By Tom Richardson
Source: Motley Fool
A lot of Australian investors will rightly be interested in investing in overseas share markets, as markets like the U.S. offer most of the world’s best companies, while Asian markets for example offer exposure to one of the great investing trends of the future – the rise of the Asian middle class.
One exchange traded fund that offers exposure to both these thematics is the WCM Quality Global Growth Fund (ASX: WCMQ) that invests in 20-40 stocks globally under the management of established California-based stock pickers WCM Investment Management.
The fund’s responsible entity and backer in Australia is Switzer Asset Management which is run by business personality Peter Switzer, among others.
The WCMQ Global Growth Fund has only been running since August 2018, but is already well ahead of its MSCI All Country World total return benchmark in returning 8.53% versus the benchmark’s -0.58%.
As an asset manager WCM runs multiple different funds and defines it’s guiding philosophy as: “WCM seeks quality growth businesses with superior growth prospects, high returns on invested capital, and low or no debt. Our team also requires each company to maintain a durable competitive advantage – what management terms an economic moat.“
This sounds good to me and further: “WCM suggests to never bet against a growth company with a good corporate culture that has a competitive advantage that is growing. It is not enough to invest in a company that has a huge competitive advantage, investors also need to look for companies that have a competitive advantage that is growing. That is the differentiator – and a way to avoid the value trap.“
Of course everyone would like to buy these kinds of companies as if they really do possess these qualities and trade on reasonable valuations then they’re likely to comfortably outperform the benchmark.
Finding these kind of great growth companies is easier said than done though, but let’s take a look at three great global companies it has in the WCMQ Global Growth Fund (ASX: WCMQ).
Shopify Inc. (NASDAQ: SHOP) – is the cloud-based e-commerce or “checkout” platform that lets any small-to-medium sized businesses sell its products online. It is growing like nuts (total March quarter revenue +50% to US$320m) thanks to the unsurprisingly huge demand for its platform and looks on a pathway to profitability. I love this stock as much as WCM and I am not surprised to see it as one of the portfolio’s largest holdings given WCM’s investment philosophy.
Visa Inc. (NASDAQ: V) will be familiar to all Australians and looks to still have a huge growth opportunity as the world moves cashless. Importantly, card payments are also growing in volume thanks to the rise of contactless payments for everyday goods like coffee or lunch. Visa also has a wide moat thanks to the scale, capital, and tech required to deliver these services.
Mercado Libre (NASDAQ: MELI) is an e-commerce retailer similar to Amazon that is focused on the fast-growing markets of Central and South America. Mercado Libre is also growing at strong rates and appears to have a moat or competitive advantage via its network effect (most sellers and buyers) and scale. It is another highly regarded tech and growth business that has a fast-rising valuation.
For me it looks like the fund offers investors exposure to some great global growth names and although its investment track record is not very long it is already 9% ahead of its benchmark.
Therefore the fund could be worth some more research, starting with reading the Product Disclosure Statement and potentially taking professional investment advice for any interested investors.
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.
