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Australian Financial Review: William McInnes

February 25, 2021

Pivot to virus winners drives record profit for Future Gen


William McInnes

A pivot to COVID-19 winners has helped the Future Generation Global Investment Company report its strongest operating profit on record.

The fund’s investment in Amazon, Starbucks, Tencent, Alibaba and Mastercard through its pro bono fund managers helped it deliver a return well above benchmark.

The Future Generation Global fund reported a 131 per cent increase in operating profit on Thursday, delivering a 19.4 per cent total shareholder return. The investment portfolio increased by 14.3 per cent, outperforming the MSCI AC World Index by 8.2 percentage points.

That was driven by the strong performance of underlying fund managers such as Munro Partners, which returned 41 per cent in 2020.

“The last calendar year was good for us performance-wise. We managed the COVID period well,” Munro Partners chief investment officer Nick Griffin said.

“We had some protection to survive COVID and we managed to pivot after COVID to pandemic winners like e-commerce, software and healthcare stocks.

“We do growth equities so fortuitously we were already positioned in a lot of these areas before the crisis so we understood these areas well.”

The Munro Global Growth Fund represents 6.8 per cent of gross assets in the Future Generation Global portfolio.

“We sold things like Airbus, our luxury goods companies and more economically exposed companies,” Mr Griffin said.

“Microsoft we held and doubled down at the lows, Amazon we held and also doubled down on the lows.

“Danaher was another company lifted, as they were integral to gearing up the world for vaccine production. This was just knowing where to go and going there quickly as the scale of the pandemic became clear.”

He said trends from the pandemic were set to continue.

“We think the habits from COVID will stick. Online grocery shopping, doing Zoom calls and working from home, the momentum hasn’t gone away yet,” Mr Griffin said.

“If you look at the latest results season, it’s probably the best in a few years, a lot of the COVID winners were saying ‘things have gotten even better’.”

Future Generation Global did not declare an additional dividend to the 2¢ a share distribution it paid in October.

“The board will consider a further dividend payment following the June 2021 half-year result, dependent on released profits from the underlying fund managers,” chairman Belinda Hutchinson said.

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