GLG Income

The GLG Income strategy uses a differentiated approach which aims to identify companies with strong fundamentals and dividend prospects.
  • A long-only strategy aiming to achieve an income higher than that of the FTSE All-Share Index, with capital appreciation
  • The central investment philosophy has been refined by Henry Dixon and his team over 14 years in the industry
  • The strategy leverages the existing value-focussed investment process used for the GLG Undervalued Assets strategy
  • The managers have the flexibility to invest across the capital structure where appropriate to target higher income

Approach

The investment philosophy can be summarised as a differentiated approach targeting three types of investment opportunity:

  1. Those which are uncovered by the existing investment process used by the GLG Undervalued Assets strategy. They must also exhibit a dividend yield which at least matches the market average.
  2. Stocks with strong balance sheets where there is a compelling case for dividend growth exceeding twice that of the market average.
  3. Where analysis of the entire capital structure exposes attractive opportunities through investing in the debt of a company.

In seeking out companies with strong cash and balance sheet characteristics – but whose share price indicates that assets or profit streams are undervalued by the market – the managers identify unloved stocks that that they believe are materially better value than the broader market. The requirement of a dividend yield at least matching that of the market ensures the inclusion of investments with the potential for attractive income and capital generation for the portfolio.

Where the existing investment process determines positive equity value, the portfolio also has the flexibility to analyse all areas of a company’s capital structure for attractive income metrics complemented by capital appreciation. This might advocate investment in debt instruments where appropriate, such as corporate and convertible bonds.

Through Man GLG’s platform the team has significant access to resources, allowing them to leverage credit research where cross capital structure opportunities arise.

Approach Long-only
Asset Class Equity
Geographic Focus UK
Reference Index FTSE All-Share TR Index

Performance

Strategy

Reference Index

Relative Return

3.4%

1.6%

1.8%

4.1%

0.4%

3.6%

43.8%

33.9%

9.9%

17.0%

15.2%

1.8%

274.7%

226.8%

47.9%

97.0%

61.2%

35.8%

Performance by calendar years

Strategy

5.0%

15.1%

-13.8%

21.7%

-7.3%

As at 31 May 2023 Inception date 5 March 1999

Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.

Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is calculated in GBP and is based on a representative investment product or products that follow the strategy. An example fee load of 0.75% has been applied. The FTSE All-Share TR Index is selected by the Strategy Manager/s for performance illustration and comparison purposes only. It is not a formal benchmark and does not form part of the strategy’s objectives. *Current management assumed responsibility for the strategy on 30 November 2013.

Manager(s)

Henry Dixon
Henry Dixon, CFA
Portfolio Manager, Man GLG
Erin Ennis
Erin Ennis, CFA
Analyst, Man GLG
Hannah Burrows
Hannah Burrows
Analyst, Man GLG
James Houlden
James Houlden, CFA
Portfolio Manager, Man GLG

Related content

Too Much Gloom Has Descended on the UK Stock Market April 2019

Despite near record relative value, investors are underweight UK stocks. Consumers, government and business may prove them wrong.

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Views From the Floor - Are Banks and Housebuilders Really Uninvestable in a Recession? 7 February 2023

Lessons from past recessions for unloved domestic names; incumbents retake ground from insurgents; and what to make of reset European Growth valuations.

 Man Group

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Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs. Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.

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Considerations

One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:

Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.

Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.

Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.

Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.

Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..

Financial Derivatives - The Strategy may invest in financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) typically for hedging purposes. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The use of FDI may multiply the gains or losses.

Hybrid Securities - The Strategy may invest in contingent convertible (“coco”) bonds. The performance of such bonds is dependent on a number of factors including interest rates, credit and equity performance, and the correlations between factors. As such these securities introduce significant additional risk to an investment in the Strategy.

Single Region/Country Risk - The Strategy is a specialist country-specific Strategy or focuses on a particular geographic region, the investment carries greater risk than a more internationally diversified portfolio.