CF Canlife Global Equity Fund Update

is the value tide starting to turn?


We made very few changes to the portfolio in September, as the market started to reward our value, contrarian positioning. The month was characterised by an increase in bond yields globally, a trend which was initiated by Bank of England (BoE) Governor Mark Carney suggesting that a UK rate rise was due. Furthermore, economic growth continued to tick along across the major developed markets, with Purchasing Manager Index (PMI) data showing expansion across the US, Europe, the UK and Japan. As a result, 10 year UK gilts rose from 1.0% to 1.4%, US treasury yields moved from 2.0% to 2.3% and even bunds reached 0.5%.

This was a more supportive environment for our strategy, as higher bond yields benefit value-style stocks. For example, higher rates enable banks to increase profits, as they are able to lock in a higher net interest margin (NIM). In addition, these higher yields also put pressure on the higher-valued growth areas of the market and we have started to see some sectors tail off.

We also enjoyed stock specific successes, with the UK a particular bright spot. These included a number of stocks, such as plastics and packaging company RPC Group, that we believe have been unfairly punished by the market and therefore represent excellent value at current valuations. In the US, we took a position in Equifax following its data-breach related sell-off and this rallied strongly in the following weeks. The company’s consumer division, which was the recipient of the hack, produces only 8% of total revenues and we believed the stock represented excellent value given it was trading at a five year low price-to-book.

Although growth has outperformed value so far this year, we believe yields can continue to drift higher towards year-end, which should support value sectors and stocks. This would benefit the relative performance of the CF Canlife Global Equity Fund and we believe we are well positioned for this environment. 

Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Currency fluctuations can also affect performance. 

The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at

Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

CLI00962 Expiry on 15 January 2018

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