WCM Quality Global Growth June 2021 NTA Statement & Portfolio Update

We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in June 2021.

The Strategy1 delivered a return of 6.2% during the month. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over three, five and ten 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 read the full investment update for each of these products on the links below:

Strategy Update

Global equity markets posted another positive month in June. The key drivers of this positive market momentum continue to be the roll out of COVID-19 vaccines and the associated rebound in global economic activity. While the recent data has painted a positive picture in terms of economic growth, investors are keeping a close watch on the potential implications for inflation. The 5.0% year-on-year rise in the May US consumer price index was the highest for over a decade. However, for now at least, the market is seeing several of the contributors to this rise in inflation as transitory.

This sanguine view on the inflation outlook helped push bond yields lower which in turn provided a boost for growth and quality stocks. The Technology and Health Care sectors were beneficiaries of growth’s return to favour. Energy, the best performing sector year-to-date, had another strong month in June as the oil price continued to move higher. The more value-oriented Financial and basic Materials sectors underperformed. At a regional level, the US with its relatively heavy technology weighting led the way. The Australian dollar was weaker in June enhancing the returns for unhedged portfolios.

While the overweight exposure to Technology and Healthcare were major contributors to the portfolio’s outperformance in June, its Consumer Discretionary sleeve also contributed positively. At a sector level, the portfolio’s biggest drag on performance came from its financial holdings.

Nike, the number one brand globally in sportswear was added to the portfolio in the fourth quarter of last year. Nike’s brand, manufacturing scale and depth of catalogue provide the basis for its moat. In addition, the athleisure tailwind is still strong as sportswear continues to take market share from traditional apparel and footwear. The firm is well positioned for its direct-to-consumer strategy to bear fruit which WCM believes will be moat enhancing and lead to an era of elevated growth.

The first six months of the calendar year has been another challenging period for investors relying on a top-down macroeconomic focused investment approach. Investors that correctly predicted the economic recovery, which began towards the end of 2020, and positioned their portfolios towards more cyclical and value sectors would have enjoyed continued strong relative returns into the first quarter of 2021. However, investors who held this position through the second quarter would have seen a partial erosion of these relative returns as growth outperformed value.

The WCM Quality Global Growth Equity Strategy is not dependent on accurate top-down analysis. The firm’s approach is built on the premise that superior long-term returns are achieved by identifying wide moat companies with aligned corporate cultures. While this approach does not make the strategy immune from shorter term periods of underperformance, it has consistently delivered above market returns since its inception.

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.