Investment Manager’s Commentary
Your Fund returned +4.3% during the month compared to +4.6% for the IA Global (TR) Sector.

The Fund has invested in American Express (‘Amex’) since Troy’s appointment as manager in 2015. In 2020 the investment was increased at favourable prices as credit risks increased and locked-down consumers were prevented from spending on travel and entertainment. In late 2021 and early 2022, with the recovery in full swing, the Fund made substantial reductions to its investment in anticipation of steeper credit losses and an inevitable slowdown in growth. A smaller holding remains a core part of the portfolio.

Amex’s latest results demonstrate consumers’ proclivity to spend so long as unemployment remains low. This is particularly evident amongst Amex’s affluent US consumer base, whose spending grew +15% in total, led by a +30% increase in the purchase volume of Amex’s youngest cohort of card members. These market share gains reveal the ongoing strength and relevance of Amex’s brand and card products. New, younger customers are prized because of Amex’s extremely high customer retention, and the company exercises tight control over operating expenses, providing efficiencies to absorb rising credit loss provisions. Meanwhile, Amex continues to benefit from consumers’ and small businesses’ long-term structural shift to card payments, and we sympathise with the sentiments of Amex’s CFO when he says, ‘We don’t actually worry about recessions at all, because the reality is at some point, and I don’t know if it’s six months from now or six years, there will be a recession. And after that recession, there will be a recovery. And it doesn’t change our view [that] we should be able to steadily grow this company in excess of 10% [a year, over the medium term]’.

Past performance is not a guide to the future. The value of the shares and the income from them can go down as well as up and you may not get back the full amount originally invested. Source: Yealand Fund Services Limited, NAV to NAV in sterling with net income reinvested. Returns are shown net of annual management charge, other expenses and net income reinvested. Returns do not include the effect of initial charges.

Investment Objective and Policy

The Company’s investment objective is to seek to achieve long term (at least 5 years) capital growth with some potential for income.

To achieve the investment objective, the Company’s investment policy is to invest principally (at least 80%) in a portfolio of global equities, and may also invest in other transferable securities, bonds (both corporate and government debt securities), collective investment schemes (“CIS”), warrants, money market instruments, cash, near cash and deposits. The Company may borrow and may enter into underwriting arrangements. It is the ACD’s intention that derivatives and forward currency transactions will only be used for the purposes of efficient portfolio management, including hedging, as defined by the Regulations.

The Company is actively managed and has, with the exception of the above noted minimum, no limit to which it can be invested in each sector or asset type, nor is there any particular geographic focus. The Portfolio Manager has full flexibility to adjust the proportion of the property of the Company depending on their view of market conditions and the assets which it believes are most likely to achieve the Company’s investment objective. From time to time the liquidity of the Company may be increased substantially if judged to be in the interests of investors.

The Company may invest in CIS which have different investment strategies or restrictions than the Company, including the ability to invest in derivatives for investment purposes and to gain exposure to assets which are not expressly listed above. Investment in CIS will usually be limited to those which invest primarily in the assets listed above and without exception, CIS will only be held in so far as the rules permit the Company to gain exposure to the assets held by those CIS.

A Glossary of Definitions which provides definitions to some of the technical language used on this website is available from www.yealand.com/policies.

Comparator Benchmark

To gauge the relative performance of the Fund, Shareholders may compare the Fund’s performance against the Investment Association’s Global Sector. This is not a performance target nor constrains the way in which the Fund is managed. For further information on the Sector and its intended use, please refer to the Fund’s Prospectus.