EP GLOBAL OPPORTUNITIES TRUST PLC
INTERIM MANAGEMENT STATEMENT FOR THE THREE MONTHS TO 30 SEPTEMBER 2014
The Board of EP Global Opportunities Trust plc (the "Company") announces its
Interim Management Statement as required by the UK Listing Authority's
Disclosure and Transparency Rules. This Statement is in respect of the period
from 1 July 2014 to 30 September 2014 and should not be relied upon for any
other purpose.
OBJECTIVE
The investment objective of the Company is to provide Shareholders with an
attractive real long-term total return by investing globally in undervalued
securities. The portfolio is managed without reference to the composition of
any stock market index.
FINANCIAL SUMMARY
30 September 2014 30 June 2014 % change
Net asset value per ordinary share
(including income) 236.9p 232.2p 2.0
Share price per ordinary share 227.38p 225.0p 1.1
Share price discount to net asset
value 4.0% 3.1%
Net assets £112,848,000 £111,447,000 1.3
REVIEW OF THE PERIOD
RESULTS
The net asset value total return for the three month period to 30 September
2014 was 2.0%. In comparison, the return from the FTSE All-World Index was 3.2%
while the return from the FTSE All-Share Index was -1.0%. All Index returns are
stated on a total return basis.
SHARE PRICE AND DISCOUNT
During the quarter to 30 September 2014, the share price increased by 1.1% to
227.38p. The share price discount increased from 3.1% at 30 June 2014 to 4.0%
at 30 September 2014.
During the period, the Company repurchased 375,000 shares which were placed
into treasury. The total number of shares held in treasury at 30 September 2014
and the date of this Interim Management Statement is 16,881,917 shares,
representing 26.2% of the total number of shares in issue of 64,509,642 shares.
The total number of shares in circulation is 47,627,725 shares.
INVESTMENT STRATEGY AND OUTLOOK
The main feature in global equity markets during the quarter was the strength
of the US dollar against other major world currencies. European equity markets
were impacted by the low level of economic growth, which was disappointing when
compared to earlier expectations. A combination of the impact of events in the
Ukraine and lower business confidence levels, resulting from cautious company
announcements, had an adverse impact, particularly on cyclical companies. By
contrast, corporate news in Japan continued to improve against a backdrop where
commentators remain concerned about the lingering effect of the recent increase
in the sales tax.
A notable feature within the portfolio is the low level of US exposure, which
is almost entirely focused on stocks in the technology sector. We continue to
find it difficult to identify more than a handful of US companies which fulfil
our valuation requirements. This is perhaps not surprising given the strength
of the US equity market in recent years. With US net profit margins being at a
historically high level, we do not believe this can be sustained.
With the recent rise in equity markets and the more muted level of forecasts
for global economic growth, we have retained the increased portfolio exposure
to the healthcare sector, as a result of the improving outlook for
pharmaceutical companies. Exposure to the telecommunication industry has also
remained high, as a consequence of recent positive regulatory developments in
Europe. The increases in these sectors were financed from the sale of
industrial stocks where we considered there to be an increased level of
valuation risk.
Overall equity market valuations worldwide are considered to be fairly valued
and, while remaining comfortable in aggregate, equity valuations can no longer
be considered cheap. We believe that global economic growth will remain
subdued, but continue to retain an almost fully invested portfolio. In
particular, we continue to remain positive on the outlook for Japanese
companies, which we believe will benefit from recent supply side reforms.
PORTFOLIO OF INVESTMENTS
% of Net
Rank Company Sector Country Assets
1 KDDI Telecommunications Japan 3.3
2 Yamaha Motor Consumer Goods Japan 3.2
3 Novartis Health Care Switzerland 3.1
4 Swire Pacific Industrials Hong Kong 3.1
5 Toshiba Industrials Japan 3.0
6 Microsoft Technology US 2.9
7 AstraZeneca Health Care UK 2.8
8 PostNL Industrials Netherlands 2.8
9 Japan Tobacco Consumer Goods Japan 2.8
10 Mitsubishi Industrials Japan 2.7
11 Panasonic Consumer Goods Japan 2.7
12 Sumitomo Mitsui Financial Financials Japan 2.6
13 East Japan Railway Consumer Services Japan 2.6
14 Roche Health Care Switzerland 2.6
15 DBS Financials Singapore 2.5
16 Sumitomo Mitsui Trust Financials Japan 2.5
17 Google Technology US 2.5
18 Royal Dutch Shell Oil & Gas Netherlands 2.5
19 Toyota Consumer Goods Japan 2.5
20 Fresenius Medical Care Health Care Germany 2.5
21 Qualcomm Technology US 2.4
22 Vodafone Telecommunications UK 2.4
23 Screen Technology Japan 2.4
24 Bangkok Bank Financials Thailand 2.3
25 BG Oil & Gas UK 2.3
26 Hutchison Whampoa Industrials Hong Kong 2.3
27 Sanofi Health Care France 2.2
28 BNP Paribas Financials France 2.2
29 Intesa Sanpaulo Financials Italy 2.1
30 KPN Telecommunications Netherlands 2.0
31 HSBC Financials UK 2.0
32 Indra Sistemas Technology Spain 2.0
33 ABB Industrials Switzerland 2.0
34 Terex Industrials US 1.9
35 Misawa Homes Consumer Goods Japan 1.9
36 Bridgestone Consumer Goods Japan 1.9
37 Samsung Electronic Consumer Goods South Korea 1.8
38 Bank Mandiri Financials Indonesia 1.7
39 Gazprom Oil & Gas Russia 1.7
40 Edinburgh Partners Financials UK 1.3
41 Edinburgh Partners
Prospect Fund Financials Ireland 1.0
Total equity investments 97.0
Cash and net assets 3.0
100.0
GEOGRAPHICAL DISTRIBUTION
30 September 2014 % of Investments
Japan 35.2
Europe 29.6
Asia Pacific 14.1
United Kingdom 11.1
United States 10.0
100.0
SECTOR DISTRIBUTION
30 September 2014 % of Investments
Financials 20.8
Industrials 18.4
Consumer Goods 17.3
Health Care 13.6
Technology 12.6
Telecommunications 7.9
Oil & Gas 6.7
Consumer Services 2.7
100.0
Past performance is not a guide to future performance.
Save as noted above, the Directors are not aware of any significant event or
transactions which have occurred between 30 September 2014 and the date of
publication of this statement which have had a material impact on the financial
position of the Company.
ENQUIRIES:
Sandy Nairn
Kenneth Greig
Edinburgh Partners AIFM Limited
27-31 Melville Street
Edinburgh
EH3 7JF
Tel: 0131 270 3800
Registered Office of the Company:
27-31 Melville Street
Edinburgh
EH3 7JF
29 October 2014