Liberty All-Star Equity Fund January 2024 Monthly Update
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Insights
The Liberty All-Star Equity Fund's January 2024 update provides a snapshot into the fund's performance and asset allocation, which is of significant interest to current and potential investors. The fund adopts a large-cap core strategy, blending value and growth investment styles, which is a common approach aimed at balancing risk and capitalizing on market opportunities. The top 20 holdings, representing 35.1% of the equity portfolio, include major companies like Microsoft, Alphabet and NVIDIA, indicating a concentration in high-cap tech stocks. This concentration could expose the fund to sector-specific risks but may also offer the potential for robust returns, given the tech sector's historical growth trajectory.
Notably, the fund's net asset value (NAV) decreased slightly by the end of the month, but the market price outperformed the NAV, reducing the discount from 5.5% to 1.9%. This suggests a positive market sentiment towards the fund, potentially driven by the performance of its holdings or a change in investor perceptions. The performance figures, with a month-to-month increase of 1.83% in NAV and 5.64% in market price, indicate a strong start to the year, which could attract investor attention.
Investors should also consider the fund's sector breakdown, with significant allocations to financials and information technology. This allocation strategy could reflect broader market trends or the fund managers' outlook on these sectors' performance potential. The liquidation of SAP SE and the addition of CVS Health Corp and Quest Diagnostics could signify strategic rebalancing, which may be aligned with shifting market dynamics or an adjustment in the fund's long-term strategy.
The performance of the Liberty All-Star Equity Fund is reflective of broader market conditions and investor sentiment. The fund's sector breakdown shows a diversified yet selective approach, with financials and information technology leading the allocations. This distribution is indicative of the fund's attempt to leverage the growth potential of the tech sector while also seeking the stability offered by financial institutions.
Moreover, the update highlights a nearly full investment of assets (99.1%), which could be seen as a sign of an active management strategy seeking to maximize returns from market movements. The fund's investment approach, combining value and growth managers, aims to harness the strengths of both investment styles. This could resonate well with investors who prefer a balanced portfolio with a blend of stability and growth potential.
Changes in the holdings, such as the acquisition of CVS Health Corp and Quest Diagnostics, may suggest a pivot towards healthcare, which could be a strategic move considering the sector's resilience and potential growth. The liquidation of SAP SE might reflect a reassessment of the technology sector or a specific shift within the fund's strategy. The fund's performance data and asset allocation changes can serve as a barometer for investor confidence and market trends, offering insights into the economic and sectoral shifts that may influence investment decisions.
The Liberty All-Star Equity Fund's monthly performance data provides an indication of the economic environment in which the fund operates. The fund's discount narrowing from 5.5% to 1.9% suggests an improved investor outlook, which could be attributable to macroeconomic factors such as market stability, interest rate expectations, or sector-specific developments. A discount narrowing can also indicate that the market is adjusting its valuation of the fund closer to its net asset value, which could be a response to the fund's performance or broader economic trends.
Furthermore, the fund's substantial investment in equities (99.1%) reflects a confident stance on the equity market's potential, despite the inherent volatility. This high level of investment in equities during uncertain economic times could be a double-edged sword, potentially leading to higher returns during market upswings but also exposing investors to greater risk during downturns.
The sector breakdown, with a significant portion in financials and information technology, may mirror the current economic narrative that emphasizes digital transformation and the central role of financial institutions in economic recovery. The allocation to healthcare could be a strategic response to the sector's increasing importance in the post-pandemic landscape. Overall, the fund's performance and strategic decisions provide a window into the economic forces at play and the fund managers' responses to these dynamics.
Liberty All-Star Equity Fund
Ticker: USA
Monthly Update, January, 2024
Investment Approach:
Fund Style: Large-Cap Core
Fund Strategy: Combines three value-style and two growth-style investment managers. Those selected demonstrate a consistent investment philosophy, decision making process, continuity of key people and above-average long-term results compared to managers with similar styles.
Investment Managers:
Value Managers:
Aristotle Capital Management, LLC
Fiduciary Management, Inc.
Pzena Investment Management, LLC
Growth Managers:
Sustainable Growth Advisers, LP
TCW Investment Management Company
Top 20 Holdings at Month-End | ||
( | ||
1 | Microsoft Corp. | 3.9 % |
2 | Alphabet, Inc. | 3.1 % |
3 | NVIDIA Corp. | 2.6 % |
4 | Amazon.com, Inc. | 2.5 % |
5 | UnitedHealth Group, Inc. | 2.5 % |
6 | Visa, Inc. | 2.1 % |
7 | ServiceNow, Inc. | 2.0 % |
8 | S&P Global, Inc. | 1.6 % |
9 | Capital One Financial Corp. | 1.4 % |
10 | Sony Group Corp. | 1.4 % |
11 | Adobe, Inc. | 1.4 % |
12 | Salesforce, Inc. | 1.4 % |
13 | Danaher Corp. | 1.3 % |
14 | Charles Schwab Corp. | 1.3 % |
15 | Autodesk, Inc. | 1.3 % |
16 | Ecolab, Inc. | 1.2 % |
17 | SYSCO Corp. | 1.1 % |
18 | Ferguson PLC | 1.0 % |
19 | Berkshire Hathaway, Inc. | 1.0 % |
20 | Citigroup, Inc. | 1.0 % |
Holdings are subject to change. | ||
Monthly Performance: | |||
Performance | NAV | Market Price | Discount |
Beginning of month value | -5.5 % | ||
Distributions (Ex-Date January 18th) | |||
End of month value | -1.9 % | ||
Performance for month | 1.83 % | 5.64 % | |
Performance year-to-date | 1.83 % | 5.64 % | |
Net Assets at Month-End ($millions) | |
Total | |
Equities | |
Percent Invested | 99.1 % |
Sector Breakdown (% of equity portfolio)* | |
Financials | 22.1 % |
Information Technology | 21.7 % |
Health Care | 14.0 % |
Consumer Discretionary | 12.5 % |
Industrials | 8.1 % |
Communication Services | 5.6 % |
Materials | 5.5 % |
Consumer Staples | 5.2 % |
Energy | 2.0 % |
Real Estate | 1.9 % |
Utilities | 1.4 % |
Total Market Value | 100.0 % |
*Based on Standard & Poor's and MSCI Global Industry Classification Standard (GICS). |
New Holdings
CVS Health Corp.
Quest Diagnostics, Inc.
Holdings Liquidated
SAP SE
The net asset value (NAV) of a closed-end fund is the market value of the underlying investments (i.e., stocks and bonds) in the Fund's portfolio, minus liabilities, divided by the total number of Fund shares outstanding. However, the Fund also has a market price; the value at which it trades on an exchange. If the market price is above the NAV the Fund is trading at a premium. If the market price is below the NAV the Fund is trading at a discount.
Performance returns for the Fund are total returns, which includes dividends, and are net of management fees and other Fund expenses. Returns are calculated assuming that a shareholder reinvested all distributions. Past performance cannot predict future investment results.
Performance will fluctuate with changes in market conditions. Current performance may be lower or higher than the performance data shown. Performance information shown does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. Shareholders must be willing to tolerate significant fluctuations in the value of their investment. An investment in the Fund involves risk, including loss of principal.
Sources of distributions to shareholders may include ordinary dividends, long-term capital gains and return of capital. The final determination of the source of all distributions in 2024 for tax reporting purposes will be made after year end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during its fiscal year and may be subject to changes based on tax regulations. Based on current estimates a portion of the distributions consist of a return of capital. These estimates may not match the final tax characterization (for the full year's distributions) contained in shareholder 1099-DIV forms after the end of the year.
All data is as of January 31, 2024 unless otherwise noted.
Liberty All-Star® Equity Fund
1-800-241-1850
www.all-starfunds.com
libinfo@alpsinc.com
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SOURCE Liberty All-Star Equity Fund
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