Section Hero Funds

Global Fund

Global Fund

1Q18 Commentary1

Global equity markets rode a wild roller coaster in the first quarter of 2018. Enthusiasm for recently implemented U.S. tax cuts propelled U.S. equity indices sharply higher early in the quarter. This in turn lifted U.S. interest rates, but was met by a falling U.S. dollar. Domestic market momentum spilled over into shares in emerging markets which rose at near double-digit rates.

 

Later in the quarter, however, fears of a “global trade war” and concerns about technology company breaches of user data privacy catalyzed a broad sell-off. Many of the global indices, excluding the tech-heavy NASDAQ Composite Index2, finished the quarter modestly down.

 

For the quarter, the S&P 500 Index2 fell by -0.76% while the NASDAQ Composite Index rose by +2.59%. Meanwhile, the MSCI Euro Index2 fell by -0.42% and the Nikkei2 fell by -5.14% (in local currency). The relative underperformance of Europe and Japan reflects the fact that U.S. shares rose much more dramatically early in the quarter.

 

The MSCI Emerging Markets Index2 followed a pattern similar to U.S. shares, registering a +1.42% gain for the quarter. Chinese shares fared worse (MSCI China Index2 fell -1.63% in local currency), no doubt reflecting the announcement of proposed U.S. tariffs on a number of Chinese products, which came late in the quarter.

 

In terms of the underlying dynamics of equity market performance, growth-oriented stocks had the upper hand and outperformed their value counterparts as the MSCI ACWI Growth Index2 and the MSCI ACWI Value Index2 posted returns of 0.67% and -2.62%, respectively.

The Marsico Global Fund posted a return of 6.37% for the first quarter and outperformed its benchmark, the MSCI All Country World Index2, which returned -0.96%.

Primary Contributors4An overweight allocation and stock selection in the strong-performing Information Technology sector3 were the primary drivers of performance during the period.  The Fund also benefitted from stock selection in the Consumer Discretionary sector. Stock selection was strong in the Industrials and Health Care sectors as well.

Primary Detractors4: Stock selection in the Energy sector detracted from performance due ring the period.

 

For more information, please click here for the Marsico Global Fund Quarterly Investment Update.

 


1 Performance data quoted represents past performance. Past performance is no guarantee of future results. A Fund's performance, especially for short time periods, should not be the sole factor in making an investment decision. Please keep in mind that our views on investments discussed herein are subject to change at any time and the holdings represented here do not represent all of the securities purchased, sold, or recommended by Marsico Capital Management, LLC ("MCM"). Certain less-material factors may not be presented.

2 The MSCI All Country World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI Growth Index captures large and mid cap securities exhibiting overall growth style characteristics across 23 Developed Markets (DM) countries and 23 Emerging Markets (EM) countries. The growth investment style characteristics for index construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend. The MSCI ACWI Value Index captures large and mid cap securities exhibiting overall value style characteristics across 23 Developed Markets countries and 23 Emerging Markets (EM) countries. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. With 1,298 constituents, the index targets 50% coverage of the free float-adjusted market capitalization of the MSCI ACWI Index. The S&P 500 Index is a registered trademark of S&P and is an unmanaged broadly-based index of the common stock prices of 500 large U.S. companies, and includes the reinvestment of dividends. The MSCI Emerging Markets Index captures large and mid-cap representation across 23 Emerging Markets (EM) countries. With 835 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The NASDAQ Composite Index is the market capitalization-weighted index of approximately 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. The MSCI China Index captures large and mid cap representation across China H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). With 12 constituents, the index covers about 85% of the China equity universe. The MSCI Euro Index captures large cap representation across the 10 Developed Markets countries in the European Monetary Union (“EMU”). With 124 constituents, the index covers approximately 70% of the free float-adjusted market capitalization of the EMU. The Nikkei 225 Stock Average Index is a price-weighted index comprised of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange, excluding ETFs, REITs, preferred equity contribution securities, and tracking stocks (on subsidiary dividend), etc., other than common stocks. Sources of foreign exchange rates may be different be­tween a portfolio and the benchmarks. The indexes mentioned above are unmanaged and not available for direct investment. For comparison purposes, it should be noted that the indexes do not charge fees and have no expenses.

3 Sector and industry weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s (“S&P”), and is licensed for use by MCM. Neither MSCI, S&P, MCM, nor any third party involved in compiling GICS makes any express or implied warranties or representations with respect to such standard or classification (or the results from use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any such standard or classification. MSCI, S&P, and MCM, and any of their affiliates or third parties involved in compiling GICS shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

4Source: UMB Fund Services, Inc., FactSet and Marsico Capital Management, LLC (“MCM”). Data shown such as portfolio holdings, percentages, country, and sector weightings generally applied on the date shown above, and may have changed substantially since then. References to specific securities and sectors are not recommendations to buy or sell such securities or related investments.

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Past performance is no guarantee of future results. Recent performance may have been negative.

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