The Munro Global Growth fund has benefited from its exposure to technology, particularly the e-commerce giant Amazon which has seen 26% higher sales this year.
The fund’s top five holdings were all technology companies and it was the largest sector weighting in the fund at 43%, significantly higher than its second-largest weighting of 14% to communication services.
In its monthly factsheet, the firm said its top five contributors during April were Amazon, which contributed the most at 170bps, Alphabet, Microsoft, Facebook and PayPal.
During April, the best of these five stocks was PayPal which saw its share price rise 35% followed by 29% gains for Amazon and 28% rise for Facebook.
“Equity markets bounced back strongly over the month as worldwide COVID-19 curves flattened and the US Federal Reserve effectively underwrote corporate credit markets, which combined to help recent volatility subside,” Munro said.
“The fund benefitted from its holdings in internet giants Amazon, Alphabet and Facebook while software companies Microsoft and ServiceNow also provided strong performance for the month.”
In its results for the first-quarter of 2020, Amazon said it had revenue of US$75.4 billion and 26% higher sales, rising from $35.8 billion in the same period a year ago to $46 billion.
Munro said the appeal of Amazon was its “unique role” in society and had been its top holding since the fund’s inception in 2016. It was currently a 7.7% weighting in the fund.
“We have always been attracted to its leadership in two areas of major structural change in e-commerce and cloud computing.
“As we enter the next decade, Amazon looks set to benefit from its rapid expansion over the last 10 years as it becomes an increasingly important to our way of life in a post COVID-19 world.
“In this time of social distancing, Amazon’s e-commerce business has been vital to keeping the wheels of commerce moving. Consumers are increasingly relying on e-commerce as a form of accessing goods, while sellers can also rely on Amazon’s extensive third party e-commerce platform to help them get their products to market.”
However, detractors from performance came from its short positions in BMW and American bank First Republic. The fund currently had seven short positions in place.
The Munro Global Growth fund returned 15.6% over one year to 30 April, 2020 versus returns of 3% by its MSCI ACWI benchmark, according to FE Analytics.
Performance of Munro Global Growth fund versus MSCI ACWI index over one year to 30 April 2020
