Investment Manager’s Commentary

Payments companies have represented a significant and successful area of investment for the Fund for many years. Visa and Mastercard are among the top five holdings, having been held since 2016 and 2019 respectively. Shares in Visa have lagged the market recently due to several concerns. The transition from cash to card payments is maturing in many developed countries, including in the United States, at a time when doubts exist about Visa’s newer sources of value-added service revenue that do not entirely depend on the progress of payment volumes. Legal and regulatory uncertainties have also grown in the last couple of years to weigh on investor sentiment. Visa’s latest results were poorly received because into this mix comes evidence for a cyclical slowdown in US consumer spending.

Despite these pressures we remain optimistic about the opportunity for Visa, and we see the shares as representing good value today. There is still considerable scope for card volume growth in core consumer payments, particularly in Europe and emerging markets, and in cross-border e-commerce and travel flows. Beyond this, Visa has demonstrated its vast potential to penetrate previously untapped commercial and business-to-consumer payments. Technological changes continue to digitise banking and remove friction from the payments experience. Improvements in security and authentication are important opportunities for Visa. Value-added services are set to continue their strong growth by enriching switched transactions for card issuers and merchants with an array of risk, identity, and analytics solutions.

Visa is one of the most profitable companies within the Fund and high margins are sustained whilst maintaining a consistent track record for innovation and growth. With the shares attractively valued when compared to their longer-term history, the Fund’s investment in Visa continues to be a core holding.

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.