilient relative to the rest of the market, irrespective of whether the expected recession does materialise as a mild or more drawn-out slowdown. We also note that small and mid-caps tend to trough relative to large-caps when economic recessions begin. This makes us confident that the portfolio is well-positioned as we look out further through the year.
1 Month Total Return | 3 Month Total Return | YTD Total Return | 1 Year Total Return | Cumulative Since Inception | |
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Institutional Net | -5.04 | 4.75 | 9.19 | 10.86 | -22.73 |
Benchmark | -2.77 | 6.74 | 14.11 | 13.40 | -3.48 |
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual | ||
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Fund | 2021 | 0.30 | -8.04 | 3.97 | -4.04 | 2.61 | -5.58 | |||||||
Benchmark | 2021 | 1.67 | -3.99 | 4.86 | -2.68 | 3.97 | ||||||||
Benchmark | 2022 | -5.19 | -2.29 | 2.04 | -7.94 | 0.06 | -8.63 | 7.14 | -3.55 | -9.65 | 6.15 | 7.61 | -3.83 | -18.40 |
Fund | 2022 | -12.81 | -2.22 | 1.64 | -10.07 | 1.69 | -9.99 | 10.39 | -6.22 | -10.09 | 8.96 | 6.77 | -2.93 | -25.04 |
Fund | 2023 | 6.22 | -2.93 | 1.65 | 0.27 | -0.81 | 7.46 | 2.65 | -5.04 | 9.19 | ||||
Benchmark | 2023 | 7.28 | -2.87 | 2.41 | 1.04 | -1.10 | 5.85 | 3.78 | -2.77 | 14.11 |
Abcam | 5.51% |
Aixtron | 5.44% |
Novo Nordisk | 4.94% |
Xylem | 4.87% |
Ansys | 4.82% |
Ecolab | 4.76% |
Qiagen | 4.75% |
YDUQS | 4.70% |
Stevanato Group | 4.51% |
Bank Rakyat Indonesia | 4.48% |
Abcam | +5.51% |
Aixtron | +5.44% |
Xylem | +4.83% |
Ansys | +4.78% |
Qiagen | +4.74% |
YDUQS | +4.70% |
Ecolab | +4.70% |
Novo Nordisk | +4.52% |
Stevanato Group | +4.51% |
Bank Rakyat Indonesia | +4.44% |
Portfolio | Benchmark | Relative | ||
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Brazil | 8.80% | 0.57% | 8.23% | |
Denmark | 7.86% | 0.76% | 7.1% | |
France | 4.05% | 2.75% | 1.29% | |
Germany | 16.99% | 1.99% | 15% | |
Indonesia | 4.48% | 0.21% | 4.26% | |
Italy | 4.51% | 0.68% | 3.82% | |
Japan | 4.14% | 6.02% | -1.87% | |
Switzerland | 4.23% | 2.33% | 1.9% | |
United Kingdom | 8.31% | 3.64% | 4.67% | |
United States | 22.40% | 61.36% | -38.95% | |
Cash | 2.01% | 0% | 2.01% |
Portfolio | Benchmark | Relative | ||
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Health Care | 34.24% | 11.56% | 22.60% | |
Industrials | 19.09% | 11.48% | 7.60% | |
Information Technology | 18.68% | 20.98% | -2.30% | |
Consumer Discretionary | 10.68% | 11.48% | -0.80% | |
Materials | 6.89% | 4.91% | 2.00% | |
Financials | 5.45% | 15.23% | -9.70% | |
Utilities | 2.91% | 2.64% | 0.30% | |
Communication Services | 0.00% | 6.99% | -7.00% | |
Consumer Staples | 0.00% | 6.91% | -6.90% | |
Energy | 0.00% | 4.85% | -4.90% | |
Real Estate | 0.00% | 2.92% | -2.90% | |
Cash | 2.01% | 0.00% | 2.01% |
Portfolio | Benchmark | Relative | ||
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Large | 36.71% | 75.19% | -6.75% | |
Mid | 59.41% | 23.40% | 36.01% | |
Small | 2.00% | 1.41% | 0.59% |
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 |
Quarterly Impact Report Q2 2022
The latest quarterly impact report features thematic research on Liquid Biopsy – a promising alternative to traditional tissue-based biopsies.
Should investors stick to large-cap, which has served many so well, or are is now the time to take a fresh look at small and mid-caps?
An investor should consider the Fund’s investment objectives, risks, and charges and expenses carefully before investing or sending any money. This and other important information about the Funds can be found in the Fund’s(s) prospectus or summary prospectus which can be obtained at www.johcm.com or by calling 866-260-9549 or 312-557-5913. Please read the prospectus or summary prospectus carefully before investing. The JOHCM Funds are advised by JOHCM (USA) Inc. and distributed through JOHCM Funds Distributors, LLC, member FINRA. The JOHCM Funds are not FDIC-insured, may lose value, and have no bank guarantee.
The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Investing in companies in emerging markets involves higher risk than investing in established economies or securities markets. Emerging Markets may have less stable legal and political systems, which could affect the safe-keeping or value of assets. The Fund’s 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 Fund intends to invest its assets in companies that meet its impact investing criteria pursuant to the Regnan Taxonomy. This may affect the Fund’s exposure to certain companies or industries and the Fund will forego certain investment opportunities. The Fund’s results may be lower than other funds that do not seek to invest in companies based on expected environmental or societal impact outcomes. Successful application of the Fund’s impact investing strategy will depend on its portfolio managers’ ability to identify and analyze a company’s impact, and there can be no assurance that the strategy or techniques employed will be successful.
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