Global Growth Equity Fund

Risk Considerations

The Fund is actively managed and invests mainly in a diversified portfolio of shares of companies that have the potential for above-market average and sustainable rates of earnings growth (i.e. a growth-style oriented portfolio in aggregate). The companies may be anywhere in the world, including emerging markets.
Investment in the Fund involves risks, including general investment risk, equity market risk, style risk, geographic concentration risk, emerging markets risk, risk associated with high volatility of equity markets in emerging countries, risk associated with regulatory/exchanges requirements of the equity markets in emerging countries, risks associated with depositary receipts, exclusion criteria risk and currency risks which may result in loss of a part or the entire amount of your investment.
The Fund may use derivatives for hedging and efficient portfolio management and is subject to derivatives risk. Exposure to derivatives may lead to a risk of significant loss by the Fund.
The value of the Fund can be volatile and could go down substantially.
Investors should not invest in the Fund solely based on this website.

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Overview

Manager's Outlook

The investment landscape?marked by extreme inflation, tightening financial conditions, slowing growth, decelerating corporate earnings, and continued geopolitical risks?remains challenging. We are operating in an environment of rapidly changing and powerful economic factors by focusing on our "core basics" of following a truly idiosyncratic, sector-balanced approach that leverages our extensive research platform to invest in what we believe are well-run, durable growth compounders?stocks that should provide a solid return outcome in a lower-growth environment with meaningfully reset valuations.

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The ongoing conflict in Ukraine has led to extreme commodity price inflation that has rippled through the global economy, and COVID-related headwinds have continued to disrupt supply chains. Outside of China, the rest of the world has reopened, and the higher inflation that was once thought to be transitory is likely to remain higher for longer than we had thought. With central banks now laser focused on reigning in inflation, we are operating in a higher interest rate world with rising risks of a recession.

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Despite near-term uncertainty, we believe the market environment is still positive for equities and growth in the medium and longer term. While recession has become a broadly consensus view, it would likely be one of the most telegraphed recessions in history, and we would expect it to be short lived. Even though we are clearly in a new rate environment with the Federal Reserve going at a steeper and quicker pace than we anticipated, real rates remain negative and should remain very low for the medium term, which would be supportive for global growth equities. We believe the sharp downturn in equities has also removed much of the fundamental excess valuation in many stocks, which should provide for more compelling opportunities.

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We are cognizant of building the portfolio for tomorrow, rather than owning what has worked in the recent past. Despite the challenges of 2022, we have high conviction in our current positions with a strong enduring bias toward companies in highly attractive industries where dynamics such as low penetration and long runways will lead to high and sustained levels of growth. Extending our return horizon and thinking beyond the short-term market narrative have allowed us to be contrarian in the past and have contributed to our longer-term outperformance.

Strategy

Fund Summary

We seek to invest in high-quality, durable businesses with sustainable growth prospects. We look for companies in attractive industries with improving fundamentals and potential for above-average and sustainable rates of earnings growth, when we believe valuations offer us high conviction, upside potential. The manager is not constrained by the fund's benchmark, which is used for performance comparison purposes only.

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

30-Nov-2023 - Scott Berg, Portfolio Manager,

Global equities advanced strongly in November amid hopes that major central banks may not have to raise interest rates further to combat inflation. Within the portfolio, our holdings in the energy sector detracted the most from relative performance. Shares of a large oil field services company declined as falling oil prices pressured energy names. We believe the company is the technology leader in its field with the greatest scale and best reputation with customers. In our view, the firm is also well positioned to benefit from increased international spending that we expect to occur both onshore and offshore and across commodities. On the positive side, stock selection in information technology helped relative returns. Shares of an e-commerce omnichannel platform surged following the release of stronger- than-expected third-quarter earnings and fourth-quarter revenue guidance. Management noted that third-quarter gross merchandise value strength was primarily driven by merchant growth across the platform. We think the company is well positioned for accelerating returns given the fact that its strategic positioning as the digital operating system for smaller merchants has only strengthened over the last couple years, and recent plans for increased monetisation are encouraging.

30-Nov-2023 - Scott Berg, Portfolio Manager,

We are positioned overweight in the materials sector. In metals and mining, we have thoughtful exposure to steel, copper, and lithium. We have also maintained a diversified approach that includes positions in chemicals, where the Russia–Ukraine conflict has contributed to increased demand and tightening supply, and construction materials. We see the materials sector as an opportunity to own companies that will have a positive impact on sustainability and the environment but also recognise we could be in a prolonged period of higher commodity prices due to the situation in Ukraine.

30-Jun-2022 - Scott Berg, Portfolio Manager,

We sold shares of Amazon.com to manage our position size. We continue to have a favorable view of the company's cloud business and think its advertising business should continue to grow nicely as well. However, results over the next couple of quarters are likely to be somewhat challenged in a weaker consumer and economic environment, and we chose to scale back the magnitude of our bet.
We sold shares of European fashion retailer ASOS. The company faces a challenging macroeconomic backdrop as European consumers wrestle with rising inflation and slowing growth, made more acute due to its proximity to the Russia-Ukraine conflict. As such we chose to reallocate to names where we have higher conviction.
We purchased shares of BHP, which provides exposure to a portfolio of some of the highest-quality mining assets in the industry, mainly focused on iron ore, copper, and metallurgical coal. The company has a solid management team that we believe is executing well. The company recently spun out its petroleum business and prior to Russia's invasion of Ukraine had intensified its focus on potash. The company generates substantial cash and is one of the biggest dividend payers globally.
We purchased shares of Sweden-based mining and smelting company Boliden. We think Boliden is one of the highest-quality names in the metals and mining space, with a thoughtful yet opportunistic management team that has a history of creating value for shareholders by investing countercyclically, keeping leverage low, lowering costs through efficiencies and technology, and dampening volatility with its smelting business.
We purchased shares of Baker Hughes, one of the world's largest oil field services companies. With the ongoing conflict in Ukraine, the global energy supply chain will need to be retooled, and we think Baker Hughes will be a beneficiary of a multiyear runway of increased capital expenditures to help with that retooling, particularly on the natural gas and liquefied natural gas side.
We bought shares of European oil and gas exploration and production firm Galp Energia. We think Galp Energia offers unique and high-quality exposure to European energy, with a diversified asset base and good balance sheet. In particular, we think the company's Brazilian pre-salt and Mozambique liquid natural gas assets offer a long runway for growth.
We sold shares of Argenx, an antibody platform company developing novel therapies in autoimmune diseases and cancer, on strength. The company's therapy Vyvgart has a best-in-class profile with a first-mover advantage across several indications, and we think some earlier stage programs such as ARGX-117, which is a novel complement (C2) inhibitor, could be sources of long-term value creation for the company.

30-Jun-2022 - Scott Berg, Portfolio Manager,

Shares of electric vehicle maker Rivian Automotive traded sharply lower during the period. The stock sold off following its IPO lockup expiration in early May and was also hurt by supply chain constraints that continued to negatively impact near-term production. However, management subsequently reaffirmed its 2022 production guidance and indicated it was scaling back on some investments and capital expenditures, which helped diffuse near-term liquidity concerns that also weighed on the stock. We remain confident in the long-term fundamentals of the business and view Rivian as an outstanding and unique opportunity to participate in the automotive industry's most powerful secular trend of electrification.
Shares of Snap plunged after the company lowered revenue guidance in late May as the macro environment deteriorated further and faster than management had anticipated, which has put downward pressure on advertiser budgets. However, we continue to have a positive view of the company longer term as engagement, user scale, product velocity, and innovative posture all show very positively despite the near-term economic headwinds.
A position in chemical company Albemarle contributed to relative results as the stock moved higher after the company reported a sizeable earnings beat and raised full-year guidance driven by stronger lithium numbers. While lithium prices have experienced near-term outsized gains, we think we are on the cusp of a structural lithium upcycle driven by electric vehicle adoption hitting the S-curve and continue to appreciate Albemarle's position in the industry.

Risks

Typical Investor