Munro Partners has added exposure to its favoured ‘areas of interest’ to take advantage of sectors which will benefit in a post-COVID-19 world.
In a quarterly update to 30 June, 2020, Munro Partners said these areas included digital enterprise, digital payments, e-commerce and innovative health.
The largest of these was the digital enterprise sector, which was a 15.7% weighting in its Global Growth fund, and innovative health at 14.6%. Exposure to innovative health, in particular, increased between May and June from 11.5% to 14.6% while digital payments reduced from 14.3% to 10.8% over the same period.
“Many of our key portfolio holdings are now uniquely positioned to accelerate their market share dramatically as disruption speed, social distancing and the need to test the population becomes more prevalent,” the update said.
“With so many areas occurring at once post-COVID-19, we feel confident about the opportunities ahead of the medium to long term.
“That said, it would be naïve to think there are not more twists and turns in the road ahead given the global pandemic. While we are comfortable in our core holdings, we remain watchful for large market drawdowns and are prepared to use our capital preservation tools should they be required in the months ahead.”
One stock the firm highlighted, which contributed 1.4% to performance during the June quarter, was digital payment firm PayPal. This had benefited from the dual combination of increased online spending and the reduction in cash handling for fears of virus transmission.
“The 2020 COVID-19 pandemic has proved an accelerant for digital payments. As consumers have been required to stay at home, e-commerce has become an essential service for many, particularly to buy groceries and pharmaceutical products, and it has also benefited from the shift in spending away from travel and entertainment,” Munro said.
“Elsewhere, cash has been deemed a virus transmitter, with many businesses and individuals choosing to no longer accept it as a form of payment.”
The Munro Global Growth fund has returned 19.1% over the first half of 2020 versus losses of 4% by its MSCI ACWI benchmark.
Performance of Munro Global Growth fund versus MSCI ACWI benchmark since start of 2020 to 30 June 2020
