Shift to global helps Manchester and London outperform- Manchester and London (MNL) has reported an NAV total return per share of 26.9% (2017’s NAV return was 22.3%). This compares well with the benchmark, which is the MSCI UK Investable Market Index, which posted a NAV of 9.23%. Manchester and London has beaten its benchmark over the three years ending 31 July 2018, on a total return basis, by 67.3%. The discount the shares trade at to their NAV has shrunk over the past year going from11.2% in 2017 to 1% in 2018.
The directors are proposing an additional 8.0 pence per share dividend on top of the 4.0 pence per share interim dividend from May 2018. Which will bring the total dividend per share to 12.0 pence on the year which represents a yield of 2.3% on the share price for the year. In 2017 the yield was 2.4% per share for the year.
The portfolio delivered another year of double digit outperformance of the benchmark. This outperformance is due to their large gains in the technology sector with its four largest holdings Alphabet Inc, Microsoft corporation, Alibaba Group Holdings Ltd and Tencent Holdings Ltd which contributed to majority of their returns. There other holdings consist of NVIDIA Corporation, salesforce.com Inc, Polar Capital Technology Trust plc, Scottish Mortgage Investment Trust PLC, PayPal Holdings Inc, Apple Inc, Adobe Systems Inc, ROBO Global Robotics and Automation GO UCITS ETF, Facebook Inc, Intuit Inc, and Activision Inc. None of these holdings had any material negative contribution to the fund. Manchester and London did increase their exposure in the technology sector to 75% of net assets.
Consumer stocks delivered around 31% of Manchester & London’s NAV total return. Amazon.com Inc was the dominant driver of this return, with the rest of the sector holdings roughly breaking even between them. Other material positive contributors included LVMH Moët Hennessy Louis Vuitton SE and Pernod Ricard SA. The only material negative performer here was JD.com Inc, which they sold.
In healthcare, material positive contributors included Align Technology Inc and Zoetis Inc., while the only material negative performer was GlaxoSmithKline plc, which was sold – they have very little left in this area.
The portfolio does have short positions in the Real Estate and Banking sectors. Other investments now represent around negative 5% of net assets.
MNL-Shift to global helps Manchester and London outperform