7/6/2020 12:00:00 AM

Fund Reviews: Global Growth

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

Global Growth Fund  (Previously Global Small Companies) 

The Global Growth Fund was up 1.3% in June.

With markets entering a consolidation phase we have been focusing on taking profits in some recent winners such as HelloFresh, and trying to find good companies still trading at reasonable multiples. Undoubtedly this has become harder given the sharp rally from the March lows, and consequently portfolio turnover has decreased. We remain alert for rises in the virus infection rate, but we think another round of national lockdowns is unlikely – it is simply too damaging to economies and their citizens.

During June we initiated a new position in Musti Group, a Finnish pet-care retailer which listed in February this year. As readers may have experienced themselves, there has been a notable increase in consumers getting pets during lockdowns, and this is leading to strong sales for the company of both food and accessories. As well as physical stores, Musti has a strong online presence across Scandinavia, so it was able to manage the lockdown period successfully. Opportunities for new store openings and customer acquisition online still look strong, and the pet theme is one that has much further to run in our view. We also acquired some shares in Kinepolis, the Belgium cinema company, which should do well as it begins to open its screens again across Europe.

Notable performers during the month were Flatex, HelloFresh, Cybozu, Boku and Voltronic. Boku announced the acquisition of one of its peers called Fortumo, and we participated in the associated capital increase as demand for its payment services continues to grow. The only disappointing performer during June was Cancom, the German IT services company, which warned of a slower second quarter. The lockdown related demand spike in hardware sales has eased, and it also had higher costs for servicing some customers. However, we believe this is a short-term blip, and the market is now undervaluing its fast-growing cloud solutions business. 




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

Growth UK & Europe Fund

The UK & Europe Fund was up 3.2% in June. Lockdown easings continue to go well in Europe, despite some isolated local outbreaks, and the fear factor has left the markets for the time being. The investment landscape is not back to normal yet, and as markets consolidate at current levels we remain focused on seeking out share prices still offering value. We also remain wary of the stalled Brexit trade negotiations and continue to reduce the fund’s UK exposure, selling out of AFH Financial and iomart during the month. Neither company has a specific problem or indeed exposure to trade negotiations, but growth rates have become lacklustre and we are finding better ideas in Continental Europe.

One of these is Swedencare, the pet-care company been owned in the fund since the end of 2019, and which we had built up to be one of the fund’s largest holdings at over 5%. At the end of June, the company announced a highly earnings accretive acquisition of a US pet pharmaceutical company. The deal gives Swedencare access to over 10,000 vets in the US, and will enable it to sell its highly successful PlaqueOff dental health product into this new channel. The shares rose 30% on the deal announcement making it the fund’s best performer over the month.

Other notable performers during June were Flatex and Boku, with no meaningful laggards. We believe shares in European markets as a whole remain under-valued, especially relative to the US.




Written by Victoria Harris, Senior Investment Analyst and Portfolio Manager

Global Growth 2 Fund (formerly Climate Friendly)

The Global Growth 2 Fund was up 0.1% in June. During the month, global equity markets continued their post-Covid-19 rebound, but with a bit more volatility. The first half of the month was characterised by continued improving economic data and lockdowns easing across many countries, leading to a strong market rotation from growth assets to value/cyclical assets. Towards the end of the month, we witnessed a resurgence (or continued rise) of Covid-19 case numbers in certain regions.

This led to renewed investor interest in companies that are ‘shelter-in-place’ beneficiaries. Hence, the Fund’s performance was led by; HelloFresh, a European meal-kit delivery company, Shop Apotheke, a European online pharmacy and PayPal, Amazon and Microsoft, all mega-cap technology companies benefitting from ecommerce, digital payments and cloud trends. Shop Apotheke was a new investment in the fund during June. While the company is currently benefiting from increased demand from Covid-19, we believe the structural shift to online prescriptions, provides a very long-term attractive investment case.

Disappointing positions were Cooper Companies, a contact lens manufacturer, Cancom, a German IT services company, and Softcat, a UK IT reseller. Cooper Companies reported its quarterly result which saw demand for contact lenses impacted by working-from-home and temporary optometrist stores closures globally. These trends should be short-lived and continue to improve as countries ease lockdown restrictions. Longer-term, this company will continue to benefit from some favourable demographic trends.

We continue to invest for the long-term and take positions in investment where the opportunities are attractive. 


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.