MARTIN CURRIE GLOBAL TRUST: Picks key drivers behind global growth

It has been five years since asset manager Zehrid Osmani took the helm of investment fund Martin Currie Global Portfolio. While he is pleased with the resulting returns investors have enjoyed, he remains humble and focused on the future, rather than looking in the rear-view mirror.

Osmani was hired from rival asset manager BlackRock in May 2018 and jointly ran the trust from June to September, then took full control. Its impact was impressive no matter how you parse the performance numbers.

Over the past five years, the £270 million listed fund has delivered a return of 47 per cent. This compares to an average return of its global peers of 15 percent. Over the past year, the respective figures are 20 percent and 8 percent.

The fund’s success is built solidly around identifying the major global themes that will drive economic growth – and then taking stakes in those companies it believes will benefit.

The result is a portfolio of just 30 companies, eight fewer than when he took over. Osmani says the more concentrated fund is a deliberate move.

“The idea is to capture the very best investment ideas and take significant stakes in the companies that will thrive as a result,” he says. ‘It also raises the quality threshold of the fund. When one of our analysts gets a new exciting buy idea, it only goes into the fund if it’s better than what we already have. What we’re not prepared to do is end up with a fund with a long tail of holdings.’

Eight investment themes dictate the companies the trust manages. These include everything from green energy, electric cars, healthcare to technology and geopolitical tensions, the metaverse and artificial intelligence.

Yet the companies that Osmani selects are not always obvious. For example, while he says demand for health care will increase as the population ages — especially in the developed world — he’s not enthusiastic about the big drug companies like AstraZeneca and GlaxoSmithKline.

He says patents on many existing drugs are expiring, research and development productivity is declining, and drug prices are under pressure from governments.

Instead, Osmani prefers to invest in medical technology companies that offer high growth potential – and more importantly, the chance to earn strong returns on investment.

Major trust holding companies in this field include US medical device company ResMed, which makes devices for the treatment of conditions such as sleep apnea and lung disease; and Veeva Systems, a developer of software used in hospitals worldwide. While technology is the trust’s largest investment theme, it has no interests in major technology companies Alphabet, Amazon, Apple, Netflix and Meta, but does have interests in Microsoft. Osmani says this sets the confidence apart from many rivals that are similarly focused on growth.

Not everything the trust touches turns to gold. It lost money on stakes in Chinese tech companies Alibaba and Tencent. “Unfortunately, we make mistakes,” Osmani admits. But the performance numbers suggest these are more than offset by successful stock selection. Osmani says the chance of the world going into recession this year is between 30 and 35 percent. But he believes China’s re-emergence as an engine of economic growth is positive.

Although the trust pays a quarterly dividend, income is not a priority. For the past five years it has totaled 4.2 pence per year. Shares are currently trading for around £3.50. The exchange code is 0537241 and the ticker is MNP. The annual costs total 0.67 percent.