September, 2023
The Fund fell with the market in the September quarter and was unable to outperform the Index return
The key positive contributors to performance included Novo Nordisk and Pioneer Natural Resources
Novo Nordisk - The Danish pharmaceutical company's popular treatments for diabetes and obesity continued to boost total revenues and in turn, elevated the stock
Pioneer Natural Resources - While the independent oil and gas company posted revenues that fell short of analysts' expectations. quarterly earnings surpassed, with oil production close to the top end of management's estimated range.
The key detractors from performance included Adyen, Lonza Group and AIA Group.
Adyen - Shares of this payment solutions provider declined on the news of the company's disappointing earnings, due in part to a decline in payment volume growth and an increase in expenses.
Lonza Group - Shares of Lonza, a Swiss contract manufacturer for the health care industry, declined on worries of slower demand and the departure of its CEO.
AIA Group Shares of this Hong Kong-based insurer remain depressed. The company has been reporting improvement in the value of
new business bocked, yet its stock continues to underperform. The overall bearishness around emerging markets stocks appears to be weighing on AIA shares as well.
Notable purchases in the September quarter included NVIDIA and Boston Scientific while notable sales included Marvell Technology and Pernod Ricard
NVIDIA - The stock was purchased after the company reported strong results boosted by demand for its market-leading graphics processing unit chips. The company's products are a clear beneficiary of the rising trend of commercialising the burgeoning growth of generative artificial intelligence.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-3-1.pdfAugust, 2023
The Fund produced a positive absolute return in August in Australian dollar terms but was unable to outperform the index return.
The key positive contributors to performance included Novo Nordisk and Mitsubishi Heavy Industries.
Novo Nordisk - The Danish pharmaceutical company’s popular treatments for diabetes and obesity continued to boost total revenues and, in turn, elevated the stock.
Mitsubishi Heavy Industries. Mitsubishi Heavy Industries continues to benefit from a surge in defence-related orders, while its energy division continues to realise strong orders led by demand for gas turbines.
The key detractors from performance included Adyen and Sea.
Adyen - Shares of this payment solutions provider declined on the news of the company’s disappointing earnings, due in part to a decline in payment volume growth and an increase in expenses.
Sea - The Singapore-based online gaming and entertainment firm posted a disappointing quarterly report. While sales growth has slowed, cost-cutting efforts have positively impacted profits.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1-12.pdfJuly, 2023
The Fund produced a positive absolute return in July but was unable to outperform the strong index return.
The key positive contributors to performance included Stellantis and Grupo Financiero Banorte.
Stellantis - The automaker’s stock rose during the month after management announced revenues for the first half of 2023 that beat consensus forecasts. The company reiterated its guidance for the remainder of the year.
Grupo Financiero Banorte - Shares of this Mexican bank rose in July after the company released its second-quarter financial results. While earnings did not quite match analysts’ expectations, its growth in net profits was robust, notably in the trading and insurance business segments.
The key detractors from performance included Hexagon and Verisign.
Hexagon - Shares of this maker of sensors and autonomous technology dropped after the release of mixed financial results that disappointed some investors.
VeriSign - Shares of the domain name registry company fell after an analyst downgrade that cited potentially slowing growth in domains. Notable purchases in July included Taiwan Semiconductor Manufacturing Co and Alibaba Group Holding while notable sales included FMC.
Taiwan Semiconductor Manufacturing Co continues to reiterate its long-term growth potential underpinned by demand for high-performance computing requirements. The investment team believes that artificial intelligence will be an incremental and meaningful growth driver for the company over time.
Alibaba Group Holding’s online retail sales in China are reaccelerating and its core China retail revenue, while still negative, is showing improvement from prior quarters. Further, the company’s planned spin-offs of several businesses and share repurchases have the potential to unlock value and return capital back to shareholders.
FMC is a crop chemical manufacturer with an emphasis on herbicides. The stock was fully exited after a series of disappointing earnings results, as the company has been executing unevenly and management has given too many excuses on missing earnings.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-9.pdfJune, 2023
The Fund produced a solid absolute return in the June quarter but was unable to outperform the impressive index return. The key individual contributors to performance included Marvell Technology, B3 and CoStar Group.
Marvell Technology - Shares of Marvell rose following the release of quarterly earnings and revenues that beat consensus market expectations.
B3 - Shares of this company boosted relative returns as B3 benefits from being the largest financial exchange operator in Brazil, where volatility continues to drive trading volumes.
CoStar Group - This leading provider of real estate data and services recently raised its guidance for 2023.
MarketAxess Holdings was a key individual detractor in the quarter. Shares of the operator of bond trading platforms traded lower despite the company reporting solid volume statistics, including its best single day of credit volume and a solid rebound in new issuance in May. Notable purchases in the quarter included Becton Dickinson and Co and ASML Holding while notable sales included T-Mobile US and IQVIA Holdings.
Becton Dickinson and Co was purchased as the company’s organic revenue growth should materially improve over the next year. Demand for its products is relatively insulated from an economic downturn. There is also potential upside from new products such as the Alaris pump.
ASML Holding was added to the portfolio on rising evidence that interest and demand trends in generative artificial intelligence will fuel incremental growth in the server/data centre market, which will in turn be a strong driver of future silicon wafer consumption. The company recently upgraded its end-market growth assumptions.
T-Mobile US was exited as recent trends have been less favourable. The size of earnings beats and raises continue to shrink as the company has harvested most of the post-merger synergies with Sprint. Competitive pressures are also expected to rise, especially from telecommunication/cable competitors.
IQVIA Holdings was fully exited on continued concerns over many factors, including biotechnology funding leading to potential bad debts and the slowdown of research and development activity at end customers.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1-11.pdfMay, 2023
The Fund produced a marginally positive return in May but was unable to outperform the index return.
The key positive contributors to performance included Marvell Technology, Marvell Technology - Shares of Marvell rose following the release of quarterly earnings and revenues that beat consensus market expectations. In addition, a peer company’s strong earnings guidance driven by artificial intelligence-related demand for semiconductor chips further buoyed Marvell stock.
Advanced Micro Devices – The share price dipped early in May after the company reported quarterly financial results that matched analysts’ estimates but reflected a slump in sales of personal computers. However, after a competitor issued strong earnings guidance driven by artificial intelligence-related demand for semiconductor chips, the stock surged.
ICON - This provider of outsourced clinical trial and commercialisation services to the pharmaceuticals industry contributed to results in health care. The stock rose as earnings for the first quarter of 2023 exceeded analyst expectations and management reaffirmed prior revenue guidance for the full year of 2023.
Notable purchases in May included ASML Holdings and Mitsubishi Industries while notable sales included T-Mobile US and Catalent. ASML Holding was added to the portfolio on rising evidence that interest and demand trends in generative artificial intelligence will fuel incremental growth in the server/data centre market, which will in turn be a strong driver of future silicon wafer consumption. The company recently upgraded its end-market growth assumptions.
Mitsubishi Heavy Industries earnings and margins should inflect positively as the company benefits from new projects tied to sustainability goals, including market share gains in gas turbines and initiatives to prolong usage of nuclear reactor plants in Japan.
T-Mobile US was fully exited as recent trends have been less favourable. The size of earnings beats and raises continue to shrink as the company has harvested most of the post-merger synergies with Sprint. The investment team also expect competitive pressures to rise, especially from telecommunication/cable competitors.
Catalent was sold after yet another set of concerning news. The company recently announced a change in its CFO along with delaying its earnings report. These developments increase the risk that earnings expectations may once again be revised lower.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-8.pdfApril, 2023
The Fund produced a solid return of 2.15% in April but was unable to keep pace with the strong index return. The key positive contributors to performance included CoStar Group and AstraZeneca.
CoStar Group - The US-based provider of commercial real estate data reported quarterly earnings and revenues that exceeded analysts’ estimates, driving shares higher.
AstraZeneca - The pharmaceutical giant’s stock advanced as investors looked favourably on its development of a new antibody treatment capable of neutralising all known strains of COVID-19, which may become available before the end of 2023. The key detractors from performance included MarketAxess Holdings, NXP Semiconductors and Catalent.
MarketAxess Holdings - Shares of the operator of bond trading platforms traded lower despite the company reporting monthly and quarterly credit volumes that improved versus the previous year.
NXP Semiconductors – Shares of the automotive chip designer and manufacturer moved lower amid relatively subdued revenue and earnings expectations for 2023. Flat automotive sales and an easing of chip shortages likely contributed to the anticipated slowdown in demand for NXP’s chips.
Catalent - The contract drugmaker’s stock declined after the company lowered sales expectations for 2023. Productivity challenges and higher costs at three of its plants drove the lowered estimates.
Notable purchases in April included Prudential and Beckton Dickinson and Co.
Prudential - The company has divested its underperforming segments in the US and Europe and is now exclusively focused on growing its Asia ex-Japan business. The more focused growth approach, plus the reopening of China from the pandemic shutdown, should result in the reacceleration of new business underwriting.
Becton Dickinson and Co - The company’s organic revenue growth should materially improve over the next year as demand for its products is relatively insulated from an economic downturn. There is also potential upside from new products such as the Alaris pump.
Notable sales included Toronto-Dominion Bank which was sold on evidence that fundamentals are under pressure. Additionally, the Bank of Canada has indicated that it has finished its rate-hike cycle. Loan growth has also decelerated, and asset quality is deteriorating.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1-10.pdfMarch, 2023
The Fund produced a strong return in the March quarter and was marginally behind the impressive index return.
The key positive contributors to performance included MarketAxess Holdings, Advanced Micro Devices and Stellantis.
MarketAxess Holdings advanced on the strength of quarterly earnings and revenues that beat analysts’ estimates. MarketAxess reported solid growth in its latest monthly credit volumes as well.
Advanced Micro Devices rose alongside a broader rally in technology stocks. Reports of strong growth trends in AMD’s data centre and embedded businesses have also boosted the stock.
Stellantis recorded annual profit announced in February, with notable strength in sales of electric vehicles driving shares upward.
Notable purchases in the quarter included Humana and The Walt Disney Co while notable sales included ASML Holding and STERIS.
Humana is a leading provider of health insurance in the US. The stock was added to the Fund on evidence that the company has started to regain lost market share. Further, uncertainty around government reimbursement for Medicare Advantage has been clarified, thus removing an overhanging risk on the stock.
The Walt Disney Co. earnings are expected to inflect positively with the new leadership’s focus on driving profitability in the streaming business, where the company’s content is well positioned to win. The market has ascribed a notably low valuation to the streaming segment relative to peer companies.
ASML Holding was sold following a recent rally in the stock. The investment team believes that a combination of rising macroeconomic uncertainty and political tensions creates a level of risk around near-term demand and the company’s ability to export its technologies freely to China, a key market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-7.pdfFebruary, 2023
The Fund rose by 0.96% in Australian dollar terms but was unable to outperform the index return. The key contributors included Stellantis, Catalent and Cheniere Energy. Stellantis – The Netherlands-based automaker announced a record annual profit in February, with notable strength in sales of electric vehicles driving shares upward. Catalent – The contract drugmaker’s stock advanced after the company announced an expansion of its manufacturing partnership with COVID-19 vaccine maker, Moderna. Cheniere Energy – The liquefied natural gas provider boosted relative returns after management reported strong revenue growth for the most recent quarter, beating analysts’ expectations. Notable purchases in February included American Water Works and Humana. American Water Works is the largest independent publicly traded water utility in the U.S. Valuation has materially improved. We believe sustainable growth is benefiting from two secular trends, the aging of the U.S. water infrastructure as well as the ongoing consolidation of water utilities. Humana is a leading provider of health insurance in the U.S. We have initiated a position on evidence that the company has started to regain lost market share.
Further, uncertainty around government reimbursement for Medicare Advantage have been clarified thus removing an overhanging risk on the stock. Notable sales included Diageo and Zebra Technologies. Diageo was exited after the company reported very disappointing results. Subsequent conversations with the CFO did not provide any comfort and led lower conviction on the investment. Zebra Technologies was sold on rising uncertainty around end-client demand over the near term. The investment team are seeing indications that retailers are delaying spending on inventory management equipment given rising risk around the economic cycle.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-6.pdfDecember, 2022
The Fund produced a solid return of 2.33% in the December quarter but was unable to keep pace with the strong index return. AIA Group was a top positive contributor in the quarter. The Hong Kong-based insurer remains well positioned to benefit across life insurance and financial products in its core markets, with shares rising over the quarter on indications that China’s economy would be reopening. The key detractors included Amazon, Catalent and Cheniere Energy. Amazon - Economic conditions, including a challenging labour market and supply chain issues, have made for a difficult environment for the e-commerce giant.
The big picture offers hope for investors in cash flow generation provided by the massive number of Amazon Prime subscribers and strong market position in online shopping. Catalent - The share price declined because of lower-than-expected revenue for the most recent fiscal quarter. The drugmaker also provided analysts with weaker guidance going forward. The market was disappointed with the firm’s outlook, especially given that COVID-19-related product demand has already been included in its forecast.
Cheniere Energy - The business is supported by long-term contracts that underwrite its planned capacity expansion. It detracted from performance in the most recent period due to a disappointing quarterly earnings report. EBITDA was slightly less than analysts’ projections, though expected future cash flow remains strong. New purchases in the quarter included MarketAxess Holdings, The Estee Lauder Cos and Booz Allen Hamilton Holding while sales included Omnicell. MarketAxess Holdings – The stock was purchased because price/mix is expected to start to lap difficult comparisons, resulting in an acceleration in top- and bottom-line growth. The company should continue to grow its market share in bond trading. The Estee Lauder Cos - While macroeconomic concerns remain, channel expansion in key markets and loosening of mobility restrictions in China should result in an inflection in fundamentals. Demand remains supportive in the company’s US and European segments.
Booz Allen Hamilton Holding - A position was initiated on signs of improving fundamentals and a strong demand backdrop. Current book-tobill ratio is the highest in three years and the firm is a relatively attractive way to participate in the growing defence funding backdrop, without risks from supply chain challenges.
Omnicell – The position was fully exited after the company reported disappointing third-quarter results. The company is being negatively impacted by restrictions around capital expenditure at hospitals, which is elongating its sales cycle.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-5.pdfNovember, 2022
The Fund produced a solid return of 3.06% in November and outperformed the index return by 1.04%. Key contributors during the month included AIA Group and Equinix. AIA Group – The Hong Kong-based insurer’s stock was up strongly for the month following a disruption in operations in October that was caused by COVID-19. AIA Group remains well positioned to benefit across life insurance and financial products in its core markets. Equinix – The data centre-focused REIT’s shares were up strongly for the month as the firm revised earnings estimates upward, contributing to a strong tone for the stock. The key detractors included Pioneer Natural Resources, Catalent and Amazon. Pioneer Natural Resources – The stock remained under pressure following the company’s third-quarter earnings announcement in late October. While the oil and gas exploration firm’s profits exceeded analysts’ estimates on the strength of crude oil prices, investors reacted negatively to a dividend cut. Catalent – Shares were down after the company reported fiscal 2023 first-quarter earnings, which declined year over year. Management attributed the drop to a mix of factors, including inflation and unfavourable foreign exchange rates. Amazon – The stock continued a decline that began in October, when financial results revealed a slowdown in the sales growth of its cloud computing unit. Additionally, management provided a pessimistic forecast for the fourth quarter. Omnicell was fully exited in November after the company reported disappointing third-quarter results. The company is being negatively impacted by restrictions around capital expenditure at hospitals, which is elongating its sales cycle. There were no new purchases during the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-4.pdfOctober, 2022
The Fund produced an impressive return of 6.06% in October but was unable to keep pace with the strong index return. Pioneer Natural Resources was a top contributor as high oil and gas prices have contributed to strength in oil and gas exploration. Strong financials and the firm’s variable dividend payouts also continue to bode well.
The key detractors included Amazon, AIA Group and Hong Kong Exchanges & Clearing. Amazon - The stock tumbled after management reported quarterly results that revealed weaker-than-expected growth in the company’s cloud computing unit. Management also provided a disappointing forecast for the fourth quarter. AIA Group - A disruption in operations caused by COVID-19 continued to adversely affect the Hong Kong-based insurer, however, the company remains well positioned to benefit from the long-term penetration of life insurance and financial products in its core markets. Hong Kong Exchanges & Clearing - The stock exchange operator provided a weak near-term outlook, sending shares lower. Despite the near-term outlook, the company’s mutual market access initiatives, enabled via the Shanghai and Shenzhen Stock Connect program, should continue to be a foundational driver of volume growth over the long term. No positions were liquidated during the period.
New purchases included Booze Allen Hamilton Holding and MarketAxess holdings. Booz Allen Hamilton Holding was purchased as the company is showing signs of improving fundamentals and a strong demand backdrop. Current book-to-bill ratio is the highest it’s been in three years. The firm is a relatively attractive way to participate in the growing defence funding backdrop, without risks from supply chain challenges. MarketAxess Holdings was purchased because the price/mix should start to lap difficult comparisons, resulting in an acceleration in topand bottom-line growth. MarketAxess is expected to continue to grow its market share in bond trading.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-3.pdfSeptember, 2022
The Fund fell by 0.30% in the September quarter and was unable to outperform the index return. The key contributors to performance included Cheniere Energy, Wolfspeed and Wingstop. Cheniere Energy - High natural gas prices drove share price appreciation for the liquefied natural gas company.
Further supporting stock gains were second-quarter earnings that surpassed analysts’ consensus estimates and management’s decision to raise the full-year earnings guidance. Wolfspeed - An upbeat fiscal first-quarter revenue forecast supported share strength. The company expects the ongoing transition from silicon to silicon-carbide chips to continue driving long-term growth. Wingstop - The successful introduction of a new chicken sandwich sent the restaurant chain’s stock higher. Solid quarterly revenue and profit growth also supported share strength.
The company’s projections of lower food costs in the coming quarter added to investors’ optimism for the stock. The key detractors included Avantor and Catalent. Avantor - This provider of products and services to the health care sector continued the decline that began earlier in the year when quarterly earnings reporting was slightly lower than expected. This trend continued as guidance in September was lower than expected. Catalent - The company’s shares declined as a result of lower-than-expected earnings for the most recent fiscal quarter.
The drugmaker has experienced lower demand for COVID-19-related products and has not yet replaced the decreased revenue through growth in its other segments. Notable purchases included Lonza Group and Zoetis while notable sales included Booking Holdings. Lonza Group was purchased because business and fundamentals are supported by both demand for biologic drugs and manufacturing constraints at pharmaceuticals companies.
Additionally, industry research and development pipelines are healthy. Zoetis has been negatively impacted by the recent sell-off in growth-oriented companies, providing an attractive entry point. The company benefits from strong demand for companion animal and livestock health products and from the commercialisation of innovative products and services. Booking Holdings was sold because slowing economic growth is expected to put pressure on household income and wealth, making it harder for consumers to sustain discretionary travel.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1-9.pdfAugust, 2022
The Fund fell with the market in August and was unable to outperform the index return. The key contributors to performance included Wolfspeed, Cheniere Energy and Progyny. Wolfspeed - An upbeat fiscal first-quarter revenue forecast sent shares soaring for the chip manufacturer. The company expects the ongoing transition from silicon to silicon-carbide chips to continue driving long-term growth.
Cheniere Energy - Soaring natural gas prices drove share price appreciation for liquefied natural gas company Cheniere Energy. Further supporting stock gains were second-quarter earnings that surpassed analysts’ consensus estimates and management’s decision to raise the full-year earnings guidance.
Progyny – The fertility benefits management company surpassed analysts’ expectations for second-quarter results, sending shares higher. The company cited an increase in clients as the source of its positive results. Progyny also raised its full-year sales and earnings guidance.
The key detractors included Catalent, YETI Holdings and Koninklijke DSM. Catalent - The company’s shares declined due to lower-than-expected earnings for the most recent fiscal quarter. The drugmaker has experienced lower demand for COVID-19 related products and has not yet replaced the decreased revenue through growth in its other segments.
YETI Holdings – The company is a designer and maker of high-end consumer products for outdoor and recreational use. The brand is particularly well known for its coolers, cargo holders, drinkware and other consumer retail products. The firm missed earnings estimates announced during the first week of August, and the stock suffered.
Koninklijke DSM - This science-based firm is based in the Netherlands and participates in a broad array of segments, including nutrition, personal care and specialty plastics. The company is engaged in realignment, including divestitures and potential mergers, contributing to volatility in its recent stock price. Notable purchases in August included Adyen and Zebra Technologies.
Adyen – The investment team took advantage of relative share price underperformance to establish a position in this payment solutions provider. Adyen’s earnings are expected to continue to benefit from market share gains globally and offers best-in-class omnichannel payment solutions.
Zebra Technologies - A position was initiated in Zebra, a market leader of barcode readers, scanners and printers. Earnings are expected to inflect higher as the business cleans out elevated supply chain costs and continues executing against its medium-term organic growth targets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-2.pdfJuly, 2022
The Fund produced an impressive return of 7.71% in July which was ahead of the index return by 1.31%.
The key contributors to performance included Amazon, NXP Semiconductors and Wingstop.
Amazon - The e-commerce and cloud computing company’s stock rallied after management reported better-than-expected second-quarter
revenue growth driven by strength in its cloud computing business. The company attributed the growth to stronger consumer demand.
NXP Semiconductors - Strong customer demand for new chips benefited the automotive chip designer and manufacturer. The company
reported second-quarter results that included a 28% year-over-year increase in sales and noted signs of improvement in the automotive
end market.
Wingstop - Solid quarterly revenue and profit growth sent shares of the restaurant chain higher. The company’s projections of lower food
costs in the coming quarter added to investors’ optimism for the stock.
AIA Group was a key detractor in July as the global insurer’s stock declined amid volatility and macroeconomic uncertainty as financial
services securities fell out of favour and investors sought safe-haven stocks.
Notable purchases in July included Lonza Group and Zoetis.
Lonza Group – A position was initiated Lonza, a leading contract manufacturer for the health care industry. Business and fundamentals for
Lonza Group are supported by both demand for biologic drugs and manufacturing constraints at pharmaceuticals companies. Industry
research and development pipelines are healthy as well.
Zoetis - Shares have been negatively impacted by the recent sell-off in growth-oriented companies, providing an attractive entry point.
Zoetis benefits from strong demand for companion animal and livestock health products and from the commercialisation of innovative
products and services.
Notable sales included OTP Bank which was exited as growth from key Eastern European markets remains highly uncertain because of the
Ukraine war, which has become protracted. Further, there is potential risk that government policies, such as interest rate caps or higher
taxation, may be implemented to combat economic challenges.
June, 2022
The Fund fell in the June quarter with the market and was unable to outperform the index return. Monster Beverage was a key contributor in the quarter following signs that the company’s share loss in the US has stabilised and that competitor, Red Bull, has lost market share. Other positives included approval of a $500 million stock repurchase plan and speculation that Monster remains an acquisition target by a large global beverage company. The key detractors included Amazon, Wolfspeed and Workday.
Amazon - The e-commerce giant’s shares fell as rising interest rates and inflation drove fears that consumer spending would not continue its recovery. Despite potential earnings revisions, Amazon’s leading position should insulate it from the worst of the downturn. Wolfspeed - The semiconductor maker reported quarterly revenue below consensus estimates. The company attributed its disappointing results to COVID-19-related shutdowns at some of its subcontractors in China. Workday – The enterprise software maker lost ground after falling short of first-quarter earnings estimates. The company cited the delay of several deals, which were pushed back to the second quarter. However, quarterly subscription growth grew and fiscal 2023 guidance increased slightly.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-18.pdfMay, 2022
The Fund fell by 1.51% in May in Australian dollar terms and was unable to outperform the index return. Pioneer Natural Resources was a top contributor to performance as the oil and gas company posted positive returns after beating quarterly earnings estimates. Pioneer’s free cash flow has been strong, and its variable dividend payouts have also boosted the stock.
Key detractors from performance included Workday, Wolfspeed and Cognex. Workday – The enterprise software maker lost ground after falling short of first-quarter earnings estimates. The company cited the delay of several deals, which were pushed back to the second quarter. However, quarterly subscription growth grew and fiscal 2023 guidance was slightly increased.
Wolfspeed - The semiconductor maker reported quarterly revenue below consensus estimates. The company attributed its disappointing results to COVID-19-related shutdowns at some of its subcontractors in China. Cognex – The machine vision company fell after management issued lower second-quarter revenue guidance and projected slower growth momentum amid delays in customer automation projects due to supply chain issues. A key end market for Cognex is the automotive industry, which continued to suffer from components shortages. Notable purchases in May included Verisign and Alcon.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-17.pdfApril, 2022
The Fund fell in April by 5.10% and was unable to outperform the index return. Monster Beverage was a top performer in April. Shares were higher on evidence that the company’s market share loss in the US has stabilised, and that key competitor, Red Bull, has been giving up some market share gains. Investors have also speculated that Monster remains an acquisition target by large global beverage companies.
The key negative contributors included Amazon, The Charles Schwab Corp and Alphabet. Amazon - The online retailer reported its first quarterly loss in seven years. A reversal of pandemic-related shopping trends that saw increased in-store purchases and a decrease in online purchases resulted in the slowest revenue increase in two decades. The Charles Schwab Corp – A drop in quarterly revenue dampened investors’ enthusiasm for Charles Schwab. Trading revenue for the financial services firm fell significantly from the same period a year ago. Despite the recent performance, the investment team continue to see growth catalysts that should lead to further market share gains for the company.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1-6.pdfMarch, 2022
The Fund fell in the March quarter and was unable to outperform the index return. The key positive contributors to performance included Cheniere Energy, Pioneer Natural Resources and AstraZeneca. Cheniere Energy – Shares of the US liquefied natural gas (LNG) producer benefited from high energy prices and President Joe Biden’s the announcement that the US will increase LNG exports to Europe to help replace the LNG that was received from Russia. Pioneer Natural Resources - Recovering economies and higher crude oil prices buoyed the energy sector. After Russia’s invasion of Ukraine, Europe began cutting its ties with Russian oil and gas companies.
AstraZeneca – The drugmaker’s stock price climbed in February as its COVID-19 vaccine was distributed more broadly. AstraZeneca has also benefited from its COVID-19 treatments, and from non-pandemic drug trials. The key negative contributors included Vertiv Holdings, Sea and NXP Semiconductors. Vertiv Holdings – The stock was sold on concerns about management's dynamic ability, as they underestimated price increases required to preserve operating margins. Demand for data centre electrical and cooling systems remains strong, but supply chains are stressed and the cost of components has consistently increased.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-15.pdfJanuary, 2022
The Fund fell more than the market in January, declining by 4.07%.
The key positive contributors to performance included American Express and Cheniere Energy.
• American Express – The credit card and financial services company reported record fourth-quarter sales as its customers began spending more. The company’s focus on entertainment and travel caused it to suffer more heavily during the worst of the pandemic, but this is also fuelling a strong recovery as its cardholders return to social spending.
• Cheniere Energy – A recovering economy and higher crude oil prices buoyed the energy sector, where the liquefied natural gas company was a standout performer, benefiting from ramped up demand and low industrywide supply. Management declared a dividend, showing confidence in its continued growth.
The key negative contributors included Sea and Cellnex Telecom.
• Sea – The stock of the consumer internet company declined amid concerns about slower gaming growth, the potential for wider losses in e-commerce and the global market sell-off that have depressed technology stocks.
• Cellnex Telecom – UK regulators expressed concerns that the Spain-based telecommunications infrastructure firm’s proposed acquisition of a UK tower company could hamper competition. Longer term, Cellnex should benefit from the rising trend of consolidating cellular tower assets in Europe
December, 2021
The Fund produced solid return for the quarter but was unable to outperform the impressive index return.
The key positive contributors to performance included Lowe’s Companies, Advanced Micro Devices and NXP Semiconductors.
• Lowe’s Companies – Amid the pandemic-driven surge in home improvement projects, Lowe’s has seen revenue growth in its professional contractors segment. Lowe’s reported strong third-quarter earnings and raised its full-year guidance, affirming for investors that its strong sales momentum continues.
• Advanced Micro Devices –The chipmaker’s stock gained after reporting strong results driven by sustained investments by data centres. The company continues to gain market share from key competitors.
• NXP Semiconductors – A global shortage of chips and strength in the automobiles industry drove sales for NXP, a maker of chips that connect vehicles to the internet. Third-quarter revenue increased 26% year over year. In addition, expectations of growth in interconnected electric vehicles continue to bode well for the company.
Detractors included Singapore-based e-commerce giant Sea, which underperformed as investors weighed its ability to continue to expand its e-commerce franchise globally. Despite the recent performance, the investment team believe business fundamentals remain supportive of the investment thesis. New purchases included Roper Technologies.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-12.pdfNovember, 2021
The Fund produced a positive return in Australian dollar terms but was unable to outperform the index return. The key positive contributors to performance included NXP Semiconductors and Lowe’s Companies.
• NXP Semiconductors – A global shortage of chips and strength in the automobiles industry drove sales for NXP, a maker of chips that connect vehicles to the internet. Third-quarter revenue increased impressively and expectations of growth in the interconnected electric vehicles continues to bode well for the company.
• Lowe’s Companies – The home improvement retailer reported strong third-quarter earnings, affirming for investors that it continues to enjoy strong sales momentum. A key driver of momentum has been an increase in home improvement projects during the pandemic. The company raised its full-year outlook for 2021.
Detractors included digital entertainment and e-commerce firm, Sea, as investors reacted negatively to unchanged revenue guidance for the gaming division despite the introduction of new titles. The risk of this slowing growth adds to uncertainty around its e-commerce expansion in the region. The investment team will continue to monitor the situation. New purchases included YETI Holdings and Clarivate
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-11.pdfOctober, 2021
The Fund produced a solid return of 1.42% in October which was marginally behind the strong index return.
The key contributors to performance included Lowe’s Companies, Wolfspeed and The Charles Schwab Corp. • Lowe’s Companies – Amid the pandemic-driven surge in home improvement projects, Lowe’s has seen solid revenue growth in its professional contractors’ segment, leading to optimism that it’s gaining market share in this important space. This segment accounts for approximately 25% of Lowe’s total revenue.
• Wolfspeed – The company’s stock jumped following a positive earnings report that included a 36% quarterly increase in sales compared to the same period a year ago. Management pointed to an expanding marketplace for silicon carbide, a semiconductor containing silicon and carbon produced by Wolfspeed, as a driver of growth.
• The Charles Schwab Corp – Investors bid shares of the wealth management firm higher after it reported a 28% quarter-over-quarter increase in core net new assets. The company’s acquisition of TD Ameritrade Holding provides an additional growth catalyst, which should lead to further market share gains.
Detractors from performance included Texas Instruments. Despite strong quarterly reporting, the semiconductor manufacturer and distributor’s stock continued to weigh on returns in October. Supply chain issues and shortages of semiconductors drove investors away from Texas Instruments, taking its stock lower
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-9.pdfSeptember, 2021
The Fund produced a solid return for the quarter but was unable to keep pace with the strong index return. The key contributors to performance included Alphabet, Avantor and ICON.
Alphabet – Google’s parent company saw its stock gain amid economic reopening and a subsequent recovery in advertising spending. Consensus-beating earnings and operating income added to the stock’s strength. Alphabet continues to benefit from the reallocation of advertising budgets from traditional media to the digital space.
Avantor – The specialty chemicals maker’s stock gained ground as it beat quarterly earnings and revenue estimates. Avantor’s COVID-19 tests have become more widespread, and the market reacted positively to its plans to buy Masterflex, a bioprocessing business that supports medicine and vaccine development, including messenger RNA.
ICON – The pharmaceutical research and development firm saw its stock advance as it continued to report strong improvement in its backlog due to net new business won. Organic growth and the recent acquisition of PRA Health Sciences should drive continued improvement in fundamentals
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0581AU-fund-focus-1.pdfAugust, 2021
The Fund produced a solid absolute return in August but was unable to keep pace with the strong index return.
The key contributors to performance included Sea, Alphabet and Recruit Holdings.
• Sea – Stock gains in August were fuelled by better-than-expected second-quarter results driven by Sea’s gaming, e-commerce and financial technology businesses. The Singapore-based company announced expansion of its e-commerce applications in India, a market in which it’s already found success through the online game "Free Fire."
• Alphabet – Google parent Alphabet benefited from the economic reopening and a subsequent recovery in advertising spending. The stock received an additional bump following its introduction of the new Google smartphone, the Pixel 5a.
• Recruit Holdings – The stock of the Japan-based staffing services firm gained on news of a 40% jump in revenue for the first half of 2021 compared to the same period a year ago. A surge in hiring that led to robust demand for sponsored job advertising drove results in the company’s human resources technology segment.
Detractors from performance included Visa, Aptiv and FMC. • Visa – The stock fell early in the month on concerns around the impact of the delta variant on cross-border travel spending. Although the impact of COVID-19remains a transitory risk for Visa, the investment team remains constructive on the stock..
• Aptiv – The automotive parts maker detracted as supply chain interruptions caused automobile plants to close
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-8.pdfJuly, 2021
The Fund produced a strong absolute return in the June quarter that was marginally behind the index return. For the 12 months to 30 June 2021, the Fund is comfortably ahead of the index return.
The key positive contributors to performance included Avantor, Adobe and Cheniere Energy. • Avantor – Strong quarterly earnings growth lifted the stock of Avantor, a developer of scientific and technical instruments. Avantor has announced plans to purchase RIM Bio, a China-based maker of single-use bioprocess bags, allowing the company to build its presence in the single-use manufacturing network in the Americas and Europe.
• Adobe – Consensus-beating quarterly earnings, better-than-expected third-quarter revenue guidance and news that several analysts had increased their price targets for Adobe’s stock contributed to share strength in June. The company’s document cloud revenue was up significantly in the quarter, and digital media revenue was up strongly as well.
• Cheniere Energy – A recovering economy and higher crude oil prices buoyed the energy sector, where liquefied natural gas company Cheniere was a standout performer. An acceleration in earnings growth is anticipated as new liquefaction facilities increase production volumes and capacity beyond consensus estimates.
Detractors from performance included Ping An Insurance Group, Booking Holdings and HDFC Bank. • Ping An Insurance Group – The value of new business is recovering from the pandemic but at a very inconsistent pace, pressuring the stock of insurer Ping An. A reform of motor Insurance pricing in China and uncertainty around the acquisition of a fintech firm that recently emerged from bankruptcy also detracted.
• Booking Holdings – The travel company fell mid-month on the news that its CEO had been hired elsewhere. Booking fell further along with other travel and leisure companies later in the month on concerns that earnings do not support recent share price inflation.
• HDFC Bank – Stock of the India-based bank fell as investors digested cautionary comments by management around asset quality. Despite the short-term uncertainties, HDFC remains poised to benefit from expanding middle-class demand for banking services and mortgages. India’s consumer credit market remains underpenetrated.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0617AU-fund-focus-2.pdfJune, 2021
The Fund produced a solid absolute return in the June quarter, edging ahead of the index return. For the 12 months to 30 June 2021, the Fund is also ahead of the index return.
The key contributors to performance included IQVIA Holdings, Avantor and Vertiv Holdings.
• IQVIA Holdings – The life sciences analytics and technology firm beat quarterly revenue and earnings expectations and revised full-year estimates upward. Driving gains are a contract to manage a COVID-19 clinical trial and the move to full ownership of Q2 Solutions, previously co-owned with Quest Diagnostics.
• Avantor – Strong quarterly earnings growth lifted the stock of Avantor, a developer of scientific and technical instruments. Avantor has announced plans to purchase RIM Bio, a China-based maker of single-use bioprocess bags, allowing the company to build its presence in the single-use manufacturing network in the Americas and Europe.
• Vertiv Holdings – Stronger than expected first quarter revenue lifted shares of the electronic instrument and controls firm. Top-line growth is benefiting from strong demand for electrical and cooling systems at data centres. Management guidance continues to sound very supportive of its current growth trajectory.
Detractors from performance included HDFC Bank which fell as investors digested cautionary comments by management around asset quality. Despite the shortterm uncertainties, HDFC Bank remains poised to benefit from expanding middle-class demand for banking services and mortgages. India’s consumer credit market remains underpenetrated
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-5.pdfMay, 2021
The Fund produced a solid absolute return of in May although it was marginally behind the index return for the month. For the 12 months to 31 May 2021, the Fund is comfortably ahead of the index return.
The key contributors to performance included Stellantis and NXP Semiconductors.
• Stellantis – The car manufacturer recently reported strong first-quarter results, including a notable jump in revenue and total vehicle shipments. Stellantis has proven adept at navigating the global shortage of semiconductor chips used in automobiles. • NXP Semiconductors – Increased demand for cars, a major end market for semiconductors, has driven global chip shortages for several months. NXP’s stock has benefited from the nearly crisis-level shortage.
Detractors from performance included Etsy, ServiceNow and Amazon.
• ETSY – The stock of online specialty retailer Etsy dropped for the month as markets reevaluated the prospects of companies that benefited from stay-athome orders and rotated into more cyclical names. • ServiceNow – Software company ServiceNow saw its stock decline as its outlook for second- and third-quarter billings was lower than expected. Management’s acquisition and divestiture announcements did not help buoy investor sentiment. • Amazon – Amazon stock dipped, detracting from relative results. The retail and streaming giant faced concern that its business model would suffer as consumers venture out post-pandemic. In addition, its deal to acquire Metro-Goldwyn-Mayer was met with a lukewarm response from the market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-3.pdfApril, 2021
Global stocks delivered strong gains in April, supported by an improved economic outlook and stronger-than-expected corporate earnings growth. Progress on vaccine distributions also raised hopes for a return to normal despite elevated COVID-19 rates in some regions. Reduced virus fears, improved job growth and additional measures implemented as part of the American Rescue Plan drove US stock gains. Meanwhile, close to a record number of US companies posted better-than-expected earnings results. Stocks in Europe and the UK also rose as the vaccine rollout accelerated andcountries eased lockdowns.
Stocks in Japan declined, as disappointing earnings reports and virus concerns weighed on sentiment. Nevertheless, Japan’s manufacturing sector grew at thestrongest pace in three years. Elsewhere, emerging markets stocks underperformed developed markets equities, as COVID-19 continued to challenge severalregions.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ZUR0580AU-fund-focus-1.pdfDecember, 2020
The Fund produced a solid return in the December quarter which was ahead of the index return. For the 12 months to December 2020, the Fund is comfortably ahead of the index.
The key contributors to performance included Roku, Aptiv and Samsung Electronics.
• Roku – The streaming provider continued its upward climb, as the pandemic kept consumers at home and watching more TV. Roku’s deal with HBO to provide HBO Max content boosted the run late in the quarter.
• Aptiv – The electric vehicle company rallied during the period on strong earnings reporting. The electric automobile industry saw a boost from the US election as the Biden administration is considered pro green technologies.
• Samsung Electronics - The stock of the electronics manufacturer and distributor continued to appreciate on positive sentiment stemming from a deal with Qualcomm Technologies to manufacture Qualcomm’s 5G chips and with Verizon Communications for indoor 5G network equipment.
Detractors from performance included Alibaba Group Holding and Equinix.
• Alibaba Group Holding – The e-commerce giant saw its stock price fall as Chinese regulators investigate its financial services arm, Ant Group. Ant Group’s initial public offering cancellation last month followed founder Jack Ma’s criticism of China’s increasingly heavy financial regulations.
• Equinix – The data centre operator reported earnings in line with expectations and continues to expand worldwide. Although the stock price has dipped, the company’s fundamentals remain strong and it should continue to lead the field.
asset_class: Foreign Equity
asset_category: Large Growth
peer_benchmark: Foreign Equity - Large Growth Index
broad_market_index: Developed -World Index
manager_contact_details: Array
ticker: ZUR0581AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.zurich.com.au/advisers/investments/managed-funds/global-growth-share-fund.html
Performance -> Download Latest Fund Focus Report
fund_features:
Zurich Investments Unhedged Global Growth aims to provide investors with long-term capital growth by investing in securities listed on international stock exchanges. The Fund aims to outperform the MSCI World (ex-Australia) Accumulation Index in $A (net dividends reinvested) over periods of five or more years. The Fund invests in securities with high growth potential that are primarily listed on international stock exchanges. The Fund will be fully unhedged at all times, providing investors with exposure to foreign exchange fluctuations as well as underlying share price movements.
structure: Managed Fund