With many US equity funds criticised for having too much of their portfolio invested in technology stocks, namely the Faangs, none of Wintle’s top 10 holdings in the VT Tyndall North American fund feature in the S&P 500’s top 10 positions.
On launching in July 2017, the former manager of the Neptune US Opportunities Fund between 2005 to 2016, wanted non-correlated exposure to the US index and as such the only Faang stock held in the portfolio today is Amazon.
To keep this uncorrelated position, Wintle’s third largest holding in the fund at the end of July was WWE, the US media company known for professional wrestling, while in April he added a large holding (4.07%) in Walt Disney, now the fifth largest position in the portfolio.
“It is really important to understand how millennials are spending their money and how different it is to their baby boomer parents,” he said. “This is why we own WWE and the gig company Live Nation.
“Take WWE, it has the characteristics of a sports franchise, and on any given weekend it will be one of the top three watched sporting events. There has never been a single sports franchise that has gone down in value, while at the same time the company has a global reach, being the second biggest sport in India behind cricket. It is a really interesting idea.”
Core and tactical split
Wintle’s portfolio holds 45-50 stocks and is split half in core long-term holdings and half in more tactical short-term ideas.
“We are trying to protect fund the against big sector rotations,” he said. “So, in the core part of the portfolio turnover is low, while the tactical half is more active and it is this part of the portfolio we will express either defensiveness or bullishness.”
For much of 2018 the fund adopted a full-on aggressive stance and at times led the index by 10%. But as US growth slowed in the fourth quarter, this aggressive position was changed to a defensive stance, helping the fund return top decile performance for the calendar year, said Wintle.
While this proved the correct strategy at the end of 2018, Wintle concedes it did not work as well in the first quarter of this year, leading the fund to lag the index, although performance has since caught up in the second quarter.
According to FE Analytics, the fund has returned 15.6% over six months and 8% over one year respectively, compared with the IA North America sector’s 12.5% and 8%.
‘A belting idea’
A stock in the core part of the portfolio which ticks all the boxes for Wintle is Disney, which he describes as “a belting idea for the next 10 years”.
Wintle said before he initiated the holding it traded sideways for some four years and had been “pretty rubbish”. However, he is confident that things have now changed.
“It owns Hulu which caters for adults, is about to launch its Disney+ streaming service for kids and has ESPN+ for sports,” he said. “Unlike Netflix it also owns all of its own content, which includes Marvel, Star Wars, Pixar and the recently acquired Fox assets, and then the jewel in the crown which is the theme parks.”
On launching the fund over two years ago, Wintle also added several long-term holdings from his previous fund, including Microsoft, Mastercard, Visa and Fiserv (currently the largest holding at 4.66%), which is a global provider of financial services technology. All of these remain in the portfolio today, demonstrating the manager’s long-term approach to trying the beat the index.
“It is no good being a passive-plus 1-2 fund, we have to deliver investors some value,” he added.
VT Tyndall North American performance versus sector and index
|IA North America TR in GB||0.97||7.26||12.77||8.38|
|S&P 500 TR in GB||0.57||7.58||12.96||8.30|
|VT Tyndall North American F Acc GBP in GB||1.97||10.07||15.68||8.19|