6/5/2020 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 7.8% in May, leaving it up 9.5% year to date.The cash level as at 29th May was 23%, down from 24% at the end of April.

May saw lockdowns start to ease around the world. This relaxation has gone better than expected so far, with little evidence of a second wave of infections.Against this encouraging backdrop, we have continued to deploy cash into new investments, but this has been tilted more towards Covid-19 recovery plays.

For example, we bought a position in the Taiwanese bicycle company Giant Manufacturing.Governments have been asking citizens to avoid public transport as they go back to work, and in countries such as France offer generous incentives for new bicycle purchases and repairs.This has caused a jump in demand, with many stores selling out.As a leading global manufacturer Giant should benefit and the shares are up over 20% since purchase.We also initiated a position in Grupo Aeroportuario del Centro Norte (OMA), a leading Mexican airport concession holder.OMA has no debt, which is rare for an airport company, a long concession and is exposed to domestic rather than international travel.We believe it is very undervalued on a medium-term view after the share price fell over 40% from its highs relative to our purchase price.

Notable performers during the month were Cybozu, Giant and Bakkafrost.Kornit Digital rallied strongly after demand for its digital garment printers began to recover strongly after an initial freeze in spending.We took some profits in Kornit before the results which proved to be too early, as the shares subsequently made a new all-time high. We exited positions in LivePerson and Dermapharm after they had performed well, and we continued to take profits in Hellofresh.



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

Growth UK & Europe Fund

The UK & Europe Fund was up 4.6% in May, leaving it down 5.3% year to date.The cash level as at 29th May was 20%, down from 31% at the end of April.

Lockdown easings have gone well so far in Europe, with no large increases in infection rates and countries such as France easing restrictions earlier than expected.We have increased the exposure of the fund to some covid-19 recovery plays, as this is where we still see more value in the market.

For example, we bought a small position in Accell Group, a Dutch bicycle manufacturer as Europeans see biking to work as an increasingly attractive commuter option.We also started buying shares in Kinepolis Group, a Belgium cinema chain active across Europe.Kinepolis is attractive as we believe it will be relatively straightforward to enforce social distancing measures in cinemas (compared to restaurants for example), its bookings are 100% digital, and based on recent survey data this is a leisure activity that consumers have indicated they will return to. The shares remain over 40% below peak levels and despite high financial gearing the valuation is asset backed as it owns 85% of its real estate.

Notable performers during May were Avon Rubber and Invisio, as well as German online pharmacy supplier Shop Apotheke, which is now one of the fund’s largest holdings.Lagging was Datagroup, after the German IT services company published an indifferent set of results.We also took the fund’s sterling hedge back to 90% as our concerns over a Brexit trade deal have increased.




Written by Victoria Harris, Senior Investment Analyst and Portfolio Manager

Climate Friendly Fund

Global equity markets continued their strong rebound in May, with the S&P500 finishing up 4.5% for the month.This was driven by continued optimism around the US Federal government’s economic responses to the pandemic and a more positive (or ‘less bad’) US earnings season. The Climate Friendly Fund delivered a return of 6.7% for May.

The performance was led by Kornit Digital, LivePerson and Chegg. Despite COVID-19 impacts, all three companies rallied over 40% during the month, driven by strong earnings. Chegg is an online education company providing study help to college students. We re-initiated a position in April as Chegg was well positioned to benefit from COVID-19 as more students move to learning online. It reported earnings growth significantly above market expectations due to strong subscriber momentum in the US and internationally. Chegg’s momentum in international markets is key as it significantly expands the total addressable market, giving us further conviction in our investment thesis.

Disappointing positions were AMN Healthcare, 58.com and Grifols. AMN Healthcare is a nurse staffing company and more demand for nurses arising from COVID-19 has been offset more than expected, by pausing of surgical procedures.

Heading into June, we continue to look for new investment opportunities in companies with good revenue visibility and strong balance sheets operating in industries with secular tailwinds. The Fund has cash to deploy and is continuing to remain active when it comes to stock picking.


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.