We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in September 2023.
The Strategy1 delivered a return of -3.64% during the month, outperforming the benchmark MSCI All Country World Index return of -3.77%. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over one month, 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)
Following strong gains in the first half of the year, global equity markets posted a negative return for both the month and September quarter. A sell-off in global bonds (the 10-year US Treasury yield reached its highest level since 2007) was one of the primary factors contributing to the weakness in equity markets. The increase in bond yields put downward pressure on equity market valuations while the inversion of the curve renewed fears of a significant economic slowdown and subsequent impact on corporate earnings. The weakness in equity markets over the month was widespread with Japan and the UK the only major markets finishing in positive territory. It was a similar story of broad-based weakness at the sector level, the notable exception being Energy stocks which gained following production cuts from Saudi Arabia and Russia. Factor performance reflected the risk off sentiment with low volatility, quality and value stocks outperforming growth. The Australian dollar traded in a narrow range in September leading to little difference between the returns of hedged and unhedged portfolios.
Stock selection made a positive contribution to portfolio relative performance in September. This was most evident in the Health Care, Industrials and Consumer Staples sectors of the portfolio. On the flipside, selection in the Consumer Discretionary and Financials sectors detracted from relative performance. From a sector allocation perspective, the largest positive contributors were the overweight exposure to Health Care and below benchmark allocations to Real Estate and Consumer Staples. The zero positions in both Energy and Communication Services and overweight position in Technology weighed on performance relative to the benchmark.
The September quarter was a relatively quiet one in terms of portfolio activity with no new names added and only two outright sales, Pernod Ricard and Bill.com. While portfolio turnover can vary depending on market conditions and other factors, the activity levels of the research team at WCM remain constant. Over the course of the quarter the team visited Europe, Asia and Latin America. The European leg of this trip included meetings with 15 companies in six different countries. The team also completed the development of a comprehensive artificial intelligence investment framework. This framework has helped to identify the firms that the team considers to be the best stage one participants, such as technology infrastructure firms Microsoft and Nvidia. These research efforts are examples of the inputs into WCM’s ongoing process of seeking expanding economic moat companies with aligned corporate cultures.
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.