BAGGOT EQUITY INCOME PORTFOLIO

Baggot Equity Income Portfolio (BEI) contains holdings of ETFs , investment trusts and individual equities. The portfolio is a global equity portfolio focused on income via dividends and capital growth. All assets held are subject to CGT tax rates on gains and standard tax rates on dividends. In 2022 the portfolio returned an income yield of 4.5% and total returns of 6.47%. This beat the benchmark by 6.58% BEI has a risk weighting 5 on the ESMA Scale.

INVESTMENT RATIONALE

By incorporating Equity ETFs and Investment Trusts into our process we are able to add broad diversification to the portfolio without high transaction costs. Further, Investment Trusts can trade at a discount or premium to Net Asset Value (NAV) depending on the market environment. Our manager looks to take advantage of periods in time when well managed Investment Trusts trade at significant discounts to NAV in order to add value to the portfolio. Our manager takes a quantitative approach to finding these mispriced opportunities where he can sometimes buy €1 worth of assets for €0.90 or sometimes even less.

STRATEGY ADVANTAGES

BEI is managed by David Flynn, our Chief Investment Strategist. David has over 30 years of industry experience, notably he was a portfolio manager for the iconic hedge fund Brevan Howard for 6 years. He even managed to post positive returns in 2008. Prior to joining Baggot, David worked as a portfolio manager for Merrion Capital Management (now Cantor Fitzgerald). While David has a strong ability to analyze companies from the bottom up, he utilizes a top down quantitative approach to investing because it allows him to seek out more opportunity and also to base his process solely on the data as opposed to human bias which can be faulty.

BAGGOT INVESTMENT PHILOSOPHY

Most stock market participants suffer from behavioural biases which lead to poor investment outcomes, in relative terms. We believe that a disciplined and diversified rules-based approach to stock picking will reduce the potential to make decisions being made due to behavioural biases.

Our belief is that share outperformance is commonly driven by factors or traits, such as Financial Stability, Value, Growth, Momentum and Quality which we try to identify and harness using a Quantitative approach to stock selection. At Baggot, we rely on factors that have proven over long periods of time to drive investment returns. We also believe that strong diversification normally helps to manage risk and enhances the potential to generate gains.

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