05 Nov Munro Global Growth Fund Monthly Report – October 2018
The Munro Global Growth Fund returned -5.4% for the month of October, comprising a return of -6.4% from equities and +1.0% from currency. The MSCI AC World Index (AUD) meanwhile returned -5.6% (-6.9% from equities and 1.4% from currency).
October was a difficult month for global equities. None of the major markets were spared in the month with the US S&P 500 down 6.8%, the NASDAQ fell 9.2%, the European STOXX index fell 5.5%, the Japanese TOPIX declined 9.4% and the Hang Seng Index dropped 10%.
The market was beset by worries over rising interest rates, trade tensions and a slowing global economy. With the US mid-term elections in early November, there was a lack of desire to “buy the dip” prior to this event taking place. For the Fund, our capital protection tools added value for the month, while our long positions were under significant pressure in what can be best described as extreme profit taking and de-risking by market participants. Long-term fund holdings Blue Prism, Amazon and Activision Blizzard were all down significantly for the month.
On currencies, the declining AUD benefited the Fund by 99 basis points (with the Fund maintaining 60% hedging back to the AUD). The fully unhedged index by comparison received a 135bps tailwind from foreign exchange movements.