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Munro Global Growth Fund Monthly Report – December 2018

The Munro Global Growth Fund returned -1.4% for the month of December, comprising a return of -2.7% from equities and +1.3% from currency. The MSCI AC World Index (AUD) meanwhile returned -3.6% for the month (-7.3% from equities and 3.7% from currency).

Munro Global Growth Fund Monthly Report – December 2018

For the 2018 calendar year, the Munro Global Growth Fund returned 2.6%, with +0.1% coming from equities and +2.5% from currency. The MSCI AC World Index (AUD) return for the calendar year was +0.6% (-7.7% from equities and +8.3% from currency).

It was a particularly negative month for global equity markets in local currencies, with the US S&P 500 down 9%, the Japanese TOPIX fell 10.3%, and the European STOXX index declined by 5.4%.

The key events for the month were the reaction to the ongoing US-China Trade War tensions and the actions of the US Federal Reserve, where most participants were disappointed with the Fed choosing to maintain its tightening bias in December.

On a stock-specific basis, there were few hiding places in what was a widespread sell-off in global equity markets. For the month, the best performers were all short positions, such as Yaskawa Electric, H&M, and VAT Group. Detractors for the month included Amazon, Blue Prism, and Microsoft.

On currencies, the Fund remains predominately hedged with a 35% holding in foreign currencies mainly in USD.

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