Performance as at 30 September 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 30 September 2020)
- For the most part, international equity markets continued their strong post-COVID-19 recovery in the third quarter, with indices in the US hitting record highs. Gains eased in the final weeks of the period as a pick-up in volatility saw some stock markets retreat. Still, it was another strong quarter for most markets. Against this backdrop, the MSCI All Country World Index gained 6.5%, in local currency terms.
- In the US, tech stocks had a strong quarter, with the NASDAQ 100 rising to a record high, eventually closing up 12.4%. Once again, it was the large-cap companies that lead the way – in particular Apple, which gained more than 20% and its market-cap rose above $2 trillion. Elsewhere, the broader S&P 500 finished the quarter up 8.5%, also trading at an all-time high.
- There were also strong gains in Asia, with the Shanghai Composite gaining 7.8% and the Nikkei 225 finishing up 4.0%. Gains in China came as the country continued to post strong economic data, showing signs it was bouncing back after the COVID-19 struggles that began the year.
- The fund comprises four individual investment managers, each with their own investing style, which enables diversification and protection in volatile markets, but not holding back gains during a stock market rally.
- The fund’s underweight position in energy company Exxon Mobil was of particular benefit, with shares in the oil giant falling more than 20% over the quarter. The decline came as investors began to price in a cut to the company’s dividend amid financial struggles due to the coronavirus pandemic. Furthermore, the company announced it would be cutting its 401(k) contributions to employee’s retirement plans – further signs of the financial strain on the company.
- Another strong contributor to performance was the fund’s holding of United Parcel Service. Shares in the company had a bumper quarter, rising more than 50% after it reported better-than-expected second-quarter earnings with net income rising to a record US$1.77 billion, or $2.03 a share.
- Holding back gains was the fund’s underweight position in two of the most notable performers during the quarter – Tesla and Apple. Shares in Tesla had a stellar quarter, rising nearly 100% as the electric vehicle maker saw broad-based investment from retail investors banking that the company can continue to dominate the electric vehicle market. Meanwhile, the coronavirus pandemic showed no signs of denting iPhone maker, Apple. Shares in the world’s largest listed company hit a record-high, which saw the market cap of the company pass US$2 trillion – the first listed company to achieve this.
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