-
-
First bought
Since fund inception, January 2019.
United Kingdom, Professional
Change
This is a marketing communication. Please refer to the Fund Prospectus and KIID and / or offering documents before making any final investment decisions. Please refer to the risks section at the bottom of this page.
-
-
What is it?
In our view, Deere has a strong management team. John May has been part of Deere’s senior management team since 2012, its CEO since November 2019 and Chairman since May 2020. Under his leadership, Deere has reorganised and decentralised operations to become solutions-oriented rather than product-oriented with a greater focus on what is important to their customers. Deere has reinvested capital wisely into innovation that reduces the environmental impact of Deere’s machinery while also benefiting the end client. Deere has developed less fuel-intensive machines, more targeted and accurate spraying technology and increased use of software and artificial intelligence to improve agricultural yield and reduce pesticide and fertiliser use. In addition, Deere’s ‘Leap Ambitions’ goals by 2026 and 2030, focused around its financial and sustainable outcomes, illustrate its long-term mindset.
-
-
-
Why do we own it?
We view Deere1 as a high-quality company, with a strong competitive moat driven by an extensive dealer network, best-in-class innovation, and a strong brand. Deere has a history of generating high and stable returns on equity (ROE) and we believe their investments in improving their agricultural technology differentiation have the potential to help maintain high returns into the future. We have a positive view of Deere’s capital allocation, which has prioritised maintaining an ‘A’ rated balance sheet, supporting a healthy dividend and share buyback program, and reinvesting in the business to drive organic growth and inorganic growth through strategic bolt-on M&A. -
Key points
- An attractive business with strong brand recognition and technological advantage helping to protect its competitive moat.
- Deere has transitioned from traditional machinery to machinery and software, showcasing the firm’s adaptability and focus on long-term growth.
- Deere is a superior steward that is investing in technology to support positive environmental outcomes, while also generating financial benefits for Deere and its customers.
CONSIDER THE RISKS
Investors should consider the risks that may impact their capital, before investing. The value of your investment may fluctuate from the time of the original investment. Please refer to the risks section enclosed. A decision to invest should take account of all the characteristics and objectives described in the prospectus and KIID and/or offering documents. Please refer to the sustainability related disclosures for information on the commitments of the portfolio: https://www.wellington.com/en/legal/sfdr.
1Sources: Please note that all figures mentioned in this document have been taken from this report: Deere & Company At A Glance 2023
Risks
Capital: Investment markets are subject to economic, regulatory, market sentiment and political risks. All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment. The Fund may experience a high volatility from time to time. | Concentration: Concentration of investments within securities, sectors or industries, or geographical regions may impact performance. | Currency: The value of the Fund may be affected by changes in currency exchange rates. Unhedged currency risk may subject the Fund to significant volatility. | Emerging Markets: Emerging markets may be subject to custodial and political risks, and volatility. Investment in foreign currency entails exchange risks. | Equities: Investments may be volatile and may fluctuate according to market conditions, the performance of individual companies and that of the broader equity market. | Hedging: Any hedging strategy using derivatives may not achieve a perfect hedge. | Sustainability: An environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.
Please refer to the fund prospectus and KIID for a full list of risk factors and pre-investment disclosures