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Altrinsic Global Equities Trust - Monthly Report May 2017

The Altrinsic Global Equities Trust (the Trust) gained 4.0% in May, outperforming the 2.8% increase by the MSCI All Country World ex-Australia Index. The financial, telecommunications, and materials sectors contributed the most to return, while information technology, industrials, and consumer discretionary detracted from performance.

  • Stock-specific factors drove outperformance in financials. In particular, Indian bank ICICI has begun to show stability in its credit losses and rising margins, which helped boost its share price, while Willis Towers Watson announced strong Q1 results after a disappointing 2016.
  • In telecommunications, Vodafone delivered robust results that showed significant cost cutting and an improving European business. Also, its better-than-expected guidance included sufficient free cash flow to cover dividend payments, alleviating concerns.
  • In materials, Kinross Gold and Linde were the largest contributors to outperformance. Kinross Gold’s stock price rose along with higher gold prices, while Linde showed progress towards its merger agreement with Praxair.
  • Although Nintendo outperformed on strong demand for its Switch console, the technology sector lagged as Sabre and Thomson Reuters were down slightly in an up market.
  • In industrials, General Electric (GE) has largely completed its reorganization and asset rationalization and is focusing on operational execution, however, its end markets remain mixed with particular headwinds in oil and gas.
  • Consumer discretionary holding Regal Entertainment declined on concerns about shorter theatrical release windows and box office volatility. We believe the process that establishes movie release windows will remain stable and Regal will use internal drivers to increase economic returns.
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