Investing in health and technology stocks pays dividends

By: Stonehage Fleming Global

Investing in health and technology stocks pays dividends for Stonehage Fleming’s flagship fund as it passes its 5th anniversary  

Following the fifth anniversary of the launch of the Stonehage Fleming Global Best Ideas Equity Fund in August, its manager Gerrit Smit continues to see opportunities in global businesses, especially in the health and technology sectors.

Since launching in August 2013, the US$882.0m Fund has attracted assets from private, professional and institutional investors. It has returned 67.7% (+10.9% p.a.)* over the last five years, compared to the Lipper Global Equity peer group average of 41.1 % (+7.1% p.a.)**, and MSCI World’s +58.7% (+9.7% p.a.)***.

The healthcare exposures include Zoetis (animal drugs), Becton Dickinson (injection needles) and kidney dialysis business Fresenius SE.

Technology stocks now make up 32.7%**** of the Fund and current investments include some of the world’s best known franchises, including Visa, Alphabet (Google), PayPal, Tencent (including mobile chat service WeChat) and Microsoft.

Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 25 businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value. The portfolio has very low turnover: over the past 12 months Gerrit has only sold two positions to introduce two new ones.

Other investments include strong brands such as Nike, Estée Lauder and AIA.

Gerrit Smit, Fund Manager and Head of Equities, Stonehage Fleming said:

“Despite some fears that stocks may have become expensive, I continue to see opportunities specifically in the health and technology sectors and we recently chose to add Microsoft to the portfolio. We are interested in businesses with a clear long-term strategy and a focus on productivity.

“Five years on we remain committed to our core philosophy that owning quality businesses at an attractive valuation is a good solution to protect and grow one’s wealth. Along with this, a good business remains a good business irrespective of potential short-term tactical setbacks in its share price. High conviction in quality companies will provide investors with long-term sustainable returns and enable them to ride out short term market volatility.”

This quality strategy had previously been available exclusively to High Net Worth clients of Stonehage Fleming but has been open to outside investors since 2013 with the launch of the Fund. It is now available on eight platforms, across the UK and South Africa, with more in process. It is locally available on the Allan Gray International, Glacier International and Old Mutual International platforms.