Smaller in size than the popular £3.47 billion Evenlode Income Fund (BD0B7D5), Shares believes this is a good time to put money to work with sister fund Evenlode Global Income (BF1QNC4). Launched in late 2017, the latter has delivered a five-year annualised total return of 8.9%, ahead of the 5.7% from the
former, despite a recent headwind from its lack of exposure to large tech firms operating in the semiconductor space.

Actively managed with a focus on companies with high returns on capital and strong free cash flow, we like Evenlode Global Income’s emphasis on delivering sustainable real dividend growth to shareholders via a focused book of 40 businesses with diversified, multi-national revenue streams.

Offering a historic yield of 2.1%, and one that looks sustainable, this fund is a sensible option for investors looking to combat persistent inflation and position portfolios for uncertain equity market conditions ahead.

Evenlode Global Income is managed by Evenlode’s Ben Peters and Chris Elliott, long-term investors in market-leading companies across sectors spanning everything from information technology and healthcare to consumer goods and media.

Although they operate in different industries, the companies in the portfolio share the same valuable traits. They tend to be market leaders with attractive structural growth opportunities, they provide value-adding goods and services to customers and generate high returns on invested capital.

Crucially, they generate ample cash flow to fund their operations today, investment for the future and deliver sustainable real dividend growth to shareholders, the latter especially important in this period of stubborn inflation.

Helpfully, Evenlode Global Income’s factsheet discloses the top 20 holdings, which include cash-generative, dividend-paying consumer goods goliaths Procter & Gamble (PG:NYSE), Unilever (ULVR) and Reckitt Benckiser (RKT) as at 31 July 2023, as well as US tech behemoth Microsoft (MSFT:NASDAQ).

The £1.86 billion fund also offers exposure to European luxury leaders LVMH (LVMH (MC:EPA) and L’Oréal (OR:EPA), not to mention food giant Nestle (NESN:SWX) and Dutch information services company Wolters Kluwer (WKL:AMS).

In the managers’ latest commentary, they stress that operating results in the recent earnings season from portfolio companies have been ‘positive overall with revenues, operating margins and, importantly, cash flows improving’. In addition, ‘the return of cash flow is particularly encouraging given the challenges of input cost inflation and supply chain disruption seen in recent times, although the picture continues to be volatile’.

New holdings include Diageo (DGE), the global market leader in spirits, and US software provider Jack Henry (JKHY:NASDAQ).

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