We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Strategy (the Strategy) for May 2026.
The Strategy1 delivered a return of 4.50% during the month, outperforming the benchmark MSCI All Country World Index (the Benchmark) return of 5.13%. The Strategy has delivered returns in excess of the Benchmark over three, five, ten years and since inception.
Strategy Update
Global equity markets extended their gains through May, with investor enthusiasm for the Artificial Intelligence (AI) investment cycle remaining the dominant driver. Rising optimism towards month-end around a potential U.S-Iran agreement contributed to a meaningful pullback in oil prices and, consequently, a softening in global bond yields. Economic data released during the month, however, presented a mixed picture for markets. While growth remained resilient and supportive of corporate earnings, inflation pressures showed little sign of abating. Earnings results for the March quarter were particularly strong, rising approximately 30% year-on-year in the U.S and around 40% across Asia. Korean and Taiwanese markets were standout performers, rising 33% and 14% respectively, reflecting their outsized exposure to the AI theme. In keeping with the AI theme, Information Technology was the month’s best-performing sector, while growth factors outpaced value. The Australian dollar was relatively unchanged in May, trading within a narrow range throughout.
Sector allocation was the primary contributor to the portfolio’s underperformance versus the market in May. The most significant drag came from the portfolio’s underweight position in Information Technology, the month’s best-performing sector, notwithstanding its 26.18% month-end portfolio weighting. Above-benchmark exposures to both Industrials and Real Estate also weighed on relative returns. Partially offsetting these headwinds, the absence of any allocation to Energy, Consumer Staples and Utilities proved beneficial from a relative return perspective. At the stock selection level, holdings within Industrials, Health Care and Consumer Discretionary contributed positively, while Financials, Communication Services and Materials were the main areas of weakness.
The portfolio has an overweight position relative to the market in the Health Care sector, with holdings such as Cardinal Health Inc, Illumina Inc, Vertex Pharmaceuticals Inc and Switzerland based Novartis AG. Under the leadership of CEO Vas Narasimhan, Novartis has transformed from a sprawling conglomerate into a pure-play pharmaceutical compounder, spinning-off its Alcon and Sandoz divisions, disposing of its veterinary medicine division and terminating circa 70 misaligned Phase 2 pharmaceutical research and development projects to narrow its focus on selected therapeutic areas where it has a genuine right to win. The result is “best-in-class” or “first-in-class” assets across each of its chosen categories, accompanied by arguably the best pipeline in European large-cap pharmaceuticals. WCM Investment Management (WCM) believes investors are significantly underappreciating these positive changes and Novartis’ earnings trajectory.
A standout feature of the WCM Quality Global Growth Strategy is its exposure to sectors which traditionally have not been associated with ‘quality’ and ‘growth’. Examples of these sectors and current portfolio holdings include aerospace engines (Rolls Royce), non-US defence (BAE Systems) and gas turbines (Siemens Energy). These sectors have historically been associated with poor capital allocation, cyclical pain and weak returns and as such have been easy to put into the ‘stay away’ pile. WCM however identified that the post-COVID era presented a new quality environment and identified that these sectors appeared poised for long cycle inflections. In WCM’s assessment, what differentiated aerospace, defence and gas turbines went beyond signals of secular tailwinds. The companies identified had implemented critical cultural and operational changes during recent downcycles. They had a new focus on derisked contract underwriting and aggressive pursuit of long-term cash flow streams. Following detailed research, WCM built conviction around a genuine inflection in trajectory and the belief that these companies presented compelling long- term investment opportunities.
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 (the Strategy) 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 Strategy 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. Strategy 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 Strategy 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 Investment Management, LLC is exempt from the requirement to hold an Australian Financial Services License under ASIC Corporations (Repeal and Transitional) Instrument 2016/396 and is regulated by the U.S. Securities and Exchange Commission under U.S. law, which differs from Australian law. 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.
