287. The ‘Cashflow Champions’ of Europe

11/02/23 • 14 min

Samantha Gleave, co-manager of Liontrust European Dynamic, discusses the fund's investment process, including how a company can qualify for its 'cashflow champions' watch list. The interview also touches on the importance of the macroeconomic environment, concerns related to energy prices, the impact of recession in Germany and why the fund is tilting towards value. She concludes with a balanced outlook on European equities, while also highlighting opportunities at the stock level in names likes Novo Nordisk, Inditex and Partners Group.

What’s covered in this episode:

What is the Cashflow Solutions process?
Why the fund is tilting towards value
Are there concerns about Europe’s gas supply this year?
Will Germany bounce back from recession quickly?
Does the team prefer one country over the other in Europe?
The strong momentum of Inditex
The investment case for private equity business Partners Group
Outlook for European equities in 2024
The importance of positive stock news, highlighting Novo Nordisk

More about the fund:

The Liontrust European Dynamic fund is a concentrated portfolio with 30-40 holdings, emphasising robust cash flows as the primary driver of returns from European companies. Its exceptional long-term performance is attributed to a collaborative, rigorous process and a flexible investment style that can pivot between value and growth based on market opportunities.

Learn more on fundcalibre.com
Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.

What’s covered in this episode:

What is the Cashflow Solutions process?
Why the fund is tilting towards value
Are there concerns about Europe’s gas supply this year?
Will Germany bounce back from recession quickly?
Does the team prefer one country over the other in Europe?
The strong momentum of Inditex
The investment case for private equity business Partners Group
Outlook for European equities in 2024
The importance of positive stock news, highlighting Novo Nordisk

More about the fund:

Previous Episode

286. Will 2024 be the year of the polarised recession?

Dr. Niall O’Connor, manager of SVS Brooks Macdonald Defensive Capital, gives a comprehensive overview of the financial landscape for investors, including the role of inflation, interest rates, asset valuations across various markets and, ultimately, where there may be opportunities. We delve into the dynamics of investment trusts - including the substantial discounts some are trading at - with Niall highlighting the potential for mergers and acquisitions in this space. We finish with Niall giving his outlook for 2024 and the polarised nature of a potential recession in the UK.

What’s covered in this episode:

Will the Bank of England raise target inflation to 4%
Have interest rates peaked
The lag in monetary policy
How UK mortgages will be impacted in 2024
The discounts available on investment trusts
M&A activity in the UK, starting with Round Hill Music
Will US private equity investors start buying out UK investment trusts?
The appeal of student accommodation and how it differs from commercial property
Why government bonds are actually offering negative real rates
The appeal of short dated index-linked gilts
How the managers targets yield in the fund
Why recession will be very polarised in the UK ...and some may not even feel it
UK and US valuations as we head into 2024

More about the fund:

Long-term capital growth and protection is the objective of this defensive, multi-asset fund. A key feature is that investments often do not require market growth to provide a positive total return and are supported by having significant underlying asset cover. Niall uses the range of tools available to him to dial up or dial down the fund’s sensitivity to market movements, which results in an intelligent investment mix that will see investors through a range of market conditions.

Next Episode

288. Virus resistant pigs, Amazon TV deals and why the UK is so compelling

Murray Income manager Charles Luke highlights a trio of reasons why the UK market looks compelling at present, while also discussing the importance of focusing on quality companies when there is so much noise. We delve deeper into some of the companies in his portfolio, including a genetics company working on virus resistant pigs and a familiar FTSE 250 name that is set to benefit from an Amazon film and TV series. We also discuss the benefits of a strategy combining quality and income and why having some international exposure is important for the trust.

What’s covered in this episode:

The international makeup of UK companies
Attractiveness of UK valuations
Dividend cover in the UK
50 years of dividend growth for the trust
The importance of focusing on companies over noise
M&A activity in the trust
The potential of Games Workshop
Genetics company Genus and virus resistant pigs
How the trust uses international companies in the portfolio
Why “quality income” now

More about the trust:

Backed by a strong UK equities team, Murray Income Trust is all about building a portfolio of 30-70 high quality companies which deliver a resilient income, as well as offering strong capital growth prospects. The trust is conservatively managed and targets resilient companies which can thrive in any economic scenario. The result is a dependable, diversified and differentiated trust, which has delivered consistently strong performance at a time when it has been challenging for UK equities.