Nasdaq DW Global Momentum Q2 2023 commentary
|Asset classes||Global equities (including emerging markets, excluding US companies)|
|Investment style||Systematic investing based on stocks’ relative strength|
|Quarterly return||3.07% (net of fees)|
|Annualised volatility (since inception)||22.15|
Global equity markets generated positive performance in the second quarter of 2023. There are a number of factors that have contributed to a generally favourable environment for global equities in the first half of 2023, including continued moderation in inflation rates around the world, generally positive global economic growth (defying the predictions of many forecasters for a global recession) and better containment than expected in Russia’s war against Ukraine. Softening of energy costs in the first half of the year has also been a key contributor to stronger than expected global economic growth.
From a sector perspective, the largest exposure is currently to Industrials (19%) followed by Technology (15%).
From a country perspective, the strategy’s largest exposure is currently to the United Kingdom (13%) followed by Mexico (12%), and Argentina (9%).
Regional exposure is currently tilted towards Europe (49%) and Latin America (27%). This strategy is not constrained geographically so the exposure will change over time. Also, there is currently about 53% of the portfolio allocated to developed markets and 47% to emerging markets.
Portfolio performance (net of fees)
Top 10 portfolio holdings (as of 30/06/2023)
|Cemex SAB de CV|
|Mitsubishi UFJ Financial Group Inc.|
|Fomento Economico Mexicano SAB de CV|
|UBS Group AG|
|America Movil SAB de CV|
Best performing positions (note that the position may not have been held for the full quarter, but performance shown for the security is for the full quarter)
- (+35.61%) YPF Sociedad Anónima, an energy company, engages in the oil and gas upstream and downstream activities in Argentina. The company was founded in 1977 and is headquartered in Buenos Aires, Argentina.
- (+31.35%) Pampa Energía S.A. operates as an independent energy integrated company in Argentina. Pampa Energía S.A. was incorporated in 1945 and is based in Buenos Aires, Argentina.
- (+28.03%) CEMEX, S.A.B. de C.V., together with its subsidiaries, produces, markets, distributes, and sells cement, ready-mix concrete, aggregates, urbanisation solutions, and other construction materials worldwide. The company was founded in 1906 and is headquartered in San Pedro Garza García, Mexico.
- (+19.74%) Copa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services. The company was founded in 1947 and is based in Panama City, Panama.
- (+16.44%) Fomento Económico Mexicano, S.A.B. de C.V., through its subsidiaries, operates as a bottler of Coca-Cola trademark beverages. The company was founded in 1890 and is based in Monterrey, Mexico.
Worst performing positions (note that the position may not have been held for the full quarter, but performance shown for the security is for the full quarter)
- (-18.25%) Luckin Coffee Inc. offers retail services of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. Luckin Coffee Inc. was incorporated in 2017 and is headquartered in Xiamen, the People's Republic of China.
- (-10.87%) Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.
- (-10.13%) MercadoLibre, Inc. operates online commerce platforms in Latin America. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.
- (-8.29%) Tsakos Energy Navigation Limited provides seaborne crude oil and petroleum product transportation services worldwide. Tsakos Energy Navigation Limited was incorporated in 1993 and is based in Athens, Greece.
- (-7.09%) Trip.com Group Limited operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours and in-destination, corporate travel management, and other travel-related services in China and internationally. Trip.com Group Limited was founded in 1999 and is headquartered in Shanghai, the People's Republic of China.
After sharp declines in the global equity markets in 2022, there are encouraging signs of recovery in the first half of 2023.