At the end of April, the new corporate governance rankings were issued and applied to the fund. There was a rotation of 47 companies which account for 32% of the AUM within the portfolio, with an ensuing change in the sector allocation. Most notably, the Healthcare sector now accounts for an overweight position, while the overexposure to both Information Technology and Consumer Staples was reduced.

Being underweight the Financials and Energy sectors, which underperformed during the month, added the most significant portion of the alpha in May. The overweight allocation to the Consumer Staples sector proved to be the biggest detractor in terms of relative performance.

As for individual stocks, the fund held some big-name winners including Adobe, Apple and Ebay. Other big winners included Dollar Tree, Fortinet and Estee Lauder. While the fund again missed out on another big gain from Facebook, it also evaded some big-name losses in Coty Inc and Under Armour.

GBI – Good Governance Fund May 2020 monthly report

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