Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?
We look for businesses that have robust business models and strong market positions, which have appropriate balance sheets and crucially are able to generate cash to invest in and grow their business, while still paying dividends. Although our mandate is to seek income and to build a portfolio that has a dividend yield greater than that of the market. That does not mean just investing in those companies with the highest yields, as often those are the dividends most at risk of being cut. Instead we look to focus on companies with sustainable dividends. We look to invest in a broad range of companies who are in control of their own fates, irrespective of market conditions.
How are you positioning your portfolio to prepare for the global recovery from the Covid-19 pandemic?
We did not make any major changes to holdings during the pandemic. Quite a lot of activity was around providing additional equity funding to existing holdings in "survival mode" to see them through the crisis, for example Restaurant Group and WHSmith.
Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio?
In the mining space, we hold a large position in Rio Tinto. It is very exposed to iron ore, but also building out its copper assets. Copper will be crucial to the economy in the transition to using more electricity rather than fossil fuels to achieve carbon emission reductions. In healthcare, we hold AstraZeneca and GlaxoSmithKline (GSK). The former is almost a victim of its own success - many people invested here during the pandemic as a defensive play and despite developing a vaccine, people sold out and moved towards recovery shares. GSK is interesting because it will be split into two companies later this year: drugs and consumer healthcare. In financials, we do not own any of the big banks as they are quite commoditised - we prefer more specialised businesses such as Paragon, Close Brothers, Brewin Dolphin and IG because they tend to be more manageable and subject to less political pressure.
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