The global sector company, Manchester and London (MNL), delivered a total NAV return of 12.8% over the full-year to 31 July 2020, which was over 30% ahead of its benchmark, the MSCI UK investable market index.
Attribution – Microsoft, Alphabet, Facebook, Tencent, and Amazon all figure in the portfolio
- Information technology: +7.2%
- Communication services: +5.0%
- Consumer discretionary: +7.6%
- Other investments (including funds, ETFs and beta hedges): +2.5%
- Foreign exchange, cost & carry: (9.6%)
- Total NAV per Share return: +12.8%
“Microsoft Corporation accounted for over half of this sector’s return. Other material positive performers included Adobe Inc, Salesforce.com Inc, Nvidia Corp, Mastercard Inc and Visa Inc. Paypal Holdings Inc was the only material negative contributor (due to the timing of the disposal). The portfolio’s weighting to this sector at the year-end was 38.1% of the net assets (2019: 49.6%).
The communication services sector delivered roughly 39.3% of the NAV total return per share. Material positive contributors included Alphabet Inc, Facebook Inc and Tencent Holdings Ltd. The Walt Disney Co was the only material negative contributor (we sold this in March due to perceived greater COVID-19 risks). The portfolio’s weighting to this sector at year-end was 33.4% of the net assets (2019: 37.0%).
The consumer discretionary sector delivered 59.4% of the NAV total return per share. The material positive contributors in this sector were Alibaba Group Holding Ltd and Amazon.com Inc. The only material negative contributor was Expedia Group Inc. The portfolio’s weighting to this sector at year-end was 29.8% of the net assets (2019: 33.1%).
Other holdings delivered 19.6% of the NAV total return per Share. We employed various sector and thematic index hedges during the year in an attempt to combat market volatility. Most of these market hedges were removed (at a profit) during the Q1 market fall. Of the long fund and ETF holdings in this segment, the material positive contributors were the Morgan Stanley US SAAS Basket and Polar Capital Technology Trust Plc. The portfolio’s weighting to this sector at year-end was 5.9% of the net assets (2019: -8.2%).”
Net of the market value of options, MNL’s top holdings (% of the portfolio) at the year-end were:
MNL: Excellent year for tech-focused Manchester & London