WCM Quality Global Growth September 2022 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 August 2022.

The Strategy1 delivered a return of -2.11% during the month, outperforming the benchmark MSCI All Country World Index (ex-Australia) return of -3.54%. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over three, 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 read the full investment update for each of these products on the links below:

Strategy Update

Following a brief respite in July, the declines in the following two months meant the September 2022 quarter was the third consecutive negative quarter of the calendar year for global equity markets. Stubbornly high inflation and central banks’ commitment to fighting it through higher interest rates remain the primary short-term headwinds for both equity and bond markets. On a more medium-term basis, investors are concerned these higher rates may lead to recessionary economic conditions and ultimately a negative impact on corporate earnings. The unfunded, expansionary mini budget announced by the new Truss government in the UK and the subsequent response from the Bank of England to limit the rise in Gilt yields added to the negative market sentiment.

The September market sell off was wide ranging with all major markets and sectors recording monthly declines. At a factor level there was no clear pattern with the performance of value, quality and growth differing across regions. The one clear trend was the outperformance of lower volatility stocks. The strong performance of the US dollar was another feature of the month. This helped reduce the decline in unhedged global portfolios.

Portfolio attribution analysis shows that most of the outperformance in September was due to sector selection. The positively contributing sector positions included the overweight allocation to Health Care and zero exposure to Communication Services and Real Estate. In contrast, the overweight allocation to Information Technology and Industrials detracted from returns as did the underweight to Consumer Staples. In terms of stock selection, the major positive was the consumer discretionary sleeve with holdings in the Health Care and Information Technology sectors a drag on relative performance.

The investment team at WCM always strives to learn from market experiences. One such learning from the recent market downturn and style shift from growth to value was the high correlation observed amongst the holdings in the defensive growth sleeve of the Quality Global Growth portfolio. From this, the team recognised the need to have greater diversification amongst the defensive growth holdings in terms of their key business drivers and industry tailwinds, while also meeting WCM’s core requirements of an expanding economic moat with aligned corporate culture. As such, several new and diverse defensive growth names have been added to the portfolio including North American waste services company, Waste Connections, and pharmaceutical distribution firm, McKesson Corporation.

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.