September, 2023
The Munro Global Growth Fund returned -4.9% in September. Long equities detracted from performance during the month. Short equities and hedging contributed positively to performance. Global markets declined in September, with continued concerns that the US Federal Reserve will keep its benchmark lending rates higher for longer than anticipated, with the US 10-year bond yield rising and valuation multiples coming under pressure. Robust economic data from the US and an increase in oil prices reviving inflation added fuel to the rise in bond yields. The Fund’s defensive growth holdings in Costco and United Health were positive performers during the month. The biggest detractors included Nvidia and Amazon despite stellar results during August, essentially giving back some of their recent strong performance. Currency was a modest detractor from performance for September. The Fund remains 50% hedged back to AUD.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/652719ec933cbc37807475ae_20230930-Monthly-Report-MGGF-vFINAL.pdfAugust, 2023
The Munro Global Growth Fund returned 1.4% in August. Long equities and hedging modestly detracted from performance. Positive contribution came from short equities and currency. Global markets declined in August, with concerns that the US Federal Reserve will keep its benchmark lending rates higher for longer than anticipated, leading the US 10-year bond yield higher and putting pressure on valuations. Soft economic data out of China and a credit downgrade for the US government also added pressure on global growth expectations. GLP beneficiaries, Novo Nordisk and Eli Lilly, were strong performers during the month, both key names in the Innovative Health Area of Interest.
Novo Nordisk announced results from the SELECT cardiovascular outcome trial, which were much better than expected. Results showed a reduction of major adverse cardiovascular events (MACEs) by 20% in people treated with its GLP1 drugs. NVIDIA continued to perform, with its results also significantly beating elevated expectations. Key detractors included Liberty Media (F1), ASML and Richemont. Currency was a large contributor to performance for August as the AUD weakened in line with the softening outlook for China. The Fund remains 52% hedged back to AUD and hence did not capture all the upside from the 3.5% fall in the AUD.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/64f96eb4704868003564ab21_20230831-Monthly-Report-MGGF-vFINAL.pdfJune, 2023
The Munro Global Growth Fund returned 1.6% in June. Long equities contributed positively to performance; whilst currencies and portfolio hedging detracted from performance. Global markets rallied strongly in June. One of the key potential risks to the market was taken off the table at the beginning of the month with US President, Joe Biden, signing legislation that lifts the nation’s debt ceiling. The market’s breadth widened during the month as non-technology sectors also performed well, with some of the more financially leveraged sectors like, industrials, recovered some recent underperformance. Top contributors for the month included Nvidia, continuing to rally after exceptional earnings results in May and Amazon, as the market reappraised their outlook as a beneficiary in artificial intelligence given their strong incumbency in cloud computing infrastructure. Detractors for the month included Alphabet and Synopsys which gave back some of their recent strong gains. From a portfolio perspective, we remain encouraged by earnings outlooks for our portfolio holdings, which point to an acceleration in earnings growth from some of our key Areas of Interest.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/64b0d9d22a38198b9942bff8_20230630-Monthly-Report-MGGF.pdfMay, 2023
The Munro Global Growth Fund returned 4.6% in May. Long equities, currencies and portfolio hedging all contributed to performance. Global markets were mixed in May, with the S&P finishing relatively flat. However, Artificial Intelligence (AI) was the big story of the month, which was largely driven by the quarterly earnings report of Nvidia. The stock rose over 20% on the day of reporting, putting it close to USD 1tr in market capitalisation. Additionally, investors followed the debate around the US debt ceiling until an eventual proposed resolution was put to Congress towards the end of the month. Top contributors came from our High-Performance Compute Area of Interest (AoI) - ASML, Nvidia, Synopsys and TSMC, all benefiting from the rise of AI. While the largest detractors were Visa and Luxury Goods company, LVMH, as investors continue to worry about the health of the US consumer. From a portfolio perspective, we remain encouraged by earnings outlooks for our portfolio holdings, which point to an acceleration in earnings growth from some of our key AoI’s.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/648153858e41f40e20b2e0f1_20230531-Monthly-Report-MGGF.pdfApril, 2023
The Munro Global Growth Fund returned 0.8% in April. Long equities and currencies positively contributed, while portfolio hedging negatively contributed to performance. Global markets appreciated in April, driven by earnings results that were better than expected, particularly from the Consumer and Health Care sectors.
Big Tech stocks reported late in the month and largely exceeded expectations too. Positive contributors for the month included Microsoft, which saw Azure revenue growth and guidance top expectations, as well as commentary around their Artificial Intelligence-related products being received positively. Chipotle Mexican Grill, the restaurant chain famous for its burritos, also had good results, with traffic improving significantly compared to late 2022.
Finally, Eli Lilly performed strongly on the back of a positive outlook on GLP-1 medications, given its Mounjaro (diabetes and weight loss drug) sales came in above consensus and with encouraging efficacy data. The key detractors for the month were in the semiconductors – with ASML and TSMC giving back some of their calendar year gains. The portfolio remains positioned for accelerating growth from AI-related adoption, Chinese consumers rebounding with the re-opening of the economy and the policy tailwinds supporting Climate Change.
File:March, 2023
The Munro Global Growth Fund returned 2.1% net in the March quarter (MAET.ASX 2.0% net). The Fund’s long positions contributed positively, while the fall in the Australian dollar also modestly added to performance. Short positions and hedging detracted from performance. Equity markets began the quarter strongly with expectations that the Federal Reserve would moderate its rate hikes. This saw the US 10-year bond yield retreat, leading to a rally in long-duration stocks. Q4 earnings season also drove stocks higher – full year 2023 guidance did not lead to the widespread downward revisions the market had anticipated. Technology companies, in particular, offset slowing top-line growth with widespread cost cutting programs, with many companies cutting 10% of their workforces, enabling them to give strong margin expansion guidance. Artificial intelligence (AI) was the big buzzword throughout the quarter. Microsoft announced a further investment in OpenAI, the developer of AI chatbot ChatGPT. The launch of Microsoft 365 Copilot in mid-March excited the market. The product is designed to increase productivity by embedding the power of ChatGPT into the Microsoft 365 applications to create a powerful productivity tool. The other major event for the quarter was the collapse of Silicon Valley Bank (SVB). Credit Suisse also ran into problems on the other side of the pond and was abruptly taken over by Swiss rival UBS with the support of the Swiss authorities. Several other regional banks also ran into significant issues, but with a swift response from policymakers, this has not yet led to a systemic issue. From a Fund perspective, our long positions added to absolute performance for the quarter. This was led by stocks that benefited from the market’s interest in artificial intelligence. As well as Microsoft mentioned above, the key beneficiaries of AI are the underlying infrastructure companies namely, semiconductor companies (see stock commentary on page 5). ASML (+92 bps), NVIDIA (+69 bps) and Advanced Micro Devices (AMD) (+43 bps) all performed well throughout the quarter. Luxury goods names LVMH (+78 bps) and Richemont (+10 bps) were also strong performers during the quarter following China’s reopening and a resilient US luxury consumer (see stock commentary on page 6). Our largest long detractor was United Health (-51 bps), which suffered from some changes to Medicare Advantage reimbursement rates. Short selling detracted from performance during the quarter, given the consumer held up better than expected. Option hedging also detracted from performance during the quarter as the market quickly stabilised following the regional banking crisis with a swift response from policy makers. The Australian dollar gave back some of last quarter’s gains leading to a small positive gain from exposure to the USD. We ended the quarter at approximately 57% hedged to Australian dollars.
File:February, 2023
The Munro Global Growth Fund returned -2.1% in February. Exposure to currencies positively contributed, while equities and portfolio hedging tools negatively contributed to performance. Global markets were mixed in February, with hawkish comments from the US Federal Reserve, higher bond yields and recession concerns weighing on markets. Earnings results from Q4 and guidance for this year was reasonably well received and investors were willing to look through soft Chinese consumption numbers given positive current trends on their re-opening. Artificial Intelligence (AI) was a big talking point for the month with Microsoft’s product launch of their new Bing search engine, integrated with OpenAI’s ChatGPT. NVIDIA, a key beneficiary of AI adoption, commented very positively on the AI trends they are seeing and described it as a “new computing era”. The top contributor for the month was Novo Nordisk, with their semaglutide drugs continuing to see strong growth. Alphabet was a detractor as investors feared that Microsoft’s new Bing search engine would provide a more competitive threat to their dominant Google search engine.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/6408127c43fefc825f0cbcf3_20230228-Monthly-Report-MGGF-FINAL.pdfJanuary, 2023
The Munro Global Growth Fund returned -0.3% in January. Long equities positively contributed, while short equities, portfolio hedging, and currencies negatively contributed to performance. Global markets rallied strongly in January driven by expectations that the Federal Reserve will moderate its rate hikes. US 10-year bond yields fell back to 3.5% as a result, leading to a strong rally in long-duration stocks particularly unprofitable technology stocks. The top contributor for the month was ASML, as the stock regained momentum from November when the company significantly upgraded their long-term guidance. LVMH was another strong performer as confidence in the China economy re-opening helped fuel expectations for strong sales growth from that region. Nextera was the largest detractor as they didn’t upgrade their financial guidance, which we feel is the management being conservative on the Inflation Reduction Act until projects and rulings are finalised. The portfolio remains balanced as we remain watchful for any material signs of macroeconomic pressure on earnings.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/63e9913de0068230591559a5_20230131-Monthly-Report-MGGF.pdfDecember, 2022
The Munro Global Growth Fund returned -5.1% in December. Short equities and portfolio hedging were the key contributors, while long positions and currencies declined. Global markets retreated during December as fears that the US Federal Reserve have gone too far in their hiking cycle weighed on stocks. Despite US inflation sequentially decreasing again in December, focus has now shifted to what effects those interest rate rises will have on the economy and companies.
Top contributors were short positions, Apple and CSX, while long position, Novo Nordisk, gained on strong demand for its obesity & diabetes pharmaceutical offering. The main detractor was Costco, where management announced a comparable sales result that fell short of market expectations, coupled with management noting they are starting to see a softening economic backdrop. Despite the volatile month and year, we are positive about the year ahead. While volatility may continue in the first quarter, we are getting closer to the overall market adequately pricing this COVID-induced macro adjustment.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/63bfa32c79c8e28b0a8e874b_20221231-MGGF-Monthly-Report.pdfNovember, 2022
The Munro Global Growth Fund returned 1.1% in November. Long equity positions were the key contributor, while short positions, currency and portfolio hedging all detracted. Markets continued their relief rally in November, triggered by the weaker-than-expected inflation print in the US. This reinforced the market’s suspicion that US inflation has now peaked and the US Federal Reserve hiking cycle won’t last for as long as previously expected. Results from the Q3 earnings season were mixed with consensus earnings coming down, but they came down more modestly than anticipated.
Top contributors in November were ASML who delivered a strong outlook at their capital markets day, as well as Next-Era Energy and Lululemon. The main detractor was Amazon, where management are taking longer than anticipated to right-size the cost base. The Fund will stick to its process of identifying earnings upgrades, with a particular focus on Climate and Innovative Health Areas of Interest that we believe have strong runways for earnings upgrades in 2023 and beyond.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/639010a8cedc3f16e326fd66_20221130-MGGF-Monthly-Report.pdfOctober, 2022
The Munro Global Growth Fund returned 0.9% in October. Long equity positions were the key contributor, while short positions and portfolio hedging detracted, currencies had a neutral effect on monthly performance. Markets made a comeback in October, with most leading indices posting strong gains outside of Hong Kong and China. The key driver for the rally was the expectation of a “Fed Pivot”, or at least a slowdown in the hiking cycle by the US Federal Reserve. Overall, company earnings were not as bad as feared which helped extend the rally. Disappointingly, Big Tech earnings and guidance came in light, with FX a big headwind and a slow-down in end markets for names like Microsoft in cloud computing and Amazon in Q4 holiday sales expectations. Positive contributors for the month included Constellation Energy, Visa and United Health. Detractors included Amazon and most of our short holdings that gave back recent performance as they rallied with the market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/6369d042ca0b108dc8e2dbf2_20221031-MGGF-Monthly-Report-FINAL.pdfSeptember, 2022
The Munro Global Growth Fund returned 1.3% in September. Following on from the previous month, markets moved lower on the back of higher interest rate expectations. The Federal Reserve raised rates a further 75bps to 3.25%. In Europe, the pound fell sharply after the new Truss government announced an unfunded tax cutting plan, forcing the Bank of England to step in to backstop the bond market. As a result, the US dollar showed its strength with currency being the biggest contributor for the month, adding more than 340bps. Shorts were also a big contributor – adding over 240bps to performance. The largest detractors included long positions Alphabet, Vestas Wind Systems and Microsoft. With Q3 earnings season around the corner, the Fund remains defensively positioned into what could be a difficult results season for many companies as the economic slowdown starts to appear in earnings.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/634642ca595dfc4c9ee134bb_MGGF-September-monthly-report.pdfAugust, 2022
The Munro Global Growth Fund returned -1.9% in August. Equity markets reversed course in August as Jerome Powell delivered a hawkish message at Jackson Hole, reiterating the Fed’s commitment to bringing down inflation. Following the meeting, markets retraced earlier expectations of potential rate cuts in early-to-mid 2023, causing the US 10Y bond yield to rise above the 3% mark. Further, Europe’s energy crisis deepened after Russia halted gas flows from the Nord Stream pipeline indefinitely. Positive contributors for the month were Constellation Energy, Cheniere and Nutrien, which all benefited from the newly announced IRA (Inflation Reduction Act) bill. Detractors for the month included Nvidia and Salesforce. We are keeping a close eye on any upwards re-acceleration in long-term interest rates, should this occur, the fund will continue to deploy capital preservation tools to manage volatility.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/63183f0f0094ad4ad530214d_202208_Monthly_MGGF.pdfJune, 2022
The Munro Global Growth Fund returned -1.2% in June. Long positions were again the key detractor while currency, shorting and portfolio hedging all contributed positively to returns. The first half of 2022 has been the toughest start to any year since 1962 and the month of June was also difficult. Inflation concerns, interest rate uncertainty and fears of a potential recession have led to the falls in equity markets. Consumer and industrial focused short positions, Delta Airlines and United Rentals, were the main contributors while High Performance Compute positions, AMD and NVIDIA, were the key detractors. Given this dynamic environment, the Fund remains cautiously positioned. with 50% net exposure
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/62ce71745218c15d15fa85da_202206_Monthly_MGGF.pdfMay, 2022
The Munro Global Growth Fund returned -2.1% in May. Equity positions were the key detractor for the month, while portfolio hedging detracted slightly and currency was also a headwind as the AUD rallied. Equity markets remain difficult and volatile. At one point the US S&P500 index was down 8% for the month of May (-20% from the 4th of January highs). Fears that stubborn inflation would force the US Federal Reserve to tighten faster, combined with negative earnings reports from major retailers like Walmart and Target, spooked the market. Ultimately though, with already oversold conditions, there was another powerful month end ‘bear rally’.
From a stock perspective, high performance computing leader AMD, agricultural company Bayer, and large cap renewable energy utility Nextera Energy, were positive contributors. Detractors from performance included data / exchange businesses Intercontinental Exchange and S&P Global, as well as security company, Rheinmetall. The Fund maintains elevated cash levels and where possible, we continue to buy put option protection to guard against further market declines.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/62a14b7aeb55baf9add9a0fc_202205_Monthly_MGGF.pdfDecember, 2021
The Fund returned -1.7% in December. The Fund’s long positions contributed positively, while currency, options and shorts all detracted over the month. Equity markets continued to digest that the Omicron coronavirus variant is likely to be less disruptive to the economy than previous strains while the increasingly hawkish US Federal Reserve warned that a faster pace of interest rates rises may be required to subdue inflation. Both caused volatility in markets during the month. From a Fund stock perspective, Climate positions, Nutrien and Nextera, were strong contributors and Digital Payments large champions, Visa and Mastercard, reversed recent declines. ECommerce stocks, Hello Fresh and Amazon, were the main detractors during the month. We remain positive equity markets in 2022, however the outlook is murkier than usual, the Fund will look to preserve capital should markets get difficult as the year progresses
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/61de526860123a3b7f25bb2f_202112_Monthly_MGGF.pdfOctober, 2021
The Munro Global Growth Fund returned 2.0% in October. The Fund’s long positions were the key driver of the positive return, while currency, options and shorts all detracted. Equity markets resumed their upward trajectory in October, as macro headwinds like supply chains, inflation and China worries took a back seat to Q3 reporting. While results were mixed, digital businesses generally did well while physical businesses struggled with logistics problems, with corporates welcoming the strength of the demand environment. Elsewhere, markets managed to digest the well flagged Fed tapering and interest rate rises with limited volatility. Digital Enterprise leaders Microsoft and ServiceNow were among the biggest contributors, while High Performance Compute positions, NVIDIA and Advanced Micro Devices, and internet giant, Alphabet also contributed. Our Digital Payments holdings were the biggest detractors for the month. We remain positive about equity markets medium term
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/6189b9ba8e755045956125fe_202110_Monthly_MGGF.pdfSeptember, 2021
The Munro Global Growth Fund returned -4.2% in September. The Fund’s long positions were the driver of the negative returns, while shorts and currency helped offset some of the decline. Strong recent market performance reversed in September. While the Fund had avoided much of the risk around COVID and China, the headwinds started to spill over as the month progressed. Supply chain bottlenecks, weaker Chinese demand and stubborn inflationary pressures are all likely to pressure near term earnings. Elsewhere, the spectre of personnel changes at the Fed is creating uncertainty in interest rates markets, impacting equity valuation multiples. The biggest detractors for the month were technology stocks Google, PayPal and Microsoft. Innovative Health leader Danaher gave back some recent performance and Climate holding, Trane Technologies was weaker on supply chain concerns. We remain positive equity markets, but we have reduced exposure to help the Fund navigate this more difficult period
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/6166547b70245b01d96c5fca_MGGF-Monthly-Report-September-2021.pdfAugust, 2021
The Munro Global Growth Fund returned 3.8% in August. The Fund’s long positions were the driver of returns, shorts and currency were largely flat, while there was a small drag from downside protection hedging. Global equity markets continued their strength driven by excellent corporate earnings and still low interest rates.
Key positive contributors included E-Commerce company, HelloFresh, Innovative Health winner, Danaher and Digital Enterprise business, ServiceNow. The key detractor for the month was Mastercard, as its cross-border business is likely to remain pressured by the Delta variant’s impact on travel. We remain positive about equity markets, with excellent structural growth tailwinds in place for our companies, underpinned by a low interest rate backdrop and long term structural deflationary forces.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/MGGF-Monthly-Report-August-2021.pdfJuly, 2021
The Munro Global Growth Fund returned 3.9% in July. The Fund’s long positions were the main contributor, shorts and currency also added to performance, while there were some modest hedging losses. Global equity markets continued their strength driven by the US reporting season. Eyes were also focused on the UK’s covid cases and deaths as the reopening of their economy provided an illustration of the efficacy of the vaccines and a glimpse into a post covid world. Key positive contributors included Innovative Health winner, Danaher, Internet Disruption giant Alphabet on the back of exceptional results, High Performance Computing winner ASML and Digital Enterprise businesses, ServiceNow and Microsoft. The key detractor for the month was Amazon, failing to meet the bullish broker estimates for the quarter. We remain broadly positive equity markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/MGGF-Monthly-Report-July-2021-js.pdfJune, 2021
The Munro Global Growth Fund returned 4.9% in June. The Fund’s long positions returned 4.2%, shorts and hedging returned -0.6%, while currency added 1.3%. Global equity markets had another positive month driven by rapidly rising earnings estimates as market participants continue to underestimate the strength of the economic recovery and companies’ ability to profit from it.
Aggressive sector rotation continued, but we would suggest the market is starting to refocus on earnings growth over the longer term and that the leading growth stocks will re-assert themselves. Key positive contributors included High Performance Computing winner Nvidia, Digital Enterprise businesses, ServiceNow, Microsoft and Adobe, and Digital Payments leader, PayPal. The backdrop of economic growth broadening and global interest rates likely to remain structurally lower, creates a good environment for companies with the ability to grow. Equities will clearly be the asset class of choice if this environment prevails.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/MGGF-Monthly-Report-June-2021.pdfMay, 2021
The Munro Global Growth Fund returned -1.5% in March. The Fund’s long positions detracted 1.3%, shorts and hedging detracted 0.9%, while currency added 0.7%. Global equity markets had another positive month in March. However, the strong market performance masked significant volatility under the surface as leadership rotated aggressively towards more cyclical stocks that would benefit from the “re-opening” of businesses and economies, generally at the expense of longer duration assets like bonds, gold and growth equities. Key contributors included Climate beneficiaries Darling Ingredients and Enel, and High Performance Computing winner, ASML. The main detractors for the Fund were smaller market cap technology holdings. On equities markets more broadly, we remain positive. COVID ending is good for growth and good for corporate earnings.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/MGGF-Monthly-Report-March-2021.pdfDecember, 2020
The MGGF returned 2.2% in December. The Fund’s long positions added 4.6%, while shorts and hedging detracted 0.5%. The AUD appreciated 4.8% against USD, which detracted a further 1.9% due to the Fund's ~40% holding in USD. Markets maintained their upward momentum following more certainty on vaccine deployment and US election results.
Key contributors included food delivery e-commerce winner HelloFresh, Climate champions Samsung SDI and Vestas and High Performance Computing beneficiaries Taiwan Semiconductors and ASML. While acknowledging the strong performance since the market lows, the case for equities remains strong with a backdrop of low interest rates and economic recovery post-COVID.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/MGGF-Monthly-Report-December-2020.pdfasset_class: Foreign Equity
asset_category: Long Short
peer_benchmark: Foreign Equity - Long Short Index
broad_market_index: Developed -World Index
manager_contact_details: Array
ticker: MUA0002AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://munropartners.com.au/funds/munro-global-growth-fund/#fundreports
MONTHLY UPDATES -> Select the related year / month
fund_features:
Munro Global Growth seeks to generate double digit annualised returns over the medium to long term, whilst maintaining a capital preservation mindset. The Fund will invest in a global portfolio of listed equities with the aim of generating a double digit absolute annual return to Investors over the medium to long term. The number of equity holdings and option positions the Fund will hold at any point in time will typically range between 30 and 50 holdings. The Fund will generally invest in: international listed equities, cash equivalent instruments, exchange traded derivatives, and over the counter equity swaps.
structure: Managed Fund