There is an era of ‘new staples’ in markets with companies like Microsoft offering as reliable returns as traditional consumer staples like Nestle and Procter and Gamble.
In a webinar, Nick Griffin, chief investment officer at Munro Partners, said the company was seeking ‘new staples’, those companies which had attractive free cashflow yield, were steadily growing and becoming an essential part of people’s lives.
Examples included Microsoft and Visa at one end of the risk curve and other newer firms such as Atlassian and DocuSign at the other.
“Microsoft is as close to a staple as you can find today, there are better opportunities there than buying a bond. You can put your money in the bank or you can buy Microsoft,” he said.
“Meanwhile, DocuSign has taken over, people won’t keep using wet signatures, but you have to pay a big premium for it.
“Both companies look good but one is more risky. We expect people to keep creeping up the risk scale towards companies like DocuSign. These are the companies that have invested to deal with the crisis and are impervious to economic risk, they have proved a safer place to be.”
Technology companies were a big part of the Global Growth fund’s portfolio with the fund holding four holdings in digital enterprise, four in digital payments, four in internet disruption, three in high performance computing and two in e-commerce.
This theme had been helped by the pandemic with habits built up such as video conferencing unlikely to be stopped once the pandemic was over.
The Munro Global Growth fund had returned 23.1% over one year to 30 June, 2021, according to FE Analytics, versus returns of 15.6% by the absolute return sector within the Australian Core Strategies universe.
