September, 2023
The fund performed mostly in line with the MSCI All Country World Index ex Australia Net for the one-month period ended September 30, 2023. Apple was the largest relative contributor for the month. Although shares of Apple fell over the month, our position was a relative contributor due to our underweight position versus the benchmark. Shares of Apple were pressured by several factors, including macroeconomic concerns, fears that China would restrict iPhone purchases, and issues involving the new iPhone 15 Pro overheating. We still believe that Apple is well positioned for growth given consistent iPhone demand, market share gains in China, and the firm’s massive research and development program. However, our underweight versus the benchmark is a reflection of the stock’s relatively expensive valuation and uncertainty surrounding the firm’s near-term outlook. At the sector level, stock selection in industrials and business services helped relative returns, with our holdings in SM Investments, Roper Technologies, and Container Corporation of India performing the best. On the other hand, holdings in energy hurt relative returns, especially our positions in EQT and Schlumberger.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-09-30_1697010030.pdfAugust, 2023
The fund performed mostly in line with the MSCI All Country World Index ex Australia Net for the one-month period ended August 31, 2023. Adyen was the largest relative detractor for the month. Adyen is a full-stack payments platform that consists of providing gateway, acquiring, risk management, processing, settlement, and issuing services. Shares sold off sharply following the release of very poor earnings results that underperformed already low consensus expectations. Results were mainly driven by a slowdown in the U.S. segment due to merchant cost-cutting, increasing competition, higher capital expenditures, and challenges with offline services. We still believe Adyen has a long runway for above-market growth driven by secular trends and a technological advantage over incumbents that is very difficult to replicate, but given these disappointing earnings results, we chose to moderate our position size. At the sector level, stock selection in financials hurt relative returns, with our holdings in Adyen and NU Holdings performing the worst. On the other hand, holdings in information technology helped relative returns, especially our positions in FPT and NVIDIA.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-08-31_1694514150.pdfJuly, 2023
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended July 31, 2023. Evotec was the largest relative contributor for the month. Although the European contract research organization lowered its 2023 full-year guidance due to the impact from a cyberattack earlier in the year, shares rose on the back of several positive developments, including a contract with the U.S. Department of Defense and news that Bristol-Myers Squibb would be entering into an exclusive licensing agreement. Management also indicated that despite one-off issues affecting 2023 growth, it fully expects reaccelerating in 2024 and beyond. Evotec continues to be one of the portfolio’s highest-conviction ideas, and we believe the company should benefit from secular tailwinds and deeper customer penetration as end market businesses choose to outsource research services more often. At the sector level, stock selection in consumer discretionary helped relative returns, with our holdings in Rivian Automotive, Li Auto, and DoorDash performing the best. On the other hand, holdings in financials hurt relative returns, especially our positions in Fiserv, Axis Bank, and HDFC Bank.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-07-31_1691660315.pdfJune, 2023
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended June 30, 2023. Tesla was the largest relative detractor for the month. While shares of Tesla rose over the period, our position was a relative detractor due to our underweight versus the benchmark. Investors have been encouraged by recent developments for the company, including news that all versions of the firm’s cheapest Model 3 would be eligible for the full USD 7,500 electric vehicle tax credit, as well as the announcements that Ford, General Motors, and Rivian would each adopt Tesla’s North American charging plug standard. While we continue to believe Tesla is a high-quality company that is massively disrupting the automotive industry, our underweight position reflects our understanding that there are some risks to the company’s growth outlook, especially in the short term. At the sector level, stock selection and sector allocation in consumer discretionary hurt relative returns, with our holdings in Tesla, MercadoLibre, and Prada performing the worst. On the other hand, holdings in financials helped relative returns, especially our positions in Fiserv, One 97 Communications, and NU Holdings.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-06-30_1689330401.pdfMay, 2023
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended May 31, 2023. Advanced Micro Devices (AMD) was the largest relative contributor for the month. AMD rose as investor exuberance from semiconductor names following a blowout quarterly report from NVIDIA lifted the broader industry. During the period, Advanced Micro Devices released earnings results that disappointed investors, mainly due to weaker-than-expected PC and data center numbers, which also drove soft guidance for the second quarter. Although the earnings report initially pressured shares, the broader strength in semiconductors and an unconfirmed report that Microsoft would be teaming with AMD to create artificial intelligence (AI) chips to rival NVIDIA helped lift the stock. We continue to believe that Advanced Micro Devices is well positioned to garner significant share in its end markets as personal computing and data center businesses reaccelerate and the company benefits from AI demand. The firm’s acquisition of Xilinx, which formally closed in February 2023, provides longer-term growth optionality, in our view. At the sector level, stock selection in health care helped relative returns, with our holdings in Evotec, McKesson, and Eli Lilly performing the best. On the other hand, holdings in materials hurt relative returns, especially our positions in Nutrien, CF Industries, and Dsm-Firmenich.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-05-31_1688044079.pdfApril, 2023
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended April 30, 2023. Our position in European contract research organization, Evotec, was the biggest relative detractor in the portfolio. In a reversal from March, shares of Evotec pulled back in April. Investors appeared to take profits after recent strength and were also cautious following news of a cyberattack that affected Evotec’s systems. Evotec continues to be one of the portfolio’s highest-conviction ideas, and we believe the company should benefit from secular tailwinds and deeper customer penetration as end-market businesses choose to outsource research services more often. At the sector level, stock selection in communication services hurt relative returns, with our holdings in Sea, ROBLOX, and Liberty Media Corporation performing the worst. On the other hand, holdings in financials helped relative returns, especially our positions in BDO Unibank, Fiserv, and Kotak Mahindra Bank
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-04-30_1684313252.pdfMarch, 2023
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended March 31, 2023. Our position in Charles Schwab was the biggest relative detractor in the portfolio. Shares of Charles Schwab sold off with the broader financials sector following the shuttering of several U.S. regional banks due to a combination of unrealized losses from investing in longer-duration Treasuries and cryptocurrency and then a sudden run on those banks as depositors cashed out their accounts. While Charles Schwab has a more diversified structure than the affected banks, investors punished the company more than some other peers due to concerns about reduced fees and higher costs as clients switch to higher interest rate generating accounts in an event known as cash sorting. There was also continued overhang from the company’s disappointing earnings report in February.
We still believe Charles Schwab is a premier franchise with an attractive and diversified business model; however, we recognize that the stock could be volatile in the coming months and reduced our position. At the sector level, stock selection and sector allocation in financials hurt relative returns, with our holdings in Charles Schwab, Huntington Bancshares, and Fifth Third Bancorp performing the worst. On the other hand, holdings in communication services helped relative returns, especially our positions in Sea and ROBLOX.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-03-31_1681999533.pdfFebruary, 2023
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended February 28, 2023. Our position in Masan was the biggest relative detractor in the portfolio. Masan is a Vietnamese consumer-oriented conglomerate. Shares plunged with the broader Vietnamese market, as sentiment worsened across the broader Southeast Asian region amid rising U.S.-China political tensions and a property market downturn in China that has tempered optimism about China’s growth outlook. We believe Masan will be a key beneficiary of Vietnam’s strong economic growth and favorable demographics given its dominant position in several consumer-focused categories and growing ecommerce capabilities. At the sector level, stock selection in consumer staples hurt relative returns, with our holdings in Masan and Estee Lauder performing the worst. On the other hand, holdings in financials helped relative returns, especially our positions in NU Holdings, Charles Schwab, and Bank Central Asia.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-02-28_1678988474.pdfJanuary, 2023
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended January 31, 2023. Our position in MercadoLibre was the biggest relative contributor in the portfolio.
MercadoLibre, Latin America’s largest online trading platform, rose with the broader Argentinian market following news that the government would begin buying back over $1 billion in overseas bonds to improve its debt profile. Additionally, investors interpreted competitor Americanas’ disclosure of accounting inconsistencies in its income statement and balance sheet as potentially beneficial to MercadoLibre’s business. We think MercadoLibre is on track to be the leading digital provider of financial services in Latin America, with a vibrant marketplace ecosystem and competitive technology. At the sector level, stock selection in health care helped relative returns, with our holdings in Evotec, Lonza Group, and Sartorius performing the best. On the other hand, holdings in financials weighed on relative returns, especially our positions in Charles Schwab, Axis Bank, and Kotak Mahindra Bank.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2023-01-31_1676018258.pdfDecember, 2022
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended December 31, 2022. Our position in Sumber Alfaria Trijaya was the biggest relative detractor in the portfolio.
Shares of the Indonesian convenience store operator fell with the broader Indonesian market as investor fears about slowing global growth and the possibility of a recession in 2023 pressured many emerging markets. We think that Sumber Alfaria Trijaya is well positioned for accelerating growth and to capitalize on its extensive network of e-money and e-commerce partnerships to grow its fee-based income, already a major profit contributor. At the sector level, stock selection in consumer discretionary hurt relative returns, with our holdings in Rivian Automotive, Farfetch, and Coupang performing the worst. On the other hand, holdings in information technology contributed the most to relative returns, especially our positions in MongoDB, Glodon, and Apple.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended November 30, 2022. Our position in Atlassian was the biggest relative detractor in the portfolio. Atlassian is a leading provider of on-premises and cloud-based workflow and collaboration software for enterprises. Shares sold off after the company reported extremely disappointing earnings results, driven by significantly slower seat expansions than expected. The company also meaningfully cut its cloud growth guidance for fiscal year 2023. Despite near-term challenges, we appreciate the long growth runway the company has as it benefits from emerging software development trends, cloud migration, and a low-cost flywheel sales model. At the sector level, stock selection in information technology hurt relative returns, with our holdings in Atlassian and NVIDIA performing the worst. On the other hand, holdings in consumer staples contributed the most to relative returns, especially our positions in Masan, Tsingtao Brewery, and Sumber Alfaria Trijaya.
The investment landscape remains volatile, with changing economic factors and conditions creating an increasingly complex backdrop for global equity investors. Higher inflation, tightening liquidity conditions, armed conflict in Europe, and the unwinding of pandemic-era extremes imply higher risks and ongoing market fluctuations going forward. With geopolitical and macroeconomic uncertainty remaining part of the nearterm environment, accepting we are in a new reality and focusing on longterm fundamental stock drivers has become even more important.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended October 31, 2022. Our position in Apple was the biggest relative detractor in the portfolio. Although shares of Apple rose over the period, our position was a relative detractor due to our underweight position versus the benchmark. We believe that Apple is well positioned for growth given consistent iPhone demand, market share gains in China, and the firm’s massive research and development program.
However, our underweight versus the benchmark is a reflection of the stock’s relatively expensive valuation. At the sector level, stock selection in consumer discretionary hurt relative returns, with our holdings in Li Auto, JD.com, and Amazon.com performing the worst. On the other hand, holdings in financials contributed the most to relative returns, especially our positions in Goldman Sachs, Axis Bank, and Huntington Bancshares.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-10-31_1668070608.pdfSeptember, 2022
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended September 30, 2022. Our position in Apple was the biggest relative contributor in the portfolio. Although shares of Apple declined over the period, our position was a relative contributor due to our underweight position versus the benchmark. We believe that Apple is well positioned for growth given consistent iPhone demand, market share gains in China, and the firm’s massive research and development program. However, our underweight versus the benchmark is a reflection of the stock’s relatively expensive valuation. At the sector level, stock selection in consumer staples helped relative returns, led by our holdings in Sumber Alfaria Trijaya, InRetail Peru, and United Spirits. On the other hand, holdings in health care detracted the most from relative returns, especially our positions in Evotec, WuXi Biologics, and Sartorius.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-09-30_1665630780.pdfAugust, 2022
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended August 31, 2022. Our position in Sumber Alfaria Trijaya was the biggest relative contributor in the portfolio. Reports of robust expansion helped push up shares of Indonesian convenience store operator in August. The company announced over 800 new store additions in the first half of 2022 and is now targeting to open more than 1,300 new stores for the full year. In addition to its accelerating retail sales growth trends, we think that Sumber Alfaria Trijaya is also well positioned to capitalize on its extensive network of e-money and e-commerce partnerships to grow its fee-based income, already a major profit contributor. At the sector level, stock selection in financials helped relative returns, led by our holdings in NU Holdings, Bank Central Asia, and Charles Schwab. On the other hand, holdings in industrials and business services detracted the most from relative returns, especially our positions in Roper Technologies, Ashtead, and Experian.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-08-31_1662965722.pdfJuly, 2022
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended July 31, 2022. Our position in Rivian Automotive was the biggest relative contributor in the portfolio. Shares of the electric vehicle maker rebounded after months of losses as investors were encouraged by several analyst upgrades, signs that production could be accelerating, news that Amazon.com would begin rolling out its fleet of Rivian’s delivery vehicles, and the firm’s decision to cut its workforce by 6% in an effort to reign in costs. We remain confident in the long-term fundamentals of the business and view Rivian as a unique opportunity to participate in the automotive industry’s most powerful secular trend of electrification.
We believe that the business has competitive technology and an impressive structure due to its partnerships, operations, and product development, all run by a highquality and visionary management team. At the sector level, stock selection in financials helped relative returns, led by our holdings in Goldman Sachs, Partners Group Holding, and Charles Schwab. On the other hand, holdings in information technology detracted the most from relative returns, especially our positions in Apple, Glodon, and GDS Holdings.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-07-31_1660112702.pdfJune, 2022
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended June 30, 2022. Our position in Sumber Alfaria Trijaya was the biggest relative contributor in the portfolio as investors pushed up shares of Indonesian retail store operator in June. Given recent inflation, consumers have shifted their shopping for food and non-food necessities closer to home. This benefited sales at the more than 10,000 neighborhood Alfamart convenience store and minimarket outlets. In addition to its accelerating retail sales growth trends, we think that Sumber Alfaria Trijaya is also well positioned to capitalize on its extensive network of e-money and e-commerce partnerships to grow its fee-based income, already a major profit contributor. At the sector level, stock selection in information technology helped relative returns, led by our holdings in Atlassian, ForgeRock, and Salesforce. On the other hand, holdings in industrials and business services detracted the most from relative returns, especially our positions in GE, Siemens, and Ashtead.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-06-30.pdfMay, 2022
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended May 31, 2022. Our position in Snap, which owns social messaging app Snapchat, was the biggest relative detractor in the portfolio. Shares plunged after the company issued an unexpected profit warning, striking a surprisingly negative tone and revising second-quarter guidance to below the low end of its prior guidance range. The company cited a macroeconomic environment that had “deteriorated further and faster than anticipated,” which appears to be drastically affecting advertiser budgets. Despite near-term headwinds, we continue to believe that Snap represents a uniquely compelling opportunity given the platform’s growing popularity among Generation Z, nascent monetization, and the firm’s solid plans to increase user growth and revenue through investments in its salesforce as well as new Discover content and Augmented Reality. At the sector level, holdings in information technology detracted the most from relative returns, especially our positions in Atlassian, MongoDB, and Bill.Com Holdings. On the positive side, stock selection in health care helped relative returns, led by our holdings in Evotec, Daiichi Sankyo, and Argenx.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended April 30, 2022. Our position in electric vehicle maker Rivian was the largest relative detractor in the portfolio for the period. Investors continued to pressure shares of Rivian Automotive. Ongoing supply chain issues, particularly for semiconductor chips and electric battery components, restricted the production capacity of the new electric vehicle manufacturer.
We remain confident in the longterm fundamentals of the business and view Rivian as a unique opportunity to participate in the automotive industry’s most powerful secular trend of electrification. We believe that the business has competitive technology and an impressive structure due to its partnerships, operations, and product development, all run by a highquality and visionary management team. At the sector level, holdings in consumer discretionary detracted the most from relative returns, especially our positions in Rivian, Amazon.com, and Doordash. On the positive side, stock selection in industrials and business services modestly helped relative returns, led by our holdings in Roper Technologies, Havells India, and Waste Connections
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2022-04-30.pdfMarch, 2022
The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended March 31, 2022. Our position in electric vehicle maker Rivian was the largest relative detractor in the portfolio for the period. Shares skidded after the electric vehicle manufacturer posted a wider-than-expected fourth-quarter loss and cut 2022 production numbers in half citing inflationary pressures and supply chain challenges. We remain confident in the long-term fundamentals of the business and view Rivian as a unique opportunity to participate in the automotive industry’s most powerful secular trend of electrification. We believe the business has competitive technology and an impressive structure due to its partnerships, operations, and product development, all run by a high-quality and visionary management team.
We continue to experience an incredibly complex equity investment environment. Markets have become increasingly more volatile and unusual across many dimensions, and the change of pace happening in the world continues at a remarkable rate. The magnitude of price movements in both directions has been staggering, which further complicates our near-term outlook, but we remain optimistic, particularly for our portfolio, as we look out over two to three years.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended February 28, 2022. Our position in contract research organization Evotec was the largest relative detractor in the portfolio for the period. Shares of Evotec pulled back following news that Bayer had suddenly discontinued development of eliapixant, a P2X3 receptor antagonist, an unexpected hit to Evotec’s pipeline. Nevertheless, we have high conviction in Evotec. The company has been producing solid double-digit earnings growth, which we think will continue, driven by secular tailwinds and deeper customer penetration as end-market businesses choose to outsource these services more often. At the sector level, holdings in materials detracted the most from relative returns, especially our positions in Linde, International Paper Company, and Mondi. On the positive side, stock selection in the information technology sector modestly helped relative returns, led by our holdings in Bill.Com Holdings, Teamviewer, and GDS Holdings.
We retain a gently optimistic, as opposed to defensive, perspective via a focus on stocks that we believe should compound earnings over the next 2-3 years and as we work through the impact of COVID-19, including a winter that has evolved in a way that is more negative than we anticipated. The questions of inflation versus deflation, value versus growth, and COVID-on versus COVID-off are clearly all very important, but it is rare for the market’s macro focus and thematic pursuit to be so large or rotational as we have seen in 2021. The recent invasion of Ukraine by Russia is another major event we are monitoring, and while we do not have any direct exposure to Russian or Ukrainian companies, we understand there are broad-based risks that could materialize and are watching the situation closely. The positive and clear aspect of the market backdrop has been the continuation of strong corporate earnings, which in turn has supported valuations and the case for equities. This continues to make global equities and thoughtful stock picking a relevant approach for return generation, even more so on the stock picking front as we normalize some of the extremes of 2021.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended January 31, 2022.
Our position in electric automaker Rivian was the largest relative detractor in the portfolio for the period. As the reality of near-term interest rate hikes became clearer, investors rotated out of shares of high-growth companies valued primarily on their future potential cash flow stream, like Rivian, which only recently went public. We remain confident in the long-term fundamentals of the business and view Rivian as an outstanding and unique opportunity to participate in the automotive industry’s most powerful secular trend of electrification. At the sector level, holdings in consumer discretionary detracted the most from relative returns, especially our positions in Rivian, THG, and Farfetch. On the positive side, holdings in real estate helped relative returns, led by our holdings in China Resources Mixc Lifestyle, KE Holdings, and Welltower.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended December 31, 2021.
Our position in Southeast Asian mobile platform Sea was the largest relative detractor in the portfolio for the period. Recent earnings released in November showed that growth in the firm’s key gaming business had slowed down significantly as life returned to the “COVID-off” mode in many of the countries where it operates. Despite good results from both the e-commerce and fintech segments, investor sentiment turned negative, and the stock price skidded throughout December. At the sector level, holdings in consumer discretionary detracted the most from relative returns, especially our positions in Rivian, Grab, and Etsy. No sectors contributed on a relative basis for the period.
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The fund underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended November 30, 2021.
Our position in Apple was the largest relative detractor in the portfolio for the period. While Apple rose over the month, our position was a relative detractor due to our underweight position versus the benchmark. While we believe the firm is well positioned regardless of the path the pandemic takes given consistent iPhone demand, market share gains in China, and the firm’s massive research and development program, our underweight acknowledges the company’s relatively slower growth profile and relatively expensive valuation. At the sector level, holdings in the information technology sector detracted the most from relative returns, especially our positions in Apple, Zoom Video Communications, and NVIDIA. On the positive side, stock selection in the consumer discretionary sector helped relative results, especially our positions in Rivian, FSN E-Commerce Ventures, and Etsy.
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Shares in developed Europe eked out positive gains but were mixed in Australian dollar terms. Solid corporate earnings helped to counter worries that elevated inflation, supply chain disruptions, and the prospect of tightening monetary policy could hobble an economic recovery. The eurozone economy grew 2.2% sequentially in the third quarter, an uptick from 2.1% in the previous quarter, according to an initial estimate from Eurostat. The European Central Bank (ECB) maintained its existing policies and indicated that it would continue buying assets under the auspices of its Pandemic Emergency Purchase Programme (PEPP) at the somewhat moderated rate announced in September
We saw equity market volatility increase throughout the recent quarter in what has been both a challenging and a fascinating macro environment, with an interesting mix of positive and negative tensions. Global economic growth remains above trend, albeit past peak levels; liquidity remains abundant, although policy accommodation is expected to gradually tighten; substantial progress on vaccine distribution has been made, but we face increased risk from the fast-spreading delta variant; publicly traded corporates have broadly delivered strong earnings, yet they face prospects of higher taxes and a stricter regulatory environment; equity valuations are more than a standard deviation above their historical average on a 30-year view; however, investors are getting more yield in equities than in high yield bonds; and market sentiment is more positive than not, but not outrightly bullish.
Additionally, policy objectives in China have continued to evolve, which has led to even more investor complexity. We expect markets to remain volatile in the near term given the ongoing pushes and pulls across such large dimensions and are trying to be balanced within the portfolio, keeping the overall portfolio risk (beta) near 1.0. While our mandate is growth oriented, we have the flexibility to be contrarian, which allows us to buy the best assets at good prices and embrace some uncertainty, particularly when that uncertainty has already led to very meaningful price declines. This approach has manifested itself within the portfolio through an increased exposure to China, a co-leader in technology and artificial intelligence, the world’s second-biggest economy, and which is located at the center of southeast Asia, which we view as the most vibrant region of the world. We are not making a portfolio-defining bet but are leaning into China on weakness, especially in names we believe will provide compelling upside potential over the long term, despite near-term headwinds
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We saw equity market volatility increase throughout the recent quarter in what has been both a challenging and a fascinating macro environment, with an interesting mix of positive and negative tensions. Global economic growth remains above trend, albeit past peak levels; liquidity remains abundant, although policy accommodation is expected to gradually tighten; substantial progress on vaccine distribution has been made, but we face increased risk from the fast-spreading delta variant; publicly traded corporates have broadly delivered strong earnings, yet they face prospects of higher taxes and a stricter regulatory environment; equity valuations are more than a standard deviation above their historical average on a 30-year view; however, investors are getting more yield in equities than in high yield bonds; and market sentiment is more positive than not, but not outrightly bullish. Additionally, policy objectives in China have continued to evolve, which has led to even more investor complexity. We expect markets to remain volatile in the near term given the ongoing pushes and pulls across such large dimensions and are trying to be balanced within the portfolio, keeping the overall portfolio risk (beta) near 1.0. While our mandate is growth oriented, we have the flexibility to be contrarian, which allows us to buy the best assets at good prices and embrace some uncertainty, particularly when that uncertainty has already led to very meaningful price declines.
This approach has manifested itself within the portfolio through an increased exposure to China, a co-leader in technology and artificial intelligence, the world’s second-biggest economy, and which is located at the center of southeast Asia, which we view as the most vibrant region of the world. We are not making a portfolio-defining bet but are leaning into China on weakness, especially in names we believe will provide compelling upside potential over the long term, despite near-term headwinds
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Developed European stocks rose on strong corporate earnings and hopes that central banks’ accommodative policies and coronavirus vaccination programs would continue to support an economic recovery. Stocks in Portugal, the Netherlands, Ireland, and Austria were among the strongest performers, while Sweden was the only major European country to finish in negative territory. The number of coronavirus cases in the European Union and European Economic Area stabilized, although the number of deaths rose, according to the European Centre for Disease Prevention and Control. Inflation in the eurozone increased 2.2% in July—up from 1.9% in June and slightly higher than the European Central Bank’s 2% target. Rising energy costs drove the increase. However, inflation in the UK cooled from June’s levels. The Bank of England said that “some modest tightening of monetary policy over the forecast period is likely to be necessary” should the economy evolve broadly in line with the bank’s projections
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended August 31, 2021. Evotec was the largest contributor in the portfolio. Shares of the European contract research organization spiked following solid quarterly results. While earnings were weaker than expected due to increased operating expenses and cost of goods, topline growth was strong and investors remained encouraged by the firm’s growth trajectory. We have high conviction in Evotec’s long-term growth potential, driven by secular tailwinds and deeper customer penetration as end-market businesses choose to outsource these services more often. At the sector level, stock selection in health care contributed the most, led by our positions in Evotec, Eurofins Scientific, and Danaher. Conversely, stock choices in real estate hurt relative results, especially our holdings in China Resources Mixc Lifestyle and KE Holdings
We are in unprecedented times where there is no standard playbook. Equity markets have remained resilient during a period marked by a very uneven global economic recovery as countries and regions are forging divergent paths to a post-pandemic world. Continued uncertainty and growing debate around inflation, interest rates, growth, valuations, and market sentiment have led to heightened investor complexity, which increases the merits of our strategy: We remain humble in acknowledging what we don’t know and to the risks of portfolio-defining “bets.” Although macro considerations are factored into our bottom-up, stock-specific theses, we do not try to predict macro outcomes and instead remain focused on corporate earnings and the path of earnings growth over time. As always, our goal is to fill the portfolio with the best bottom-up ideas that fit our investment framewor
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2021-08-31.pdfJuly, 2021
We are in unprecedented times where there is no standard playbook. Equity markets have remained resilient during a period marked by a very uneven global economic recovery as countries and regions are forging divergent paths to a post-pandemic world. Continued uncertainty and growing debate around inflation, interest rates, growth, valuations, and market sentiment have led to heightened investor complexity, which increases the merits of our strategy: We remain humble in acknowledging what we don’t know and to the risks of portfolio-defining “bets.” Although macro considerations are factored into our bottom-up, stock-specific theses, we do not try to predict macro outcomes and instead remain focused on corporate earnings and the path of earnings growth over time. As always, our goal is to fill the portfolio with the best bottom-up ideas that fit our investment framework.
We expect markets to remain volatile in the near term as genuine investor debate about how the world will look on the other side of the pandemic ebbs and flows. We are thoughtfully processing information as it is uncovered and are open-minded that the world can change as time progresses and events unfold. Our default view remains that the recent spate of inflation we have seen is likely transitory due to the ongoing secular forces of globalization, demographics, digitalization, and low interest rates and that the post-pandemic world should be similar to what it was pre-COVID-19, with relatively lower growth and lower rates. However, we recognize the need for some time to pass to gain a clearer picture.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2021-07-31.pdfJune, 2021
The fund outperformed the MSCI All Country World Index ex Australia Net for the one-month period ended June 30, 2021. Amazon.com was a leading contributor in the portfolio. The stock traded higher in the runup to the e-commerce retailer’s annual Prime Day event. We continue to have high conviction in Amazon given its dominant position in online retail and its robust cloud computing business. In addition, we are encouraged by
the e-commerce giant’s ongoing retail logistics buildout, which should add to its already strong fulfillment capacity. At the sector level, stock selection in consumer discretionary boosted relative returns the most, with our positions in Etsy, Zalando, and Peloton Interactive aiding the most. Conversely, an underweight allocation and stock selection in energy hampered relative returns the most, particularly our position in Galp Energia Sgps.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2021-06-30.pdfMay, 2021
The o going health pandemic offers its own pushes and pulls. There has been a marked improvement in vaccine distribution within the U.S with 2%-3% of the country's population being vaccinated each week. H`òwever, the vaccine rollouts in parts of Europe and Asia have been rockier, and the coronavirus is likely to remain in the world for some time, particularly in some emerging market countries where we may be more than a year out before many people can obtain the vaccine wich amplifies risks of virus variants
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_PortfolioUpdate_PORTFOLIO_UPDATE_au_en_AUD_2021-05-31.pdfApril, 2021
The fund outperformed the MSCI all-country world index ex Australia net for the one-month period ended April 30, 2021 goggle parents alphabet was the leading contributor in the portfolio as the stock gained ground following a U.S Supreme court decision that ruled the company use of Oracle Java programming language constituted fair use and was thus protected from copyright infringement Later in the month, Alphabet reported strong earning results which beat analyst estimates across the boards. Highlights included impressive revenue growth and operating margin expansions, as robust advertising showed strong consumer activity
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_04302021.pdfMarch, 2021
The fund underperformed the MSCI all-country world index ex Australia Net for the one-month period ended March 31 - 2021 London stock exchange was the largest relative detractor in the portfolio as shares of the UK- based stock exchanges dropped sharply. Although earnings reported during the periods were in line with the consensus estimates investors were hoping for more optimistic guidance concerning the integration equation Refinitive
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_03312021-1.pdfFebruary, 2021
The fund slightly underperformed the MSCI All Country World Index ex Australia Net for the one-month period ended February 28, 2021. Quidel, a manufacturer of diagnostics products and solutions, was the largest relative detractor in the portfolio. Shares of the company dropped amid concerns that a ramp-up in COVID-19 vaccinations would negatively impact the demand for testing. We believe that Quidel has a strong pipeline that has only been enhanced by its COVID-19 diagnostics tests and maintains a favorable view. At the sector level, stock selection and an overweight allocation to health care detracted the most from relative returns, with our positions in Quidel, DiaSorin, and Teladoc Health hurting the most. Conversely, information technology names boosted relative returns, especially Wix.com, Shopify, and Fiserv.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_02282021.pdfJanuary, 2021
The fund outperformed the MSCI All Country World Index ex-Australia for the one-month period ended January 31, 2021. Tencent Holdings was the largest relative contributor in the portfolio. Shares of the internet giant rose due to a surge in demand for Hong Kong stocks from mainland Chinese investors, although the name pulled back near the end of the month as investors took profits.
We are encouraged by Tencent’s solid fundamentals and robust investment portfolio, and we believe that the company has ample opportunity to further monetize its large, rapidly growing user base. At the sector level, stock selection in health care contributed the most to relative performance, led by Eurofins Scientific, Teladoc Health, and Evotec. Conversely, information technology names lowered relative returns, especially our positions in Global Payments, Fiserv, and StoneCo.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_01312021.pdfDecember, 2020
The portfolio outperformed the MSCI All Country World ex-Australia Index Net for the three-month period ended December 31, 2020. Relative performance drivers: (1)Stock picks and an overweight in financials contributed. (2) An underweight to energy detracted from relative returns. (3) Holdings in North America helped; no regions detracted.
Additional highlights: (1) Our allocations to real estate and health care increased, while our exposure to materials and utilities decreased. Regionally, our allocation to Pacific ex-Japan increased, while exposure to Europe decreased. (2) In the current environment, we think it is most important to maintain portfolio breadth (having a balanced portfolio of holdings) and diversification and to apply risk control and active stock decision-making as we work through what is going to be an uneven path of recovery and improvement.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/T.RowePriceGlobalEquityFundQuarterlyReview31122020.pdfNovember, 2020
The fund underperformed the MSCI All Country World Index ex-Australia for the one-month period ended November 30, 2020. Alibaba Group Holding was the largest relative detractor in the portfolio. Shares of China’s dominant e-commerce platform plunged after the hotly anticipated IPO of the firm’s fintech spinoff Ant Financial was postponed amid reported pressure from the Chinese government. We continue to like the firm’s asset-light business model, which we think is scalable, self-enhancing, and highly cash flow generative.
At the sector level, holdings in the consumer discretionary sector hurt relative results the most, especially our positions in Alibaba Group Holdings and THG Holdings. On the positive side, our overweight to financials, coupled with positive stock selection, helped relative returns, led by our positions in Brookfield Asset Management and Morgan Stanley.
OUTLOOK We think we are now at a point where tactically it makes sense to be more prudent than two or three months ago as there are still a number of significant risks for investors to contend with.
Firstly, we are seeing a resurgence of coronavirus cases in Europe and an extended first wave in many places in the U.S. It has proven more difficult to keep the spread at bay and, even though there are many vaccine candidates in development utilizing diverse technologies and platforms, it is far from a certainty that we will have an effective near-term solution. Secondly, China-U.S. tensions are flashing amber and could worsen ahead of the U.S. presidential election in November.
Thirdly, the election itself is a difficult call at this point. A Biden victory would likely usher in a less business friendly regulatory and tax regime, but we would also presumably experience some geopolitical calming. Fourthly, the growing possibility of a hard Brexit, which could be viewed as a negative modifier if it were to occur, is another risk that needs to be monitored.
The breathtaking amount of fiscal and monetary stimulus from governments and central banks in both developed and emerging economies since March has created a firmly entrenched narrative that we are in an extremely low interest rate environment for longer, in a world with extremely low growth. We have seen a clear demarcation of winners and losers with the ongoing health crisis rapidly accelerating what were already durable secular trends, and with limited alternatives for investors, more money has been chasing those winners. Concurrently, we are seeing other investor behaviors and broad sets of data points that suggest some areas of the market could be early in a bubble. These prospects just raise the complexity of the environment we are in and re-emphasizes the importance of focusing on the portfolio stock by stock.
With these increasing risks creating a higher degree of difficulty in navigating markets, we are maintaining a broadly balanced portfolio with sector exposures relatively neutral to our core benchmark. We still own a blend of structural winners, durable compounders, and higher yielding names that held up well during the March equity selloff but lagged on the way back up. The continued strong performance of developed equity markets relative to their emerging markets counterparts has led to our EM weighting trending modestly lower. However, in a low growth world, we continue to think investing in the fast-growing emerging market countries, such as India, Indonesia, Philippines, Vietnam, and Peru, will be more important than ever.
While we have a more cautious near-term outlook for global equities, we continue to like what we own in the portfolio and remain more constructive over the medium term given the scale of the stimulus efforts around the globe, which should further support risk assets. However, there are still significant and unpredictable risks to manage, and we think a measure of diversification remains key. With volatility likely to be an ongoing feature of markets near term, we will remain focused on our holdings and make use of stock specific opportunities to upgrade the portfolio when they arise.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_11302020.pdfOctober, 2020
The fund outperformed the MSCI All Country World Index ex-Australia for the one-month period ended October 31, 2020. Snap was the largest relative contributor in the portfolio. Snap, which owns social media app Snapchat, spiked on extremely impressive results, with much better than expected revenue and earnings driven by a steep rebound in advertising.
We think Snap represents a uniquely compelling opportunity given the platform's growing popularity among Generation Z, nascent monetization, and the firm's solid plans to increase user growth and revenue through investments in its salesforce as well as new Discover content and Augmented Reality. At the sector level, stock selection in communication services contributed the most to relative returns, led by Snap, Tencent Holdings, and Alphabet. Conversely, holdings in materials hurt relative results, most notably our position in Symrise.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/AGET_Monthly_PortfolioUpdate-M_24591_10312020.pdfticker: ETL0071AU
commentary_block: Array
factsheet_url:
https://www.troweprice.com/financial-intermediary/au/en/funds/aut/global-equity-fund.html
under Performance Report on website, then in the PDF under FUND REVIEW
release_schedule: Monthly
fund_features:
Rowe Price Global Equity’s impressive manager and best-in-class research platform push this fund to the top of the global equity peer group.
- Lead manager Scott Berg displays an impressive command of the portfolio and macroeconomic issues that affect it. He joined T. Rowe Price as an analyst in 2002 and took over this vehicle in 2012, though he’s managed a similar strategy since 2008.
- Berg’s experience and familiarity with the firm’s analyst platform are critical given his global, go-anywhere approach. Alongside associate portfolio manager Hari Balkrishna, who joined Berg in 2015 and similarly shows off vast investment insights, Berg leverages T. Rowe’s enormous global team to build a distinctive growth portfolio. It’s vast, holding around 150 stocks, making diversification the key risk management tool here.
manager_contact_details: Array
asset_class: Foreign Equity
asset_category: Large Growth
peer_benchmark: Foreign Equity - Large Growth Index
broad_market_index: Developed -World Index
structure: Managed Fund