We are pleased to provide you with a summary report on the performance of the WCM Quality Global Growth Equity Strategy (the Strategy) in November 2024.
The Strategy1 delivered a return of 11.69% during the month, outperforming the benchmark MSCI All Country World Index return of 4.34%. The Strategy has delivered returns in excess of the benchmark MSCI All Country World Index over one month, one, five and 10 years, and since inception.
Strategy Update
Global equities rallied strongly in November driven mainly by the positive reaction of the US market to the presidential election. The combination of Donald Trump’s victory and the Republicans gaining control of both chambers of Congress fuelled investors’ optimism of lower taxes, deregulation and expansionary fiscal policy. This led to both the S&P500 and NASDAQ indices reaching new highs during the month. In contrast, the election result was greeted with more caution outside of the US, particularly regarding the concerns over the new administration’s preference for higher import tariffs. This resulted in a weaker month for European, Japanese and emerging markets. At a sector level, the gains were broad based with the exceptions including Health Care and basic Materials. Factor performance diverged across regions. Growth outperformed in the US and Europe but was mixed elsewhere.
The outperformance of the Strategy in November was primarily driven by stock selection. Performance attribution analysis reveals that this strong stock selection was most evident in the Information Technology, Health Care and Communication Services sectors. The weaker sectors of the portfolio included Consumer Discretionary and Industrials. The largest positive contribution to relative performance came from the zero allocation to Utilities, while the above benchmark weighting in Health Care was the biggest detractor.
The strong performance of the Information Technology sector has been one the key contributors to global equity market returns in 2024. The Strategy has exposure to a number of the more recognised names in this sector including Microsoft, NVIDIA and Taiwan Semiconductor. One of the Strategy’s less well-known technology sector holdings – which contributed most to positive stock selection performance – is AppLovin, a Silicon Valley based advertising network and mediation platform firm. AppLovin’s software is designed to help game developers monetise players’ experience through in-app purchases (i.e. mediation) and collect and use data analytics to improve content. By operating both the advertising network and mediation platform, AppLovin enjoys unparallel data-powered synergies leading to superior economics and an expanding moat. Underpinning this moat growth is a strong, agile and adaptable culture led by co-founder and CEO Adam Foroughi.
Notes: 1. WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) have the same Portfolio Managers and investment team, the same investment principles, philosophy, strategy and execution of approach as those used for the WCM Quality Global Growth Strategy however, it should be noted that due to certain factors including, but not limited to, differences in cash flows, management and performance fees, expenses, performance calculation methods, and portfolio sizes and composition, there may be variances between the investment returns demonstrated by each of these portfolios and the WCM Quality Global Growth Strategy Composite (the Composite) in the future. As WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) have only been in operation for a relatively short period of time, this table makes reference to the Composite to provide a better understanding of how the team has managed this strategy over a longer period. Performance is net of fees and includes the reinvestment of dividends and income. 2. Composite inception date is 31 March 2008. 3. Benchmark refers to the MSCI All Country World Index (with gross dividends reinvested reported in Australian Dollars and unhedged). 4. Value Added equals Composite Performance minus Benchmark performance. 5. Annualised.
DISCLAIMER: AGP Investment Management Limited (AGP IM) (ABN 26 123 611 978, AFSL 312247) is a wholly owned subsidiary of Associate Global Partners Limited (AGP) (ABN 56 080 277 998), a financial institution listed on the ASX (APL). AGP IM has prepared this material for general information purposes only for WCM Global Growth Limited, a listed investment company (ASX: WQG).
AGP IM is the responsible entity for WCM Quality Global Growth Fund (Quoted Managed Fund) (ARSN 625 955 240) (ASX: WCMQ) and WCM Quality Global Growth Fund (Managed Fund) (ARSN 630 062 047).
AGP International Management Pty Ltd (AIML) (ABN 33 617 319 123) is the investment manager for WQG and is an authorised representative of AGP IM. WCM Investment Management, LLC (WCM) is the underlying manager and applies its WCM Quality Global Growth Equity Strategy (the Strategy), excluding Australia, in managing each of WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund)(the Funds). WCM does not hold an AFSL. WQG and CIML are part of the AGP Group.
Any references to ‘We’, ‘Our’, ‘Us’, or the ‘Team’ used in the context of the portfolio commentary, is in reference to WCM Investment Management, as investment manager for the Strategy or CIML as investment manager for WQG.
Even though the Strategy, excluding Australia, is applied to each of WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) certain factors including, but not limited to, differences in cash flows, fees, expenses, performance calculation methods, portfolio sizes and composition may result in variances between the investment returns for each portfolio. The performance of the Strategy is not the performance of the portfolios and is not an indication of how WQG, WCMQ and WCM Quality Global Growth Fund (Managed Fund) would have performed in the past or will perform in the future.
The material should not be viewed as a solicitation or offer of advice or services by WCM, AGP or AGP IM. It does not contain investment recommendations nor provide investment advice. It does not take into account the objectives, financial situation or needs of any particular individual. Investors should, before acting on this material, consider the appropriateness of the material.
Neither AGP IM, AGP, their related bodies corporate, entities, directors or officers guarantees the performance of, or the timing or amount of repayment of capital or income invested in the Funds or that the Funds will achieve its investment objectives. Past performance is not indicative of future performance.
Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided that the positions will remain within the portfolio of the funds. Any securities identified and described are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.
Investors should seek professional investment, financial or other advice to assist the investor determine the individual tolerance to risk and needs to attain a particular return on investment. In no way should the investor rely on information contained in this material.
Investors should read the Product Disclosure Statements (PDS) of the Funds or any relevant offer document in full before making a decision to invest in these products.
