We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Strategy in December 2020.

Notes: 1. WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) have the same Portfolio Managers and investment team, the same investment objective and use the same philosophy and strategy as the WCM Quality Global Growth Strategy. 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 WCM Quality Global Growth Strategy Composite (the Composite) to provide a better understanding of how the team has managed this strategy over a longer period. 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 in four 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).
• WCM Quality Global Growth (Managed Fund) (hedged).

The portfolio delivered a return of 0.70% during the month, above the benchmark MSCI All Country World (ex-Australia) Index return of 0.07%. The portfolio has delivered returns in excess of the benchmark over the previous one, three, six and 12 month periods, as well as over three years and since inception.

A turbulent year ended on a positive note in December. Global equites were initially buoyed by the roll out of COVID-19 vaccines in the US and Europe. The final week of the year saw a further boost when President Trump approved a new fiscal relief bill and an agreement was reached on the key terms of the UK’s withdrawal from the European Union.

Economic data remains mixed heading into 2021 as ongoing expansionary global fiscal and monetary policies continue to compete with the negative impact of the COVID-19 induced lockdowns. December’s market rise was broad based with growth, value, cyclical and smaller capitalisation stocks all delivering strong returns. Regionally, emerging market and Japanese equities continued to set the pace during the month completing the quarter as the top performing regions. The stronger Australian dollar (AUD) in December was again a headwind for unhedged portfolios. Having dipped below US60c during March 2020, the AUD ended the year at close to US77c.

In December the better performing stocks in the portfolio came from a range of sectors, including two financial sector holdings, US private bank First Republic Bank and Asian insurer AIA Group. Payments platform provider Adyen, electronic design automation company Synopsys and regulated exchange operator Intercontinental Exchange also made strong contributions to relative performance. Athletic apparel retailer Lululemon Athletica and communications infrastructure group Crown Castle were two portfolio holdings which lagged the market during the month.

2020 was challenging for investors following a predominantly top-down macroeconomic focused investment process. Firstly, the COVID-19 induced global recession was outside the forecasting scope of even the best macroeconomic researchers. Secondly, and arguably more challenging for top-down investors, is retrospectively trying to rationalise how a year that included so much ‘bad’ news ended with global equities recording returns in excess of 15% with many benchmark indices reaching all-time highs. While the investment team at WCM does not engage in macroeconomic forecasting, it is always alert to investment opportunities presented by economic and market volatility. This was very evident in 2020, particularly towards the end of the March quarter, when markets reached their lows for the year. Several high-quality companies (i.e. those with an expanding economic moat) were purchased at attractive price levels during this period which subsequently made a material contribution to the portfolio’s outstanding returns for the remainder of the year.