We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in February 2025.
The Strategy1 delivered a return of -2.65% during the month, compared with the benchmark MSCI All Country World Index return of -0.39%. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over one, three, five and 10 years, and since inception.
Strategy Update
Global equities were marginally weaker in February, primarily driven by the negative sentiment and uncertainty surrounding the US administration’s new tariff policies. February business and corporate sentiment surveys in the US, coupled with data showing a decline in personal consumption in January, were other factors weighing on markets. Despite this, it was a better month for both news and market performance in Europe and China. The former benefitted from increasing confidence that a ceasefire between Russia and Ukraine may be imminent and the latter from continuing optimism over the potential for DeepSeek’s artificial intelligence model. The positive return from Chinese equities was the major contributor to the stronger performance of emerging versus developed markets in February. In terms of sectors, the better performers included financials (banks and insurance) and healthcare and at a factor level, value beat growth and quality. A weaker Australian dollar in February partially offset the equity market decline for unhedged portfolios.
Stock selection in the information technology and consumer staples sectors was the main contributor to the portfolio’s relative underperformance in February. In terms of the sector allocation effect, the below benchmark exposure to communication services and consumer discretionary stocks and overweight position in healthcare contributed positively to relative performance. Meituan is one of the portfolio’s three consumer discretionary holdings. It operates the dominant food delivery service in China, boasting more than 70% market share and an attractive profitability profile. Its moat comes from scale, density and network effects. These advantages are being leveraged to grow its other promising businesses, including ‘instashopping’ and couponing, which point to a positive moat trajectory in the future.
Understanding the investment process when researching money management firms is a key part of an investor’s due diligence. In the case of WCM Investment Management, its process is easily described but very difficult to replicate. It begins with analysis and qualification of portfolio candidates. This involves identifying great businesses based on positioning (positive tailwinds), competitive advantage (durable, strengthening economic moats) and corporate culture (ones that value great people and sustain the economic moat). Portfolio construction then provides a high level of risk control through thoughtful diversification, while best capitalising on the expected growth of these great businesses. The final portfolio is built with the goal of solid participation in rising markets and ‘losing less’ in declining ones, highlighted in the strong, positive long-term returns of the WCM Quality Global Growth Strategy Composite since 2008.
Notes: 1. WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) have the same Portfolio Managers and investment team, the same investment principles, philosophy, strategy and execution of approach as those used for the WCM Quality Global Growth Strategy however, it should be noted that due to certain factors including, but not limited to, differences in cash flows, management and performance fees, expenses, performance calculation methods, and portfolio sizes and composition, there may be variances between the investment returns demonstrated by each of these portfolios and the WCM Quality Global Growth Strategy Composite (the Composite) in the future. As WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) have only been in operation for a relatively short period of time, this table makes reference to the Composite to provide a better understanding of how the team has managed this strategy over a longer period. Performance is net of fees and includes the reinvestment of dividends and income. 2. Composite inception date is 31 March 2008. 3. Benchmark refers to the MSCI All Country World Index (with gross dividends reinvested reported in Australian Dollars and unhedged). 4. Value Added equals Composite Performance minus Benchmark performance. 5. Annualised.
DISCLAIMER: AGP Investment Management Limited (AGP IM) (ABN 26 123 611 978, AFSL 312247) is a wholly owned subsidiary of Associate Global Partners Limited (AGP) (ABN 56 080 277 998), a financial institution listed on the ASX (APL). AGP IM has prepared this material for general information purposes only for WCM Global Growth Limited, a listed investment company (ASX: WQG).
AGP IM is the responsible entity for WCM Quality Global Growth Fund - Active ETF (ARSN 625 955 240) (ASX: WCMQ) and WCM Quality Global Growth Fund (Managed Fund) (ARSN 630 062 047).
AGP International Management Pty Ltd (AIML) (ABN 33 617 319 123) is the investment manager for WQG and is an authorised representative of AGP IM. WCM Investment Management, LLC (WCM) is the underlying manager and applies its WCM Quality Global Growth Equity Strategy (the Strategy), excluding Australia, in managing each of WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund)(the Funds). WCM does not hold an AFSL. WQG and AIML are part of the AGP Group.
Any references to ‘We’, ‘Our’, ‘Us’, or the ‘Team’ used in the context of the portfolio commentary, is in reference to WCM Investment Management, as investment manager for the Strategy or AIML as investment manager for WQG.
Even though the Strategy, excluding Australia, is applied to each of WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) certain factors including, but not limited to, differences in cash flows, fees, expenses, performance calculation methods, portfolio sizes and composition may result in variances between the investment returns for each portfolio. The performance of the Strategy is not the performance of the portfolios and is not an indication of how WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) would have performed in the past or will perform in the future.
The material should not be viewed as a solicitation or offer of advice or services by WCM, AGP or AGP IM. It does not contain investment recommendations nor provide investment advice. It does not take into account the objectives, financial situation or needs of any particular individual. Investors should, before acting on this material, consider the appropriateness of the material.
Neither AGP IM, AGP, their related bodies corporate, entities, directors or officers guarantees the performance of, or the timing or amount of repayment of capital or income invested in the Funds or that the Funds will achieve its investment objectives. Past performance is not indicative of future performance.
Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided that the positions will remain within the portfolio of the funds. Any securities identified and described are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.
Investors should seek professional investment, financial or other advice to assist the investor determine the individual tolerance to risk and needs to attain a particular return on investment. In no way should the investor rely on information contained in this material.
Investors should read the Product Disclosure Statements (PDS) of the Funds or any relevant offer document in full before making a decision to invest in these products.
