We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth strategy in April 2020.
The strategy is conveniently available in three investment structures to accommodate the differing preferences of individual investors. You can read the full investment update for each of these products on the links below:
- WCM Global Growth Limited (ASX:WQG) (LIC).
- WCM Quality Global Growth (Quoted Managed Fund) (ASX:WCMQ) (ETMF).
- WCM Quality Global Growth (Managed Fund) (unlisted managed fund).
The strategy outperformed the benchmark MSCI All Country World (ex-Australia) Index during April. The long-term performance of the strategy remains strong, with returns exceeding that of the benchmark over 1 month, 3 months, 6 months, 1 year, 2 years and since inception.
1. Portfolio performance is calculated after investment management and performance fees are paid. 2. Benchmark refers to the MSCI All Country World Index ex-Australia USD Gross Total Return Index reported in AUD and unhedged. Returns include the reinvestment of income. Past performance is not indicative of future results.
The performance of the three vehicles may vary slightly over the short term but over the medium and long term they will share a strong positive correlation.
Global markets rebounded sharply in April with all major markets higher, led by the US. The S&P 500 recorded its biggest increase since January 1987. These returns were achieved against a backdrop of pending economic conditions that many market commentators are now comparing with the Great Depression. The primary driver of the recovery in equity markets from their March lows was the massive liquidity injection from central banks and the unprecedented levels of fiscal stimulus from global governments. Investors were also heartened by signs that stringent lockdown restrictions are slowing the spread of the COVID-19 virus. At a regional level, developed markets outperformed emerging, large capitalisation indices bettered small, and growth and quality factors eclipsed value. The Australian dollar rallied strongly during the month dampening the gains for unhedged portfolios like the WCM Quality Global Growth strategy.
The fear of a long-lasting health crisis and the inevitable resulting global economic crisis has many investors asking: where to next from an investment perspective? Countless hours of media coverage and Wall Street analysis is being spent speculating on when a vaccine might be discovered, how long the lockdowns may last, and whether or not there will there be a second wave. The research team at WCM Investment Management (WCM) does not lay claim to having any unique skills to help answer these questions. Their focus during this period of heightened uncertainty has been on capitalising on the attractive entry levels the market volatility has presented for new long-term opportunities. Each of these positions, including those mentioned above, meet the WCM criteria of an expanding economic moat and corporate culture aligned to this moat trajectory.