GLG RI Sustainable European Income

GLG RI Sustainable European Income (the ‘Strategy’) is a long-only, European equity income strategy with sustainability at its core from both a financial and ESG perspective.

  • Managed by Firmino Morgado (+25 years’ experience) and Filipe Bergana (+15 years’ experience)
  • A proven 5 year track record of managing a European equity income strategy
  • Active management is paramount, the team aim to construct a high conviction portfolio of 25 to 35 positions with income sustainability at its core. The Strategy blends two dividend categories:
    • Dividend Yielders – stocks that have a high, sustainable dividend (>4%) but moderate growth potential
    • Dividend Growers – stocks that have a moderate dividend yield but have high growth potential (>5%p.a.)
  • Focused on sustainable responsible investment having developed systematic process via a proprietary ESG tool which identifies specific targets through a science-based approach
  • Deep synergies with Man GLG’s European Equities stock picking team – numerous sector specialists provide an analytical edge

Approach

The team’s core aim is to deliver a growing sustainable income through a high conviction and concentrated portfolio that combines stocks from companies the team deem to be either Dividend Yielders or Dividend Growers. Companies are only considered if they display the following four key characteristics.

 

  • Sustainability: cash generating business model with an ability to consistently pay dividends
  • Persistence: clear dividend policy and strong commitment to honour payments embedded in the company’s culture
  • Growth: potential to grow a dividend over time without jeopardizing capital solidity and financial prudence
  • Valuation: attractive valuation and equilibrium between prospective dividend yield and dividend growth potential
 
Sustainability at the core of the investment process

The team now takes a fully dedicated approach to sustainable investing. The ESG framework has been designed to run parallel to the four-stage investment process. The investment process maintains a Science-based approach to E, S and G with analysis backed by proprietary ESG tools. The team are able to monitor relative metrics versus the overall sector and against the company’s own history.

The team prioritizes stakeholders, as it believes the long term sustainability of a company is crucially linked on creating value for employees, clients and shareholders. It firmly believes that a company’s culture of growing dividends leads to better capital allocation decisions. Their approach is to identify companies with business models that demonstrate consistent and sustainable growth potential, with management teams that are good capital allocators and reward shareholders with a growing and sustainable cash dividend. The ideal investment is one that the team will hold indefinitely, and the end goal is to have a portfolio of high conviction ideas, independent of index weights.

Manager(s)

Firmino Morgado
Firmino Morgado
Portfolio Manager, Man GLG
Filipe Bergaña
Filipe Bergaña, CFA
Portfolio Manager, Man GLG

Related content

The Tortoise and the Hare: The Case for Dividend Growth November 2019

There is a fundamental case for investing in stocks which boast growing dividends, in our view.

 Filipe Bergaña
The Investment Pendulum July 2019

What will happen if the pendulum of the European Central Bank’s expansionary monetary policy stops swinging?

 Firmino Morgado

Investment Solutions

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.

UCITS
Alternative investment funds
US 40 ACT
Regional funds
Separate accounts
Advisory mandates
Managed accounts

Access to investment products and mandate solutions are subject applicable laws and regulations including selling restrictions and licensing requirements. Investment solutions listed above may not be compatible for all investment strategies and may be subject to minimum subscription requirements. Regional Funds: In additions to UCITS and AIFs registered across the EEA, a number of investment strategies are available in vehicles registered in Chile, Netherlands, Hong Kong, Japan, Singapore, South Korea and Switzerland.

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Important Information

1. The limits and/or targets illustrate the Investment Manager’s current intentions, and are subject to change without notice.

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..

Concentration Risk - The Strategy invests in a limited number of investments may be held which can increase the volatility of performance.

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.

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.