We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in October 2021.
The Strategy1 delivered a return of 1.56% during the month. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over one month, six months, three years, five years, 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 read the full investment update 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 bounced back strongly from September’s decline, posting their strongest month of the year. The corporate earnings reporting season was the primary catalyst for these market gains with more than 70% of companies having exceeded consensus analyst estimates. One of the surprising features of this reporting season has been the resilience of profit margins in the face of rising input prices. Tentative signs that embattled Chinese property developer, Evergrande, is beginning to work through its debt problems was another positive for markets. At a macroeconomic level, investors’ attention remains keenly focused on the inflationary impact of rising energy prices and supply chain bottlenecks. However, for now these inflation concerns are more evident in bond than equity markets with the former starting to discount a faster pace of monetary tightening from global central banks. The equity market rally was broad based with all major sectors recording a positive return. At a regional level, developed markets outperformed emerging and growth, and quality and price momentum factors beat value. The Australian dollar appreciated in October, dampening the returns for unhedged portfolios.
Materials and Industrials were the portfolio’s top-performing sectors in the month, with the laggards being Information Technology, Consumer Discretionary and Healthcare. Recent portfolio activity includes the addition of Lam Research Corporation (Lam), the leading global supplier of wafer fabrication equipment to the semiconductor industry. Lam’s economic moat is derived from its superior technology and huge installed base. The expansion of this moat will come from leveraging these advantages and continued investment in research and development.
Most market commentary is focused on what the team at WCM would describe as ‘expiring knowledge’. This is the headline news that fills our screens today, which in five and 10-years’ time we will look back on and realise didn’t actually mean anything from a long-term investment perspective. Examples of this expiring knowledge can be an individual quarterly earnings per share number or a monthly inflation print. Many commentators also like to discuss the ‘outlook’. WCM’s response to the ‘outlook’ question is always the same: ‘there is plenty of uncertainty and most questions have unknowable answers, whether about markets, economies, international relations etc.’ Instead, the WCM team chooses to focus on businesses that are adapting and continuing to grow their competitive advantages. While nobody can know how these businesses will fare in the next quarter, WCM believes they will generate compelling returns in the long term.
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.