Contributors to performance have been mostly stock-specific, although a sizeable position in consumer staples has generally performed well with lower interest rates.
The manager says: “Generally it’s been good, [although] one stock that’s been challenging for us is [US insurance firm] MetLife. We think it’s doing all the right things, [but] as a life insurance company it needs higher rates, and as interest rates have been depressed it has weighed on [the business]. We own it because we like it, but also from a portfolio perspective as it will be a powerful beneficiary when interest rates rise, so you have to look at the wider portfolio.”
Mr Clarfeld also highlights the broad and diverse dividend market in the US as the dividend culture improves, pointing to the large allocation to technology “that might be harder to do in certain markets”. He adds: “It has opened up more opportunities; technology is a great example of that. If you were a dividend investor 10 years ago there was nothing you could hold in technology. Now it’s a challenge, but there is more.”
