WCM GLOBAL GROWTH LIMITED — Net Asset Value 2021

Sep 8, 2021

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WCM GLOBAL GROWTH LIMITED (ASX:WQG) INVESTMENT UPDATE AND NTA STATEMENT

31 August 2021

PERFORMANCE1	PORTFOLIO	MSCI ACWI (ex-AU)	VALUE ADDED2
1 Month	2.66%	3.02%	-0.36%
3 Months	14.78%	10.90%	3.88%
6 Months	21.26%	20.61%	0.65%
1 Year	31.38%	30.62%	0.76%
2 Year3	24.76%	18.17%	6.59%
3 Year3	23.69%	14.35%	9.34%
Inception3.4	22.25%	15.29%	6.96%

PORTFOLIO UPDATE

The portfolio delivered a return of 2.66% during the month, compared with the MSCI All Country World ex-Australia Index (the benchmark ) return of 3.02%. The portfolio has delivered returns in excess of the benchmark over three, six and twelve months, two years, three years and since inception.

Global equity markets chalked up their seventh consecutive monthly gain in August, with several major indices hitting multiple new all-time highs. The seven-month winning streak for European equities is the first time this has been achieved since the end of financial crisis in 2012. While COVID-19 infections linked to the Delta variant continue to rise across the globe, rising vaccination rates are allowing most major economies to avoid the need to return to economically crippling lockdowns. Economic data continues to show strong growth although some leading indicators, such as the purchasing managers’ indices, suggest the rate of this growth may be close to peaking.

Notes : 1. Portfolio return is calculated before expenses and after investment management and performance fees are paid. Performance includes the reinvestment of dividends and income. 2. Value added equals portfolio return minus benchmark return. 3.Annualised. 4. Inception date is 21 June 2017.

NET TANGIBLE ASSETS1 (PER SHARE)	31 AUG 2021	31 JUL 2021
NTA before tax 1.923 1.880
NTA after tax and before tax on unrealised gains 1.879 1.842
NTA after tax 1.666 1.636
Month end closing share price 1.645 1.610
Month end closing option price 0.145 0.135

With another (relatively) high inflation report in the US, markets took comfort from Federal Reserve Chairman, Jerome Powell’s speech at Jackson Hole, in which he suggested the spike in the consumer price index is likely to be temporary. As such, the market’s expectation is that a tapering of the Federal Reserve’s bond purchasing program will remain on hold until closer to year end. At a regional level, there was little difference between the returns of developed and emerging markets, the latter recovering from another China regulatory related scare earlier in the month. Performance dispersion was also limited at a sector level, with Materials the only sector posting a negative return. Factor performance varied by region. Growth and quality outperformed in Europe while value measures were favoured in the US and emerging markets.

Notes: 1. NTA is calculated after all fees and expenses and incorporates all company assets including WQG’s operating bank account. NTA per share is based on WQG’s issued capital of 177,179,328 shares as at 31 August 2021. Assuming the exercise of all WQG’s August 2022 Options, the Company’s fully diluted issued capital would be 234,102,572 shares and the adjusted NTA per share before and after tax would be $1.820 and $1.626

respectively.

	KEY DETAILS
	Report Date	31 August 2021
	ASX Code	WQG
	Investment Adviser	WCM Investment Management
		MSCI All Country World Index ex-
	Benchmark	Australia (with gross dividends reinvested reported in Australian
		dollars and unhedged)
	Number of stocks	20-40
	Maximum cash position	7%
	Stock universe	Global (ex-Australia)
	Portfolio size	$342.19m
	Shares on issue	177.18m
	Management Fee	1.25% (ex-GST)
	Performance Fee1 Hedging	10% (ex-GST) Unhedged

Portfolio relative performance during the month was helped by the overweight exposure to Technology and underweight position in Energy. Sector allocations detracting from performance included Consumer Discretionary (overweight in the portfolio relative to the benchmark) and the underweight position in Financials. Stock selection was positive in the Healthcare and Financials sectors, but a drag on performance in Technology and Consumer Staples.

Entegris, Inc. is an American provider of products and systems that purify, protect, and transport critical materials used in the semiconductor device fabrication process. The business is leveraging its superior technology, reputation and brand as well as its very sticky relationships with customers to expand its moat. Tailwinds include the growing complexity of semiconductor manufacturing that requires additional layers of materials.

Investment process is a key focus for capital allocators and researchers when forming a view on prospective money managers for their clients. A lot of this research focuses on the process money managers follow for identifying new investment opportunities. However, an equally important factor which often

Notes: 1. Performance Fee is 10% (ex-GST) of the Portfolio’s outperformance relative to the benchmark plus Management Fee and subject to high water mark. Maximum fee is capped at 0.75% of the closing market value of the Portfolio in each financial year.

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REGIONAL MARKETS ALLOCATION

gets overlooked is the manager’s sell discipline. WCM’s process, based on investing in companies with expanding economic moats with cultures aligned to their moat trajectory, is applied as both a buy and sell discipline. If the investment team can no longer make a case that a company’s moat is still expanding, it is sold regardless of recent performance or valuation. Positions can also be sold if the team identifies a more attractive opportunity than an existing one, or the investment thesis has played out and the valuation is no longer considered attractive to its long-term growth potential. A recent example of the former was the sale of Cooper Industries in favour of WuXi Biologics; and an example of the latter was the sale of Boston Scientific Corporation.

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Other
3%
Europe
16%
Asia Pacific
12%
Americas
69%
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HOW INVESTMENTS ARE CHOSEN FOR THIS PORTFOLIO

WCM’s two key criteria for any company to be considered for inclusion in the WCM Quality Global Growth Strategy are: 1) a rising competitive advantage (or expanding economic moat); and 2) a corporate culture that supports the expansion of this moat. WCM believes the direction of a company’s economic moat is of more importance than its absolute width or size.

Its research is therefore focused on identifying those companies with a positive moat trajectory as measured by a rising return on invested capital (ROIC) as opposed to those with a large but static or declining moat. WCM also strongly believes that corporate culture is a key determinant of a firm’s ability to achieve a consistently growing moat. WCM has developed a proprietary approach to analysing corporate culture and has investment team members solely dedicated to this part of its process.

WHO MANAGES THE PORTFOLIO?

WCM is a California based asset management firm specialising in active global and emerging market equities. Founded in 1976, the business is majority employee owned and manages over A$130.6 billion of assets (as at 30 June 2021) on behalf of institutional and retail investors around the world including Australia.

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PAUL BLACK CEO & Portfolio Manager WCM Investment Management

WCM GLOBAL GROWTH LIMITED

ACN 617 281 268 Level 6, 10 Spring Street, Sydney NSW 2000

T: 1300 001 750 E: invest@contango.com.au W: www.contango.com.au/funds/wqg

TOP 10 PORTFOLIO HOLDINGS	WCM GLOBAL GROWTH (%)
West Pharmaceutical Services	4.97
Stryker Corporation	4.93
Shopify	4.82
Sherwin-Williams	4.01
Thermo Fisher Scientific	3.59
LVMH (Moet Hennessy Louis Vuitton)	3.41
First Republic Bank	3.35
Old Dominion Freight Line	3.21
Amphenol	3.18
ServiceNow	3.17
Total	38.64

Notes: The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.

SECTOR BREAKDOWN	WCM GLOBAL GROWTH (%)
Information Technology	28.15
Health Care	20.04
Consumer Discretionary	18.65
Financials	10.42
Industrials	9.72
Consumer Staples	5.87
Materials	4.02
Cash	3.13
Total	100.00

DISCLAIMER: Switzer Asset Management Limited ( SAML ) (ABN 26 123 611 978, AFSL 312247) is a wholly owned subsidiary of Contango Asset Management Limited, a financial services business listed on the ASX ( CGA ). SAML and CGA are authorised representatives of ST Funds Management Limited (AFSL 416778) to provide general advice. Contango International Management Pty Ltd ( CIML ) (ACN 617 319 123, CAR number 1254169 of SAML) is the investment manager of WCM Global Growth Limited, a listed investment company ( LIC ) on the ASX (WQG). This material has been prepared for general information purposes only. It does not contain investment recommendations nor provide investment advice. Investors in LICs should understand the distinction between Investment Portfolio Performance, NTA Performance and Share Price return. Neither WQG, CIML, SAML nor their respective related entities, directors or officers guarantees the performance of, or the repayment of capital or income invested within WQG or any associated product or that WQG will achieve its investment objectives. Past performance is not indicative of future performance. Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided that the positions will remain within the portfolio of WQG. Any securities identified and described are for illustrative purposes only and do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. Investors should seek professional investment, financial or other advice to assist the investor determine the individual tolerance to risk and needs to attain a particular return on investment. In no way should the investor rely on information contained in this material. Investors should read any relevant offer document in full before making any investment decision. This material is not an offer to invest in any security or financial product. Relevant information relating to WQG can be obtained by contacting CGA or by visiting www.contango.com.au.