04 Apr Munro Global Growth Fund Monthly Report – March 2018
The Munro Global Growth Fund returned -2.5% for the month of March, comprising a return of -2.9% from equities and 0.4% from currency. The MSCI AC World Index (AUD) meanwhile returned -0.7% for the month, with -2.3% from equities and 1.7% from currency. The Fund remains positive for calendar year 2018, up 3.4%.
March was another difficult month for stocks with the US S&P 500 down 2.7%, the European STOXX index -2.3%, Hang Seng -2.4% and the Japanese TOPIX -2.9%. After weathering the volatility of February, the technology sector succumbed to the market wide draw downs that have plagued markets since January. Concerns around Facebook’s data collection practices triggered the selloff but ultimately the whole sector was becoming crowded and primed for profit taking after a strong start to the year. Fund weakness was driven by the so-called FANG’s (Facebook, Amazon, Netflix and Google) which make up 9.9% of Fund exposure, but also by the video game sector and software vendor Blue Prism.
Decisive action on reducing Fund exposure, option hedging and our currency holdings all helped to weather the volatility but ultimately the Fund delivered a negative return, with most of the relative underperformance versus the index driven by differences in currency hedging, where the Fund remains 70% hedged back to AUD.
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