Price and Performance

For the month of February, the Company’s Total Shareholder Return and NAV Total Return were 0.9% and 3.4% respectively, with the MSCI All Country World Index (ACWI) benchmark returning 0.5%.

Over the month, the strong outperformance reflected improved returns from a wide range of stocks led by Baidu, delivering an absolute return of 18.2%. The company announced its intention to enter into the electric vehicles market by forming a strategic partnership with Chinese automaker Zhejiang Geely Holding Group, with the aim of developing environmentally friendly self-driving vehicles. In contrast, Salesforce.com Inc was the primary detractor from performance over February as it’s projected operating margins were weaker than expected following the acquisition of American software company Slack Technologies.

Within the Company’s portfolio, a position was initiated in FTI Consulting, an independent global business advisory firm specialising in the mitigation of risk and dispute resolution. It is expected that negative economic effects from the global pandemic will lead to an increase in litigation and restructuring for companies, which in turn will increase the demand for FTI’s advisory services. The position in BorgWarner, a leading automotive industry supplier, was eliminated following its share price and valuation appreciation, allowing for the Company to invest in more lucrative opportunities.

Over February, we liquidated the Lomas portfolio and spread the proceeds across the remaining Stock Pickers. We have maintained the gross gearing at the target level of 10%.