Mid Wynd International (MWY) offers investors a portfolio of global equities, with the aim of maximising capital growth. Since 2014, the trust has been run by the Global Select team at Artemis, utilising a thematic approach to portfolio construction. However, in choosing themes and underlying stocks, the team’s preference for sustainability runs all the way through their investment process.
MWY’s portfolio is currently allocated across nine distinct themes, with each one not only having a promising five-year growth trajectory but also including some of the best quality growth companies available. While quality growth often commands a premium, the team retain a strong valuation sensitivity, ensuring the portfolio is not ‘growth at any price’.
Of late, the team have increased the trust’s allocation to theme involving ‘high-quality assets’, which capture companies which are out of favour but still retain all the hallmarks of a high-quality business. One industry which is captured by this is mining, which overlaps with the team’s sophisticated understanding of ESG. As we highlight in our Portfolio and ESG sections, MWY has the prerequisites of a fully ESG-aligned strategy. Yet the team do not look to solely exclude companies with high ESG risk, instead taking a more real-world and practical view of investment opportunities presented by sustainability and governance.
MWY has generated a sound track record of performance under Artemis. Not only does MWY have a long-term track record of outperformance, but the team also demonstrate consistency, having outperformed peer group, benchmark or both in every full calendar year since taking over (see Performance).
In our view MWY continues to offer investors a strong ‘core’ equity exposure. Rosanna Burcheri, one of the three co-managers in the Global Select team, recently announced she is leaving Artemis. However, as the team have always worked in a collaborative manner as regards idea generation and implementation, we understand this will not materially impact the investment process nor the style.
MWY’s approach means it is differentiated from peers through the managers’ incorporation of top-down thematic analysis, but also through flexibility, where the team look to adapt the portfolio to changing market environments rather than be married to a single sector or theme. An example of this is the current overweight towards various themes involving ‘high-quality assets’. As a result, while value stocks have seen substantial recent momentum, MWY has performed well compared to those peers who have purely growth exposures. This approach has given attractive risk/return characteristics over the long term, as evidenced by the five-year Sharpe ratio of 1.04, far in excess of the benchmark’s 0.84 and peers’ 0.81, thanks to MWY’s superior returns and lower volatility.
We believe that investors of all types will find MWY of interest, given the team’s practical approach to ESG. It is clear to us that they have a full understanding of the role ESG plays when investing, both from a negative and positive perspective. While this leads them to incorporate some unconventional sectors in the name of sustainability (e.g. mining), it has also led them to operate a far more rigorous exclusion policy than many of their peers (tourism).
|Sophisticated and holistic approach to ESG integration||Can underperform during a strong value rally|
|Good long-term performance record and risk-adjusted returns||Valuation sensitivity means that MWY may not fully capitalise on growth momentum|
|Adaptable approach to global equity investing, incorporating top-down and bottom-up factors||Investing through thematic allocations can increase sensitivity to specific risk factors|