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JOHCM Global Opportunities
JOHCM Global Opportunities can invest in any company around the globe, but has a strong bias towards larger and medium-sized multi-national businesses whose revenues are generated from all over the world. It is highly active and unconstrained and its manager always has an eye on capital preservation. As a result, he is very willing to hold high levels of cash if valuations are unattractive.
Our opinion
The fund has historically been amongst the least volatile in the global sector. This is because the managers tend to be more cautious than many of their rivals, with an emphasis on protecting capital, while investing wisely. As a result, its risk-adjusted performance is exceptional. This is, without doubt, an option for a core global holding.Company description
JO Hambro Capital Management (JOHCM) was established in 2001. It prides itself on removing bureaucracy and taking an entrepreneurial approach. Funds are run as separate entities and there are no house views. Each fund manager has their own unique franchise, receiving a performance fee, which aligns them with investors. The group was awarded the Elite Equities Provider rating in both 2015 and 2017.
Fund manager
Ben Leyland has almost 20 years investment experience. He previously worked as a financial analyst at Schroders and, in 2006, joined JOHCM to work on the UK Opportunities fund with the highly regarded John Wood (who has since retired). Ben went on to launch JOHCM Global Opportunities fund in 2012 and has been managing it ever since, assisted by co-manager Robert Lancastle, who joined him on the fund in May 2017.
We harness the upside potential of owning shares in great businesses, but we do it without taking on inappropriate risks. Heads we win, tails we don’t lose too much.
Ben LeylandFund manager
Investment process
The philosophy of this fund is 'heads we win, tails we don't lose too much'. As a result, capital preservation runs through the heart of the process. The managers begin by screening out companies with the biggest causes of capital destruction; weak franchises, over-geared balance sheets and over-valued assets.
They then focus their research on high-quality, high return-on-capital businesses. Companies are valued on a best and worst-case scenario. The managers particularly like opportunities where downside risk is low relative to the potential upside.
ESG
ESG - Limited
JO Hambro uses a range of sources to help its fund managers make informed judgements when it comes to their investment decisions. For ESG analysis this includes multiple different external inputs. The managers have access to this ESG analysis and can incorporate it into his stock selection and portfolio construction process. The governance factor is often the most in focus, as it has the greatest alignment with the quality characteristics Ben and Robert are looking for. The managers can use the analysis to decide whether they think the ESG risks are material to the firm. This judgement of materiality, and the focus on valuation, does not rule out any industry, meaning that all options can be invested in so long as they meet the valuation and quality metrics. The overall portfolio is likely to have above average ESG scores but may contain names some sustainably-focused investors may deem unpalatable.
Risk
JOHCM Global Opportunities is well diversified by country and sector and holds around 30 to 40 stocks. Its capital preservation mindset and emphasis on quality has historically helped it to keep up with the pack in rising markets and outperform in a falling market. The managers are also very willing to hold high levels of cash (up to 20%) and have done so on several occasions since the fund was launched. This helps reduce volatility and gives them ammunition to take advantage of opportunities created by falls in the market.
Read more about this fund
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