Regnan Global Equity Impact Solutions (REGIX)

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Fund Description

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.

Investment Objective

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.

  • Tim Crockford

    Head of Equity Impact Solutions

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  • Mohsin Ahmad

    Fund Manager

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  • Maxime Le Floch

    Analyst

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  • Maxine Wille

    Analyst

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Fund details

Data as at 31 October 2022
Fund size $8.02mn
Strategy size $325.40mn ()
Fund inception date 23 August 2021
Benchmark MSCI ACWI Investable Market Index
Share classes
Institutional (Launch date) 23-August-2021
Minimum investment
Institutional $1,000,000
Fund codes
Fund Ticker Share Class Fund Number CUSIP
REGIX Institutional 689 46653M716
Fees and Expenses
Fund Ticker Share Class Net Expense Ratio* Gross Expense Ratio*
REGIX Institutional 0.89% 7.10%

JOHCM (USA) Inc. (the "Adviser") has contractually agreed to waive fees and reimburse expenses to the extent that Total Annual Operating Expenses (excluding brokerage costs, interest, taxes, dividends, litigation and indemnification expenses, expenses associated with investment in underlying investment companies, and extraordinary expenses) exceed 0.89%, 0.99%, 1.14% and 0.89% for Institutional Shares, Advisor Shares, Investor Shares and Class Z Shares, respectively, until January 28, 2023.

Administration

Investment manager J O Hambro Capital Management Limited
Transfer agent and registrar Northern Trust
Custodian Northern Trust

Strategy Highlights

As at 30 September 2022

After a brief bear-market rally into the start of the summer, the August Federal Reserve meeting saw this quickly unfold; volatility remained the order of the day in Q2, with index measures such as VIX – that reflects implied volatility of the S&P 500 – ending the quarter marginally higher than at the start.

The strategy proved to be slightly more defensive than the index during the same period, declining less than the MSCI ACWI IMI reference index that is used to measure relative returns on a rolling five-year basis.

While the portfolio has been negatively impacted by rising real yields, as terminal central bank policy rates have been revised higher over the course of this year, continued strong fundamental momentum for the majority of the names in the portfolio has made our holdings even more attractive.

Orsted was the largest detractor during the third quarter, as one of four of the thirty holdings who reported disappointing earnings for the first half of this year, which were largely impacted by temporary energy price hedging losses, which the company has guided will unwind over the course of the next few quarters. Fundamentally, Orsted is not being given any credit for project returns on their pipeline that could end up being substantially higher than is currently priced into the implied forecasts for the business.

Hannon Armstrong Sustainable Infrastructure was next up on the detractor list, and the team divested out of this position due to concerns around the lack of transparency around its accounting practices that were called into question during the period. These concerns have the potential to raise the company’s cost of capital further, in an environment when the company is already facing rising financing costs from higher interest rates, and the team no longer have the required conviction in their underlying cash flow expectations.

Conversely, the positive contributors more than compensated for the disappointments.

Afya was the largest contributor during the quarter. Afya benefitted from positive reports from several shareholders and brokers reacting to Q2 results that beat expectations, driving earnings upgrades through the quarter, as well as improved sentiment towards Brazilian companies.

Xylem had a good quarter, bolstered by expectation-beating results and a guidance-raise driven by measures that the company had taken to combat input cost inflation earlier on in the year, and improving supply of semiconductors that are critical to their smart water meters.

These are just two examples of portfolio companies that continue to see improving earnings momentum in an absolute sense, which is even stronger relative to the broad reference index that is seeing momentum turn in the opposite direction. While we do not expect the portfolio to be totally immune in a recessionary environment, we do believe that it will prove relatively more resilient.

This is largely due to the allocation of around 35% of the portfolio to Healthcare, which mainly comprises life sciences and medical technology companies; these are able to achieve double-digit growth rates not hugely reliant on the broader economic cycle, but driven by structural trends that are only just starting to accelerate.

While it is natural to see investment horizons shortened amid higher volatility, we will persist with our long-term view and patience; this is when the best opportunities typically present themselves as investors give too much importance to the near-term forecasts, when over 80% of the equity value typically resides in the later terminal forecast period, where cash flow growth rates are generally faded downwards.

This is not what we expect to transpire for this concentrated collection of holdings that are transforming our economic systems. We expect these companies to continue to realise earnings substantially ahead of today’s market expectations, for years to come, driving compounding growth and rewarding patience. Today’s portfolio valuations have become too attractive to ignore.

Total Return (%)

Data as at October 31, 2022
  1 Month Total Return 3 Month Total Return YTD Total Return 1 Year Total Return Cumulative Since Inception
Institutional Net 8.93 -8.08 -27.65 -28.78 -31.70
Benchmark 6.22 -7.46 -21.14 -20.13 -18.32

Monthly returns (%)

Data as at 31 October 2022
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Fund 2021 0.30 -8.08 4.01 -4.07 2.61 -5.58
Benchmark 2021 1.67 -4.06 4.89 -2.59 4.09
Fund 2022 -12.81 -2.22 1.64 -10.02 1.63 -9.89 10.24 -6.19 -10.04 8.93 -27.65
Benchmark 2022 -5.18 -2.39 2.01 -7.86 -0.04 -8.66 7.22 -3.51 -9.60 6.22 -21.14

Top 10 holdings and active weights

Data as at 31 October 2022
Top 10 holdings
Agilent 5.89%
Novo Nordisk 5.52%
Qiagen 5.50%
Evoqua 5.10%
PTC 4.95%
Xylem 4.90%
Sartorius 4.86%
ATS Automation Tooling Systems 4.53%
Lonza 4.52%
Alfen 4.49%
Top 10 active weights
Agilent +5.83%
Qiagen +5.49%
Novo Nordisk +5.23%
Evoqua +5.09%
PTC +4.93%
Xylem +4.87%
Sartorius +4.84%
ATS Automation Tooling Systems +4.52%
Alfen +4.49%
Lonza +4.45%

Regional / Country breakdown

Data as at 31 October 2022
Portfolio Benchmark Relative
Brazil 8.03% 0.68% 7.35%
Canada 4.53% 3.2% 1.32%
Denmark 9.35% 0.64% 8.71%
France 6.76% 2.57% 4.19%
Germany 11.93% 1.8% 10.12%
Indonesia 4.42% 0.24% 4.18%
Netherlands 4.49% 0.92% 3.56%
Switzerland 4.52% 2.35% 2.16%
United Kingdom 7.53% 3.79% 3.73%
United States 27.67% 62.05% -34.38%
Cash 3.08% 0% 3.08%

Sector breakdown

Data as at 31 October 2022
Portfolio Benchmark Relative
Health Care 34.94% 12.89% 22.00%
Industrials 24.77% 10.87% 13.90%
Information Technology 12.67% 19.78% -7.10%
Consumer Discretionary 9.78% 10.99% -1.20%
Financials 5.82% 14.77% -9.00%
Materials 4.80% 5.03% -0.20%
Utilities 3.82% 3.04% 0.80%
Real Estate 0.27% 3.21% -2.90%
Communication Services 0.00% 6.35% -6.40%
Consumer Staples 0.00% 7.26% -7.30%
Energy 0.00% 5.75% -5.80%
Cash 3.08% 0.00% 3.08%

Market cap breakdown

Data as at 31 October 2022
Portfolio Benchmark Relative
Large 31.66% 72.52% 0.76%
Mid 59.42% 25.74% 33.68%
Small 5.51% 1.74% 3.77%

Fund

As at noon Share class Currency CUSIP Number NAV Change Change % Previous
JOHCM International Select Fund 02/12/2022 Institutional USD 46653M849 21.05 -0.07 -0.33% 21.12
Investor USD 46653M823 21.03 -0.08 -0.38% 21.11
JOHCM Emerging Markets Opportunities Fund 02/12/2022 Advisor USD 46653M203 10.68 -0.01 -0.09% 10.69
Institutional USD 46653M104 10.71 -0.01 -0.09% 10.72
Investor USD 46653M302 10.68 -0.01 -0.09% 10.69
JOHCM Global Select Fund 02/12/2022 Advisor USD 46653M807 14.14 -0.01 -0.07% 14.15
Institutional USD 46653M708 14.19 -0.02 -0.14% 14.21
JOHCM Emerging Markets Small-Mid Cap Equity Fund 02/12/2022 Advisor USD 46653M500 11.41 0.04 0.35% 11.37
Institutional USD 46653M401 11.42 0.04 0.35% 11.38
JOHCM Global Income Builder Fund 02/12/2022 Advisor USD 46653M799 9.85 -0.02 -0.20% 9.87
Institutional USD 46653M815 9.85 -0.03 -0.30% 9.88
Investor USD 46653M781 9.84 -0.03 -0.30% 9.87
JOHCM International Opportunities Fund 02/12/2022 Institutional USD 46653M872 10.20 0.02 0.20% 10.18
JOHCM Credit Income Fund 02/12/2022 Institutional USD 46653M740 8.93 0.00 0.00% 8.93
Regnan Global Equity Impact Solutions 02/12/2022 Institutional USD 46653M716 7.44 -0.01 -0.13% 7.45
TSW Large Cap Value Fund 02/12/2022 Institutional USD 46653M641 14.74 0.04 0.27% 14.70
TSW High Yield Bond Fund 02/12/2022 Institutional USD 46653M658 8.67 0.01 0.12% 8.66
10 Nov 2022

Regnan Global Equity Impact Solutions Strategy

Quarterly Impact Report Q2 2022

21 Feb 2022

Q4 Quarterly Impact Report - Regnan Global Equity Impact Solutions

The latest quarterly impact report features thematic research on Liquid Biopsy – a promising alternative to traditional tissue-based biopsies.

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Prospectus

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 J O Hambro Capital Management Limited and distributed through Foreside Financial Services, LLC, member FINRA. The JOHCM Funds are not FDIC-insured, may lose value, and have no bank guarantee.

Risks

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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