Performance as at 31 December 2020
Performance is after the annual fund charge, and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.
What happened this quarter (3 months to 31 December 2020)
- International equity markets continued their stellar rebound in the final quarter of 2020 as the rollout of COVID-19 vaccines raised hopes of a strong economic recovery in 2021. The rally saw a number of markets we track hit record highs, erasing the early 2020 losses. Against this backdrop, the MSCI All Country World Index rose 12.5% over the quarter, in local currency terms.
- In the US, the S&P 500 and NASDAQ 100 both hit record highs, finishing the quarter up 11.7% and 12.9% respectively. For the NASDAQ 100, it closed 2020 up more than 40%, its best yearly performance in more than a decade.
- Meanwhile, in Asia, share markets continued to benefit from the strong post-COVID rebound of the Chinese economy. Over the quarter, the Shanghai Composite gained 7.9%, while Japan’s Nikkei 225 gained 18.4%.
- The fund’s growth manager, Franklin Investments, had another strong quarter, but it was the fund’s value manager that provided the strongest returns, comfortably beating the benchmark as some rotation out of growth and into value added performance. MFS and Vontobel also delivered positive returns over the quarter.
- The fund’s largest holding is in the broader S&P 500 index, which benefited performance with the index rising to a new all-time high, trading above 3700. The index rallied more than 70% from its March lows and closed the year up 16.3%.
- Also benefiting performance was the fund’s holding in Rolls-Royce Holdings. Shares in the company finished sharply higher after the company secured a deal with India’s Dharma LNG Terminal to deliver a gas-based power plant.
- Finally, Kohl’s Corporation was another strong contributor with shares in the retail chain finishing the quarter up more than 100%. The company benefited after announcing a partnership with beauty and personal care company Sephora. The deal will see Sephora open more than 800 shops in Kohl’s stores by 2023.
- Detracting from performance was the fund’s holding in German software company SAP SE. Shares of SAP fell more than 20% after it issued a profit warning saying the coronavirus pandemic would hit demand well into 2021. In addition, the company announced a 12% decline in operating profit and a 4% fall in total revenue.
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