We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in April 2023.
The Strategy1 delivered a return of 2.20% during the month, compared with the benchmark MSCI All Country World Index return of 2.85%. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over five and 10 years, and since inception.
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.
The Strategy is conveniently available via four investment structures to accommodate the differing preferences of individual investors. You can find the monthly investment update under ‘More Information’ for each of these products on the links below:
- WCM Global Growth Limited (ASX:WQG)
- WCM Quality Global Growth Fund (Quoted Managed Fund) (ASX:WCMQ)
- WCM Quality Global Growth Fund (Managed Fund) (Unhedged)
- WCM Quality Global Growth Fund (Managed Fund) (Hedged)
Global equity markets made a positive start to the second quarter of 2023. Although reported economic data was mixed, on balance it surprised on the upside. The pace and scale of central bank tightening had spiked fears of a deep global recession but to date, economic activity has remained relatively resilient. This coupled with the continued downtrend in headline inflation has been supportive of risk assets, including equities. While markets are still discounting another 0.25% increase in interest rates in May by the US Federal Reserve (the Fed), the expectation is the Fed will then pause and be cutting rates towards the end of the year. Chinese economic data released during the month was also positive, with first quarter GDP growth of 4.5%, ahead of market expectations. However, continued geopolitical tensions dragged the Chinese equity market lower, in turn, contributing to the underperformance of emerging market equities relative to developed markets.
At a sector level, Energy and Consumer Staples were among the better performers with Information Technology and Consumer Discretionary lagging. In terms of factors, the trends continued from March with large capitalisation stocks and value outperforming small capitalisation stocks and growth respectively.
The Australian dollar was weaker in April, adding to the returns of unhedged portfolios. The portfolio’s small underperformance in April was primarily due to stock selection. While stock selection was positive in the Consumer Discretionary, Industrials and Materials sectors, it was outweighed by the underperformance of the Information Technology, Financials and Health Care holdings.
Portfolio activity has been relatively quiet year-to-date with Cambridge, England-based pharmaceutical company, AstraZeneca the only new position added. AstraZeneca meets the criteria the investment team at WCM Investment Management seeks in all portfolio holdings, i.e., a positive moat trajectory supported by a strong, well aligned corporate culture. AstraZeneca’s current leadership has led a dramatic cultural shift which has included reorienting the company to be more focused on early-stage science, thereby improving its success rate in drug development. That effort has helped turn what was once an unproductive research and development organisation into one of the most prolific in the industry. AstraZeneca is now positioned to reap the attendant benefits of this transformation with multiple mega blockbusters, particularly in oncology.
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 (Quoted Managed Fund) (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 CIML 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 CIML 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.