Martin Currie Global Portfolio Trust

Martin Currie Global Portfolio Trust (MNP) is a global equities investment trust. During the past year MNP has provided absolute returns of 12.6% and 16.8% for NAV and price total return respectively, compared to its benchmark, which returned 14.4%. The portfolio’s defensive positioning has hindered performance a little during this period, although the manager has become more bullish on the outlook for global equities given the continuing global monetary expansion, which the manager believes will support growth and increase the attractiveness of equities as an inflation hedge. The discount has narrowed during the last half year from c 6% to its current 2.0%.

Investment Strategy: International Quoted Investments
MNP is managed using a predominantly bottom-up investment style supported by macro analysis. There are no formal sector, stock or market capitalisation restrictions, and the trust maintains a relatively focused portfolio of around 60 international quoted stocks with a view to providing long-term capital growth. The investment process looks to identify higher-quality global companies at attractive valuations, with superior growth prospects. MNP can gear up to 20% of total assets but is currently ungeared. MNP remains overweight in the UK (c 17% of its portfolio vs c 9% of the benchmark) which is a result of stock selection and the number of attractively priced UK listed stocks with global businesses.

Sector Outlook: Positive Outlook For Global Equities
The manager maintains that equity valuations remain attractive, particularly given the yields available on gilts and bonds, and that, with a general rotation back into equities taking place, there is further upside to equity prices. In terms of downside risks, long term solutions to structural problems such as eurozone competitiveness and US fiscal deficits are yet to be found, but the manager now believes that the worse case scenarios will not come to pass and that, even after a strong performance for equities during January, a further 10% uplift during 2013 is readily achievable.

Valuation: Discount Below Long-Term Averages
MNP’s discount has tightened appreciably during the last six months from c 6% (in line with its longer term averages of 6.0% and 5.6% over three and five years respectively) to its current discount of 2.0%. Compared to other global growth investment trusts, MNP’s discount is appreciably narrower (sector: c 8%) but MNP continues to pay an above-average yield.

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