Martin Currie Global Portfolio 13 April 2022

Martin Currie Global Portfolio (MNP) offers investors a highly concentrated, low-turnover approach to global quality-growth investing. The trust is managed by Zehrid Osmani, whose portfolio continues to be underpinned by what he believes are the most promising megatrends present within global economies, such as resource scarcity and demographic changes. Zehrid believes in turn that his companies should be able to demonstrate superior long-term growth trajectories, given the huge opportunities these megatrends represent. However, Zehrid will also ensure that each company has all the hallmarks of a high-quality business, so as to avoid the speculative end of the market, a process we outline further in the Portfolio section.

As we point out under Performance, MNP has seen a recent period of underperformance against wider markets due to the rapid rise in inflation as well as the crisis in Ukraine, which has created a risk-off environment and disproportionately impacted growth stocks. However, Zehrid tells us the long-term investment case for his holdings have not been impacted by this, and so he has made few changes to his portfolio.

Zehrid’s confidence is due to both his granular understanding of portfolio risk and his conservative valuation approach, which allow him to ensure he is well positioned for an increasingly risky environment. He also maintains this confidence through market cycles, and is fully aware that his style of investing can fall out of favour for short periods of time. Thanks to the board’s zero-discount policy, MNP’s Discount has remained stable during the current market, currently trading on a 0.8% discount.

Sustainability also remains a key feature of MNP, with Zehrid taking an equally detailed approach to ESG analysis. MNP is in fact not only ranked as the most sustainable trust in the AIC Global sector according to Morningstar, but is also in the top 1% of all global equity strategies (both open- and closed-ended).

Thanks to Zehrid’s sophisticated and consistent investment approach, we believe MNP remains a good option for any investor looking to gain exposure to quality growth stocks or looking to increase their overall equity exposure, given the trust’s global remit. However, it is important to note that growth investing does come with certain risks, as we are currently seeing in today’s markets. Yet MNP’s underperformance during periods of rising interest rates is perhaps not unexpected, given its inherently high underlying valuations. We are also encouraged by Zehrid’s levelheadedness during these periods, as the manager has avoided the temptation to compromise his style at times when the market becomes difficult.

In fact, if investors share Zehrid’s views around the nature of market cycles and our current position in them, then this may be an attractive entry point into what is a long-term strategy, given the recent falls in the trust’s shares. We note that shareholders are shielded from the widening discounts which similar growth strategies have seen, although there are some risks to growth investing which investors need to be able to stomach.

We also believe MNP is an excellent choice for any ESG-conscious investor, given Zehrid’s commitment to ensuring the comprehensive integration of ESG into his investment process. This is reflected in MNP’s sector-leading ESG credentials.