The Magellan Global fund’s exposure to Microsoft has boosted the fund as the stock became the beneficiary of the move to online working.
The technology stock is the fund’s top holding at 8.5% and shares have risen 26% in the past month to 15 April.
In a monthly update, the firm said: “Microsoft surged to a record high over the quarter after its cloud business helped the software giant beat earnings and revenue forecast for the fourth quarter of 2019 and then held up relatively well after it was judged a stock that would benefit from the world’s switch to online due to the pandemic”.
However, it was a different story for the fund’s hospitality exposure in Yum! Brands and Starbucks which had performed poorly as a result of the COVID-19 restrictions.
The firm had previously said it was ‘monitoring exposure’ to these sectors but remained optimistic because of the possibility for drive-through sales and strong recovery once the crisis was over.
“Yum! Brands and Starbucks fell as their outlets were closed when countries ordered lockdown or restrictions on restaurants to stop transmission of the virus – though the decline in Yum! Brands first started when the owner of KFC, Pizza Hut and Taco Bell restaurants reported a 2% decline in Pizza Hut’s same-store sales for the fourth quarter.”
Other stocks which dented performance were a 5.6% holding in Facebook after advertising fell and exposure to HCA Healthcare after elective surgeries were deferred in order to treat COVID-19 patients.
Last year, the fund’s manager, Hamish Douglass was named one of FE fundinfo/ Money Management’s inaugural Alpha Managers. The award was given to the top 10% of managers who had outperformed their peers over their careers.
According to FE Analytics, the Magellan Global fund has lost 1.1% over the three months to 31 March, 2020 versus losses of 9.5% for its benchmark MSCI ACWI.
Performance of Magellan Global versus MSCI ACWI over tthe three months to 31 March, 2020
