5/8/2020 12:00:00 AM

Fund Reviews: Global Growth

Written by Guy Thornewill,  Head of Research UK & Europe and Senior Investment Analyst

Global Fund

The Global Smaller Companies Fund was up 5.6% in April, leaving it up 1.6% for the year, and up 20% from its March lows.

The fund has weathered the covid-19 crisis well so far through a combination of high cash levels, market hedging and stock-picking.This continued in April as we deployed some cash into what we believe are excellent investment opportunities.We are still completely avoiding extremely stressed sectors such as energy and aviation, but as lockdowns start to ease we have been looking to buy companies we think will be survivors in tough sectors such as travel and leisure and industrial cyclicals.

One example is Norma, a German engineering company which provides connectors for automotive, industrial and water markets globally.The shares are down 70% and it has some debt, but it provides vital products for many industries and will no doubt gain market share during the crisis.Another recent purchase is Voltronic Power Technology, a Taiwanese manufacturer of electrical products that is high quality and where we have known the founder for many years.At the same time, we have been locking in some profits from early winners in the crisis such as Hellofresh.

Two notable performers during the month were FRP Advisory in the UK and NHN KCP in Korea.FRP was purchased in early March, provides bankruptcy services to UK companies and rose off the back of dramatically increasing demand for those services.NHN KCP provides online payment services and benefitted from the accelerating shift to online purchasing.We will continue to deploy cash on red days as opportunities present themselves. 



Written by Guy Thornewill,  Head of Research UK & Europe and Senior Investment Analyst

Growth UK & Europe Fund

The UK & Europe Fund was up 2.5% in April, leaving it down 9.5% for the year, and up 17% from its March lows.

The fund is outperforming the MSCI European Smaller Company index and most peers, helped by high cash levels and market hedging, but some of the more illiquid positions have hurt performance.For example, both Cambria (auto dealership) and Duke Royalty (royalty financing), which were performing well until the crisis hit, have seen sharp share price falls and have not recovered.We have exited Cambria – the lesson being that share price liquidity is an important factor in valuing listed businesses.

We continue to avoid extremely stressed sectors such as energy and aviation, but we are now considering badly affected sectors such as travel and leisure or industrials as the crisis moves to the next phase. Our focus remains clearly on companies which will be survivors, but there is attractive value in these areas despite the market rally.

During April we have purchased positions in new companies such as Revenio (optical equipment), Avon Rubber (respiratory protection systems for emergency services) and S&T (IT solutions and industrial automation products).Our core focus for ongoing cash deployment will remain on high-quality companies with structural tailwinds and healthy balance sheets.One such recent purchase which performed well in the month was Shop Apotheke, the German online pharmacy.While the business has been a beneficiary of the crisis due to extra demand, the long-term investment case - which involves a big move to online purchasing of prescriptions - remains very attractive.




Written by Victoria Harris, Senior Investment Analyst and Portfolio Manager

Climate Friendly Fund

In April, global markets rebounded very strongly. While Climate Friendly Fund didn’t rebound as much as we had hoped, the fund still finished the month up a pleasing +3.3%. This was due to three main reasons. Firstly, the strong NZD against the USD meant currency has been a headwind. Secondly, the market hedging and cash levels we have in place as a buffer against another market correction were a drag on performance.

In terms of portfolio companies, the performance in April were digital payments company, PayPal; digital printing solutions company, Kornit Digital; hygiene and sanitizing company, Ecolab; and Korean credit bureau company, Nice Information Service.

We added a position in online education and tutor services company, Chegg as we expect it to be a beneficiary from the COVID-19 pandemic as online education is more widely adopted by students. We also sold our position in Zoom because of increasing risks to the investment case, namely, increasing security breaches and increasing competition from other very large internet companies.

Despite still having a lot of cash in the Fund, we have been taking the opportunity to invest in companies we think will be able to grow earnings in this current environment and over the longer term.


Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser. Pie Funds is the issuer of the Pie Funds Management Scheme. For access to the PDSs, please click here.

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