Performance as at 30 June 2021
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 June 2021)
- Global share markets moved higher in the second quarter of 2021, thanks in part to a strong earnings season and some easing of inflationary concerns. The strong showing saw several indices reach all-time highs. Against this backdrop, the MSCI All Country World Index gained 6.6%, in local currency terms.
- In the US, equities continued their strong showing. The best-performing index was the growth-orientated NASDAQ 100, which gained around 10%. The outperformance of growth stocks came as government bond yields drifted off recent highs, making growth assets more attractive.
- Over the quarter, value or cyclical stocks began strongly as rising bond yields and inflation expectations meant they were in favour. However, as bond yields drifted lower, growth stocks regained their footing and closed the quarter strong. This up-and-down saw the fund’s two core managers, MFS and Vontobel outperform growth manager Franklin and value manager LSV.
- In stock-specific news, the fund’s holding of Shopify was a strong contributor, with shares in the company gaining more than 25% over the quarter. This was due in part to news the company was solidifying its relationship with Google, making it easier for its merchants to reach shoppers via the search engine giant.
- Another strong contributor to performance was the fund’s overweight to LVMH Moet Hennessy Louis Vuitton. Shares in the luxury goods retailer continued their recent surge as consumer spending showed no signs of slowing. In April, the company reported 2021 first-quarter revenue of €14 billion, up more than 30% from the same period last year, driven largely by its fashion & leather goods and its wine & spirits divisions.
- Holding back gains was the fund’s position in Haemonetics. The global provider of blood and plasma supplies and services finished the quarter sharply lower, trading to its lowest level in more than three years. The steep decline came after one of its largest customers – CSL Pharma – said it would not be reviewing its Plasma Collection System contract with Haemonetics, which is set to expire in 2022. In 2020, CSL contributed more than 10% to the company’s total revenue.
- Finally, weighing on performance was the fund’s holding of Chinese private education and tutoring company TAL Education Group. Shares in the company fell to their lowest level since 2017 amid ongoing fears the Chinese government will crack down on the sector. In recent years, the market for private tutoring has surged, raising concerns around the cost to raise a child at a time when the government is encouraging people to have more children.
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