Performance as at 31 March 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 March 2020)
- International equity markets had a tough first quarter of 2020 as the COVID-19 (coronavirus) outbreak worsened, bringing global growth and business activity to a halt. The sharp slowdown saw investor sentiment wane, resulting in double-digit losses for most major global indices. Against this backdrop, the MSCI All Country World Index fell 20.4%, in local currency terms.
- The bull market in US equities came to an abrupt halt, with major indices at one point falling as much as 30% from their record highs in mid-February. Over the quarter, the S&P 500 fell 20%, while the NASDAQ 100 fell 10.5%. It was much the same in Europe, with major indices ending the quarter sharply lower.
- In sector news, materials and energy were some of the worst-performing as the price of oil plunged towards $20 a barrel after a breakdown in production talks between Russia and Saudi Arabia, two of the world’s largest oil producers.
- The fund comprises of four individual investment managers, each with their own investing style. This adds diversity in the fund, with each manager performing differently over an investment cycle, offering protection in downturns, but not holding back performance during a market rally.
- Despite the negative returns, the fund was well-positioned in its underweight to the energy sector, which struggled as the price of oil fell more than 50% after a breakdown in production talks between Russia and Saudi Arabia, two of the world’s largest oil producers.
- Elsewhere, the fund’s holding of Regeneron Pharmaceuticals was another contributor after the healthcare giant reported better-than-expected FY 2019 earnings. Furthermore, healthcare was one of the best-performing sectors over what was a challenging first quarter.
- Detracting from performance was the fund’s long-standing holding of HDFC Bank. Shares in the company fell more than 30% due to a broad decline in the financial sector.
- Elsewhere, the fund’s underweight to Apple and Microsoft were also detractors as the two tech companies outperformed the market over the first quarter.
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