Liberty All-Star Equity Fund December 2023 Monthly Update
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Examining the Liberty All-Star Equity Fund's performance metrics, we observe a positive monthly performance with the NAV increasing from $6.40 to $6.75. This reflects a 5.47% performance increase for the month, outpacing the market price performance of 3.40%. The year-to-date figures are also robust, with the NAV and market price yielding 26.12% and 23.39%, respectively. These figures are significant as they indicate the fund's effectiveness in delivering shareholder value relative to market volatility.
Furthermore, the fund's discount widened from -3.6% to -5.5%, suggesting a larger gap between market price and NAV. This could attract investors seeking potential bargains in the closed-end fund space. However, investors should be cautious as a persistent discount might also reflect market sentiment regarding the fund's management or its asset allocation.
The sector breakdown reveals a balanced exposure with Financials and Information Technology sectors each constituting 21.9% of the equity portfolio. This diversification can be beneficial in mitigating sector-specific risks. Additionally, the fund's introduction of O'Reilly Automotive, Inc. and liquidation of Halliburton Co. holdings might indicate strategic shifts to capitalize on market trends or to avoid sectors facing headwinds.
From a market research perspective, the Liberty All-Star Equity Fund's top 20 holdings, which account for 34.6% of the equity portfolio, include high-performing and influential companies such as Microsoft, Alphabet and Amazon. The presence of these market leaders in the fund's portfolio could be a key factor in its strong performance, as they are often considered bellwethers for the broader market and the technology sector.
Moreover, the fund's investment approach, which combines value and growth styles, may appeal to a wide range of investors seeking both stability and growth potential. This strategy, which involves selecting investment managers with consistent philosophies and above-average long-term results, is noteworthy as it suggests a methodical and performance-oriented fund management.
It's also important to highlight that the fund is highly invested with 96.7% of its assets in equities, indicating a confident stance in the stock market despite potential market fluctuations. This high investment percentage underscores a commitment to equity exposure, which is a double-edged sword that can lead to significant gains or losses.
An economist's viewpoint would focus on the macroeconomic implications of the fund's performance. The year-to-date performance significantly outstripping the market suggests that the fund's managers have successfully navigated the economic landscape, possibly capitalizing on the post-pandemic recovery or other macroeconomic trends.
The sector allocation reflects a strategic emphasis on sectors that are pivotal to economic growth, such as Information Technology and Financials. The fund's performance in these sectors could be indicative of broader economic trends, such as digital transformation and financial services' resilience or growth.
Additionally, the fund's international diversification, with holdings like Sony Group Corp., adds a layer of complexity to its risk profile, as it introduces exposure to global market dynamics and currency fluctuations. This international exposure is a double-edged sword, offering both diversification benefits and additional risk factors.
Liberty All-Star Equity Fund
Ticker: USA
Monthly Update, December, 2023
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. | 3.8 % |
2 | Alphabet, Inc. | 3.1 % |
3 | Amazon.com, Inc. | 2.5 % |
4 | UnitedHealth Group, Inc. | 2.5 % |
5 | NVIDIA Corp. | 2.3 % |
6 | Visa, Inc. | 2.1 % |
7 | ServiceNow, Inc. | 2.1 % |
8 | S&P Global, Inc. | 1.6 % |
9 | Charles Schwab Corp. | 1.4 % |
10 | Capital One Financial Corp. | 1.4 % |
11 | Sony Group Corp. | 1.4 % |
12 | Adobe, Inc. | 1.4 % |
13 | Salesforce, Inc. | 1.3 % |
14 | Danaher Corp. | 1.3 % |
15 | Autodesk, Inc. | 1.2 % |
16 | Ecolab, Inc. | 1.2 % |
17 | Ferguson PLC | 1.1 % |
18 | Fresenius Medical Care AG | 1.0 % |
19 | SYSCO Corp. | 1.0 % |
20 | Micron Technology, Inc. | 0.9 % |
Holdings are subject to change. | ||
Monthly Performance: | |||
Performance | NAV | Market Price | Discount |
Beginning of month value | -3.6 % | ||
End of month value | -5.5 % | ||
Performance for month | 5.47 % | 3.40 % | |
Performance year-to-date | 26.12 % | 23.39 % | |
Net Assets at Month-End ($millions) | |
Total | |
Equities | |
Percent Invested | 96.7 % |
Sector Breakdown (% of equity portfolio)* | |
Financials | 21.9 % |
Information Technology | 21.9 % |
Health Care | 13.5 % |
Consumer Discretionary | 12.6 % |
Industrials | 8.2 % |
Materials | 5.7 % |
Communication Services | 5.6 % |
Consumer Staples | 5.0 % |
Energy | 2.1 % |
Real Estate | 2.0 % |
Utilities | 1.5 % |
Total Market Value | 100.0 % |
*Based on Standard & Poor's and MSCI Global Industry Classification Standard (GICS). | |
New Holdings
O'Reilly Automotive, Inc.
Holdings Liquidated
Halliburton Co.
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 2023 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 December 31, 2023 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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