InvestNow News – 16th Jan 20 – Morphic Performance Report – December 2019
Ethical Investing in Focus
Drought, fires, smoke-filled skies and record high temperatures are a wake-up call to the world about the importance of tackling climate emergency. Growth in sustainable and responsible investing is expected to quicken in 2020 as the bushfires disaster encourages more people to seek funds that support environmental and social change.
Companies have been promising for years to come clean about their exposure to climate risk. But 2020 may prove to be the moment that investors finally force them to do it.
Portfolio review
The Fund fell 0.7% in December, versus global markets which fell 0.4% in AUD terms. Global equities rose 2.3% in USD terms, although market leadership shifted towards cyclicals.
In December, the US (+2.8%) lagged while the most cyclical region – Emerging Markets (+7.2%) – performed best. By sector, Tech Hardware (+7.8%) and Semiconductors (+7.6%) continued to lead performance, but these sectors were joined by Energy (+5.1%) and Materials (+5.0%) and Banks (+4.3%).
The Fund’s biggest contributor was Tencent, which proved well positioned for the sharp rally in emerging markets stocks over the month. Our long short pair in Italian Fund managers also proved profitable, confirming our view that Anima is a superior business to Azimut
On the other hand, the Fund’s biggest detractor was German forklift operator Jungheinrich, which announced disappointing guidance about its earnings prospects, which it blamed on slowing growth in Europe.