CT Global Managed Portfolio (CMPI/CMPG)

Disclaimer

This is a non-independent marketing communication commissioned by Columbia Threadneedle Investments. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Increased geographical diversification and a punchier approach make CMPI/CMPG a new proposition.

Overview

The managers of CT Global Managed Portfolio (CMPI/CMPG), Adam Norris and Paul Green, have significantly increased the concentration and global diversification across both Portfolios of investment companies since taking over in June 2025, seeking to create leaner portfolios with punchier performance potential. By the end of last year, the number of holdings in both the growth and income share classes decreased to 30 from 39 and 38.

In recent months, the managers have increased exposure to equities. Although mindful of potential headwinds such as higher oil prices due to ongoing tensions in the Middle East, Adam and Paul are constructive on the outlook for corporate earnings. They highlight supportive policy measures across several regions, including the ‘One Big Beautiful Bill’ in the US, the stimulus package in Germany, and likely steps in China to bolster economic growth.

Asia and emerging market equities are one area where Adam and Paul have notably been adding, given tailwinds such as attractive valuations, strong earnings growth potential, and a weakening US dollar. This includes, for example, the introduction of Invesco Asia Dragon (IAD) into both the CMPI and CMPG portfolios. They have also initiated a new position in Invesco Global Equity Income (IGET) in both portfolios, further contributing to global diversification.

Conversely, they have reduced exposure to UK equities. While these trade at a discount to peers in other developed markets, they believe this reflects their lower growth potential. The allocation to private equity has also been reduced, notably in CMPG’s portfolio. This was, however, driven by idiosyncratic reasons, as Adam and Paul have trimmed their position in HgCapital Trust (HGT), a private equity strategy focussing on software and tech-enabled services companies, amid concerns that these types of businesses may be disrupted by artificial intelligence.

Analyst’s View

In our previous note, we highlighted Adam and Paul’s plans to increase global diversification and build higher-conviction portfolios as exciting developments, and we note that significant progress has been made towards this commitment. While we believe it is too early to assess the effectiveness of these changes on Performance, we continue to think they could lead to stronger returns over time, as both share classes should be able to benefit from a broader opportunity set through selectively curated investment companies.

In addition, we believe that both CMPG and CMPI offer exposure to attractive growth themes, including technology and emerging-market equities. In particular, we view the managers’ decision to continue adding to emerging markets as promising, given their attractive valuations and earnings growth potential. We also believe that both portfolios are well positioned to benefit from a potential recovery in alternative assets, with several investment companies specialising in these areas trading at wide Discounts.

Finally, we believe that CMPI could be particularly attractive to income-focussed investors, offering a Dividend yield of c. 6.1%. This compares favourably with many equity indices and equity income-focussed investment companies. It is also higher than the yields available on long-dated gilts, such as 10- and 20-year gilts, while offering greater potential for capital appreciation than fixed-income instruments. That said, we note that CMPI is currently trading at a premium of c. 3%, which could amplify losses should this narrow.

Bull

• Higher-conviction approach and broader global diversification could lead to stronger returns
• Both share classes offer exposure to promising growth themes
• CMPI offers an attractive dividend yield from diversified sources

Bear

• Ongoing geopolitical tensions in the Middle East could prove a headwind for risk assets
• CMPI is currently trading at a premium to NAV, which may exaggerate losses if the premiums narrow
• Trust of investment companies approach results in high overall cost of investment