Defense Investment Transformation: Sts Global Income & Growth Trust's Resilient Approach Elevates Defense into an Investment Masterpiece
Investing in STS Global Income & Growth ain't about blowing up the spot. Hell no!
Ever since Troy Asset Management grabbed the reins at the end of 2020, this bad boy's been more like a defensive lineman than a wide receiver - happy to dish out a steady flow of income to shareholders while gently upping the value of their investments, and preserving it like a prized possession when stock markets take a dive.
It's a cautious game plan that's worked so far. Since November 2020, it's managed to generate a return - a mix of capital and income growth - over 35%!
Although that might seem like a measly 10% below the average 43% return for its global equity income peer group, senior fund manager James Harries ain't sweatin' it. He claims the £287 million trust is doin' exactly what it was designed to do - steer a steady course through the ups and downs. He runs things along with colleague Tomasz Boniek.
"We want STS Global Income & Growth to be a high-quality, low volatility trust in the global equity income space," says Harries. "That means runnin' a concentrated portfolio of exceptional, resilient companies which are capable of generate' sufficient income to support growin' dividends. We see our core shareholders as havin' a requirement for income while not wantin' to see their capital depleted - that's what we're tryin' our hardest to deliver."
In terms of income, the trust's annual dividend is movin' in the right direction. Although the payment was cut in the financial year they took over management of the trust - "a necessary reset," insists Harries - it's ticked up gently over the past three years, from 5.7p a share to 6.54p.
Three years should become four in the next few weeks or so when the trust reports its final quarterly dividend payment for the financial year endin' March 31 (dividends paid so far this year total 4.758p).
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As far as capital depletion is concerned, it's been far more resilient than its peers recently. Over the past six months, the trust has recorded a gain of 5% compared with the 3.2% loss by the average for its peer group. At other times when markets have declined - for example, at the start of the Ukraine war in 2022 and later in the same year when interest rates rose suddenly - it's proved equally resilient.
The trust is currently invested across 31 companies, with its only exposure to the 'magnificent seven' US stocks - Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla - being in Microsoft.
Though Harries says it's difficult to make predictions about the future for markets or the world economy, given the unpredictability of Pres. Donald Trump, he believes there's the likelihood of a recession in the United States, explainin': "We are due a more difficult period."
In recent months, the trust has taken stakes in a number of new stocks. These include Spanish IT company Amadeus, UK pest control specialist Rentokil, German tech company Siemens, and US sportswear giant Nike.
Harries says: "Nike's shares are a third of the value they were tradin' at in late November 2021. The company may have to shift some of its production away from Vietnam if Trump's tariffs remain in place, but it has sufficient pricing power to withstand what the President puts in its way.
"At the end of the day, it remains a quality business - and that's what I'm interested in holdin' under the bonnet of STS Global Income & Growth."
Annual trust charges total 0.77%, its market ticker is STS, and identification code B09G3N2.
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- In the realm of finance, STS Global Income & Growth finds its unique approach to investing, resembling a defensive lineman in a business game, aiming to provide a consistent income to shareholders and preserving their investments, especially during market declines.
- When it comes to managing one's personal finances, individuals seeking low volatility investments in the global equity income space might consider STS Global Income & Growth, a high-quality trust designed to deliver a steady growth of dividends without draining the shareholders' capital.
- For those considering investments in mortgage-related securities or other long-term financial ventures, understanding the strategies of professional managers like James Harries and Tomasz Boniek at STS Global Income & Growth can provide valuable insights, as they focus on building a concentrated portfolio of exceptional, resilient companies capable of generating sufficient income for growing dividends.
