06 Feb Munro Global Growth Fund Monthly Report – January 2019
The Munro Global Growth Fund returned +2.1% for the month of January, comprising a return of +3.5% from equities and -1.3% from currency. The MSCI AC World Index (AUD) meanwhile returned +4.2% for the month (+7.2% from equities and -3.1% from currency).
Global equity markets rebounded strongly following the previously weak month of December. The key event for the month was the “Powell Put”. Federal Reserve Chairman Jerome Powell announced on January 4ththat they would be patient which was taken as code for a pause in rate hikes. This led to a strong relief rally in stock markets that continued as Powell again reinforced his dovish pivot at the official Fed meeting later in the month.
On a stock-specific basis, several of the Fund’s holdings saw strong earnings upgrades, with share prices appreciating significantly. Positive performance for the Fund was driven by ServiceNow which reported strong quarterly results; Stryker Corp and Boeing. On the negative side, the Fund gave back some of its Q4 gains on option hedging and short positions which were a considerable drag on relative performance.
On currencies, the Fund remains predominately hedged with a 40% holding in foreign currencies, mainly in USD. The USD weakened for the month this resulted in a 130 bps loss for the Fund from foreign exchange movements. By comparison, the fully unhedged index lost 310 bps from currencies.