Foord Global Equity Feeder Fund

Monthly Commentary – September 2020

• Global equities (-3.2%) fell for the first time in six months, weighed down by benchmark-heavy tech stocks—a wave of IPOs, M&A and stock splits typically evident of excessive liquidity characterised the month
• US equities (-3.8%) declined on disappointing macroeconomic data and expiring stimulus measures—America’s unemployment rate is still high at 8.4%, with retail sales growth slowing dramatically in August
• The US dollar strengthened against most majors, weighing on emerging markets and commodities—gold (-4.1%) retraced some of its recent gains and oil (-9.6%) tumbled after Saudi Arabia cut prices for major customers
• Emerging markets (-1.6%) displayed mixed performance—commodity consumers such as India (+0.6%) (also on rumours of more stimulus) faring better than commodity producers such as Brazil (-7.1%) and Russia (-7.4%)
• On the geopolitical front, tensions between the US and China (-2.7%) remain elevated—the Pentagon said it would extend export restrictions to China’s biggest semiconductor manufacturer SMIC
• All sectors fell—energy (-12.1%), financials (-5.3%) and communication services (-5.1%) performed worst
• The fund performed in line with its benchmark—its non-tech Chinese investments mostly added value, while core holdings Alphabet (-10.1%) and Wheaton Precious Metals (-8.1%) weighed on performance
• The managers raised cash and added to portfolio hedges ahead of the volatility—market valuation levels remain stretched given the prevailing macroeconomic environment
• The rand (+1.1% vs the US dollar) gained materially against the dollar but lost ground latterly—on risk off sentiment as fears of renewed European COVID-19 lockdowns mounted

The standard charge rate is a fixed fee of 0.35% plus VAT. A 0.85% fixed amount fee plus 15% performance sharing fee is charged in the Foord Global Equity Fund.