Evenlode is an employee-owned investment company that quietly makes money for its clients in its own way.
The 18-strong investment team is based in Chipping Norton, Oxfordshire, and manages £5.6bn of assets with the main aim of generating ‘smooth’ returns for investors.
While the £3.3bn income fund is so popular that it is currently deterring new investors from joining with a 5 per cent entry charge, Global Equity Income and Global Equity remain open for business.
Global Equity is the youngest of the three funds and has the best investment track record in absolute terms. With £433 million under its belt, it is about to celebrate its fourth birthday and has generated a total return of 54 per cent to date.
For comparison, the average global investment fund is making a gain of 43 percent.
“Global Equity has performed well across a range of market and economic environments,” said Chris Elliott, joint manager alongside James Knoedler. “We are particularly pleased with how the portfolio has performed since the inflation shocks of 2021 and beyond. It has performed well, which is testament to the quality of our stock selection.”
The managers aren’t interested in making big sector bets or favoring specific stock markets. Their mission is to find profitable, cash-generating companies that have a competitive advantage—and an advantage that will last into the future.
“We look for three key ingredients,” Elliott says. “We want to buy businesses that have a strong market position, a sustainable competitive advantage over rivals and are willing to sacrifice some profit to continue to invest in their business.”
There are just under 80 companies on its radar, but the fund currently invests in just 33. Of these, 20 have been held by the fund since its launch in July 2020, including Mastercard and Alphabet (its two largest holdings), Swiss food giant Nestlé and Spanish software company Amadeus.
“For stocks we like, we set a price at which we feel comfortable buying – and a price at which we want to get out,” Knoedler adds.
‘In this way, we regularly move money between our opportunity sets to generate the best returns for investors without taking too much risk.’
Recent additions to the portfolio include UK listed company Informa, ship broker Clarksons (also listed in the UK) and US online accommodation booking service Airbnb.
The divestments include US cosmetics giant Estee Lauder and management consultant Aon – companies whose shares they believed were no longer cheap and whose prospects were bleak.
While the fund has exposure to some of the giant US tech companies, artificial intelligence (AI) specialist Nvidia is absent. “At the right price, we would buy it,” Knoedler says.
“But ideally we’d like to have a longer financial history for the company before we buy the stock. AI has all happened pretty quickly for the company.”
Unlike most other global equity funds, Evenlode Global Equity has a significant portion of its portfolio in UK companies, including RELX, London Stock Exchange and drinks producer Diageo.
“What matters to us,” Elliott says, “is where our holdings generate their income. While UK companies make up 18 percent of the fund’s assets, only five percent of the portfolio’s income comes from the UK.
In contrast, stocks from the Asia-Pacific region make up less than two percent of the portfolio, but the region accounts for about 17 percent of turnover.
The total fund costs are reasonable at 0.85 percent.
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