Recent Fund Managers Updates

The importance of meeting fund managers

As we aim to pick highly skilled active managers, face-to-face meetings with fund managers are vital throughout the selection and monitoring process. While our quantitative work will tell us about a manager’s past activity, performance profile and sources of outperformance, manager meetings provide insight that quantitative analysis alone would not necessarily reveal.


Financial Market Update - Pensions


Fund Manager Visits

Harvest has a policy of meeting with the managers of funds on our Recommended List on a regular basis and providing brief reports of those meetings to clients via our website. Below please see a report following our most recent fund manager meeting.

Date: October 2017

The Fund Manager

First Trust is a US-based manager of a range of both passive and active funds. The firm was established in 1991 and has approximately US$112 billion in terms of total assets under management.

The Fund

The First Trust North America Energy Infrastructure Fund invests in companies and partnerships which own and control energy infrastructure assets such as oil and gas pipelines, power generating plants, grid connection works etc. across the North American continent. It does not invest directly into energy production e.g. oil and gas companies

Fund Manager Views and Comments

While the market values of the assets owned by the fund can be affected by sentiment towards the energy sector, the underlying profitability of the companies owned tends to be very stable and predictable and largely unaffected by power price movements. In addition, as the fund invests in infrastructure for both the traditional and renewable energy sub-sectors, its value and performance will be determined more by overall energy usage than by the source or price of that energy. As a result, the manager is very confident about the longer term outlook for the fund and, more importantly, by the ability of the fund to pay a consistent and growing level of income to investors.

Harvest View

Most of the underlying companies held by the fund are utility companies with quasi monopoly characteristics. The pricing of their products and services is largely controlled by regulatory bodies and generally involves an indexation element. As a result the cash flows of these companies tends to be highly predictable which in turn allows the manager of the fund to distribute a consistent and growing annual dividend to investors. Currently the annual dividend yield to investors is around 4.5% and this should grow steadily over time. We see a place for this fund in client portfolios seeking to generate an annual income significantly ahead of cash deposits.


Meeting with First Trust Global Portfolios July 2017

First Trust is a large US fund management group (c.$100 billion under management) offering a range of passive and active funds to investors.

  1. View on Markets

First Trust’s view on equity markets is unashamedly bullish, particularly in relation to the US, where they see positive earnings surprises and Trump inspired stimuli pushing markets forward for the remainder of 2017.

  1. Fund Focus – North American Energy Infrastructure Fund

This is a First Trust managed fund which invests strictly in energy infrastructure companies i.e. the companies who own and manage the pipelines, the electrical cable systems, the grid connections etc. across North America. Most of these companies are quasi monopolies whose profitability is relatively predictable and is independent of energy prices. Because of their nature, these companies have high payout ratios which allows the fund to distribute in excess of 4.5% annually back to investors. Distributions are made monthly. First Trust recently launched a euro hedged share class which neutralises the exposure to the US$.

Fund Performance Jan 2016 to date

This information has been provided for discussion purposes only. It is not advice, it is provided for general information purposes only and does not take into account the financial position, investment needs and objectives, attitude to risk, liquidity needs or capital security needs of any particular person. It should not be relied upon to make investment decisions. Prior to any formal investments taking place you will be provided with a detailed suitability letter taking into account all the above and outlining why the selected fund(s) are (not) suitable for you.


Warnings: The value of investment(s) in the selected fund(s) may go down as well as up. If you invest in the selected fund(s) you may lose some or all of the money you invest. Past performance is not a reliable guide to future performance.