This time is different

by Salman Ahmed

Last month we announced a new manager for our Global Equity Fund, Aristotle Capital Management. With the portfolio transition now complete, we wanted to provide an update on how the fund is invested.

Clients will notice a near-complete turnover in portfolio holdings. Under Aristotle, the largest investments now include tech giants Microsoft and Samsung, mid-sized German software company Nemetschek, building materials manufacturer Martin Marietta, diagnostics & life sciences leader Danaher, Japanese conglomerate Sony, and American homebuilder Lennar.

As for the industry makeup, the fund now owns more technology (23% of stocks) and consumer cyclicals (14%), and less in financial services (12%) and healthcare (13%) than it did at the end of September. A notable feature of the fund is that it now owns more faster-growing businesses than the previous manager (examples include Adobe, Microchip Technology, and PayPal) alongside a core group of mature, high cash-generating companies (such as Procter & Gamble, Coca-Cola, and GlaxoSmithKline).

U.S. stocks continue to account for roughly half of the portfolio. But like our other managers, Aristotle looks beyond corporate headquarters when assessing a business, and focuses instead on where revenues are generated. Currently, about one-third of aggregate revenues come from each of the U.S., Europe and Asia.

It’s worth noting that these characteristics might change over time. Our managers are continually examining their opportunity set and will buy or sell companies when their outlook or valuation changes.

If you’d like to learn more about the new composition of the fund, we’ve updated the Holdings page on the website with October 31 data which includes industry and geographic breakdowns, and a list of the top 10 holdings. And as always, you can contact one of our Investor Specialists if you have any questions.