IN FOCUS
Liontrust Global Innovation
Manager Clare Pleydell-Bouverie says that following “ gutwrenching periods of plummeting valuations ”, this may be a good time to buy disruptive growth stocks
The word “ innovation ” doesn ’ t typically have negative connotations , but last year wasn ’ t kind to companies that aimed to change the established order by doing something differently . Clare Pleydell-Bouverie , manager on
Liontrust Global Innovation , was even more blunt : “ These are gut-wrenching periods of plummeting valuations , where the excess capital that had been available to questionable projects and companies disappears .” Liontrust Global Innovation , a high-growth portfolio that invests in companies with innovative ideas and disruptive business models , fell 28.8 % last year , compared with losses of 8.1 % from its MSCI ACWI benchmark and
11.1 % from its IA Global sector . However , Pleydell-Bouverie said that such falls represent the greatest opportunity to investors , as buying in when valuations are depressed “ lays the foundation for exceptional returns ”. “ In 2020 , multiples expanded indiscriminately and have since contracted just as indiscriminately ,” she explained . “ But when this process is complete , we expect fundamentals , not multiples , to drive stock returns .” She added that despite the difficult economic backdrop , innovation is “ steaming ahead ” in many ways . While higher interest rates mean unprofitable start-ups struggle to
/ 46 / trustnet . com