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March 2020: WCM Global Growth (ASX: WQG) reported their end-of-Feb-2020 pre-tax NTA this morning as being $1.369. And that's with all of the falls we experienced in the last week of Feb priced in. WQG closed yesterday at $1.135, being a 17% NTA-discount. I hold WQG. They focus on sustainable competitive advantages with global (ex-ASX) companies, and they're particularly interested in positive company culture that reinforces and facilitates those competitive advantages. Some call these competitive advantages "moats". WCM Investment Management (who manage WQG for Contango here in Australia) are based in Laguna Beach, California (far from Wall Street) and their focus on "moats" is a little different, in that they are only interested in companies who have significant "moats" that are increasing, not staying the same or shrinking. They believe that the right company culture is key to sustaining a growing moat.

WCMIM is majority employee-owned and manages in excess of A$69 billion (as at 31 December 2019) of assets on behalf of institutional and retail investors around the world including Australia. Their ASX-listed LIC, WQG, has traded at a persistent NTA-discount, despite WCM's outstanding performance over multiple time-frames. They recently commenced paying dividends, which are unfranked because they make all of their money outside of Australia. Excellent manager, and a LIC that has performed very well, but is certainly under the radar of most investors here in Australia.

01-Sep-2020: Contango have done a reasonable job of raising the profile of this LIC somewhat, and the SP has risen +20% over the last 12 months, and +14.5% over the past 6 months (since March 1st). However, WQG is still trading at a 12.8% discount to last Friday's $1.525 before-tax NTA (on 28-Aug-2020) and that's using their closing share price on the same day. They closed today at $1.30, which is a 14.8% discount to last Friday's NTA. I'll admit that trading at NTA discounts is par for the course for globally-focussed LICs here in Australia at the minute, but this one is a particularly well managed fund, which has been doing very well. Their benchmark is the MSCI ACWI ex-AU (All-Country World Index ex-Australia), and they have outperformed that index over every conceivable time frame:

PERFORMANCE(*) (after management fees):

TIME PERIOD, WQG PORTFOLIO, MSCI ACWI (ex-AU), VALUE ADDED(***)

• 1 Month, 3.74%, 1.57%, 2.17%
• 3 Months, 11.48%, 3.60%, 7.88%
• 6 Months 10.17%, -5.99%, 16.16%
• 1 Year 20.20%, 4.09%, 16.11%
• 3 Year (PA) 22.62%, 7.90%, 14.72%
• Inception(**) (PA) 22.52%, 11.73%, 10.79%

Notes:

• 1. (*) Portfolio return is calculated before expenses and after Investment management and performance fees are paid. The company’s operating bank account balance is excluded from the portfolio value.
• 2. (**) Inception date is 21 June 2017.
• 3. (***) Value Add equals portfolio return minus benchmark return.

I hold WQG shares, and have done for a couple of years now. VERY happy with them. The fund is managed by WCM Investment Management who are based in Laguna Beach, California, and they have a unique approach, focussing strongly on expanding moats backed by well aligned company culture. They spend a lot of time examining the corporate culture of each company they look at to see that the culture is aligned with growing the company's competitive advantage(s) - i.e. their moat (as Warren Buffett refers to it). They have to have a good and aligned culture, AND they have to have a substantial and GROWING moat.

For more info:

1. https://wcminvest.com/
2. https://wcminvest.com/our-firm
3. https://wcminvest.com/quality-global-growth

I'll also try to create a straw with an uploaded slide presentation, but I don't know if it will work because it's a rather long Powerpoint presso.

At the end of July, the WQG portfolio's top ten positions were:

1. Shopify 5.56%
2. West Pharmaceuticals 5.13%
3. MercadoLibre 4.92%
4. Stryker Corp 3.78%
5. Taiwan Semiconductor 3.78%
6. Visa Inc 3.56%
7. Tencent Holdings 3.44%
8. lululemon athletica 2.92%
9. Thermo Fisher Scientific 2.73%
10. Crown Castle International 2.67%

Total 38.49%

21-Jan-2021: Update: WCM Global Growth LIC (ASX:WQG) had a pre-tax NTA on 15-Jan-2021 of $1.675 (their after tax NTA was $1.485.) Their share price closed that day at $1.695, so at a very small premium to their pre-tax NTA. I bought shares in WQG when they were trading at a 20%+ discount to NTA, and the investment thesis was that their persistent outperformance would drive the SP higher and the gap would close, and they could potentially trade at an NTA premium - because of their very high quality and performance. That has played out nicely.

The LIC sector has recovered a fair bit from 2019 and early 2020 when big NTA discounts in the share price were very common, however, on the whole, most GLOBALLY focused LICs are still trading at decent discounts. WQG is one of the few ASX-listed global LICs that HAVE moved to an NTA premium. I would consider selling if the NTA premium was over 20% but that's a fair way off from here, if it happens at all.

Meanwhile, the capital gains keep building and they are now paying dividends as well. WQG is a quality exposure to overseas shares, particularly as they focus on company cultures that provide and support growing competitive advantages (moats). That's the main difference with WCM - who manage WQG (out of Laguna Beach, California, USA). They have a very strong focus on GROWING moats and on company cultures that support and facilitate those growing moats. Much more focus on those two factors than any other funds management team that I've come across

Edit: The WQG share price (SP) has come back down to around $1.64, so there's probably a small discount in their SP once again, rather than the premium they were at on Friday last week (15-Jan-2021). That will depend on their portfolio value movement during the past 3 trading days, but it looks like they are still mostly trading at around NTA or slightly below, rather than at a premium, on most trading days. It seems last Friday was an exception.

More here: https://contango.com.au/funds/wqg/

TOP TEN PORTFOLIO HOLDINGS WCM GLOBAL GROWTH (%) as at 31-Dec-2020:

1. MercadoLibre 6.05%
2. Taiwan Semiconductor 4.30%
3. Shopify 4.13%
4. Stryker Corp. 3.88%
5. West Pharmaceuticals 3.64%
6. Visa Inc. 3.31%
7. LVMH (Moet Hennessy Louis Vuitton) 3.28%
8. Amphenol Corp. 3.15%
9. Tencent Holdings 3.09%
10. First Republic Bank 2.94%

Total 37.77%, i.e. those top 10 positions add up to 37.77% of the WQG portfolio (or did on 31-Dec-2020).

Update: Saturday 24th July 2021: "WCM Global Growth Limited (ASX:WQG) advises that the estimated unaudited Net Tangible Asset backing (NTA) per share of the company as at 16 July 2021 was $1.83/share before tax, $1.60/share after tax," and the SP closed that day at $1.59/share.

$1.83 is therefore my new valuation for WQG, which I hold. On Monday 12th July, Marty Switzer (one of their directors) wrote:

"The Company is delighted to announce that the WCM Global Growth Limited (WQG) investment portfolio has delivered a return of 26.8% for the year ended 30 June 2021. This return was achieved notwithstanding a pronounced market rotation away from growth towards value and low-quality factors during the March 2021 quarter."

"The portfolio has maintained its two year, three year and since inception outperformance for the year ended 30 June 2021."

"Since inception in June 2017, the portfolio has achieved a compound return of 20.9% per annum compared with the benchmark MSCI All-Country World ex-Australia Index return of 14.3% over the same period."

"WQG’s portfolio is managed by WCM Investment Management (WCM), a California-based investment management firm specialising in active global and emerging market equities. WCM's investment process is based on the belief that corporate culture is the biggest influence on a company's ability to grow its competitive advantage or 'moat'."

At 30-June-2021, their top 10 portfolio positions were:

1. Stryker Corp. (4.88%)
2. Shopify (4.88%)
3. West Pharmaceutical Services (4.17%)
4. LVMH (Moet Hennessy Louis Vuitton) (3.81%)
5. Sherwin-Williams (3.80%)
6. MercadoLibre (3.63%)
7. Thermo Fisher Scientific (3.45%)
8. First Republic Bank (3.33%)
9. Taiwan Semiconductor (3.31%)
10. Visa Inc. (3.25%)

Total: 38.51% (i.e. their top 10 positions represented 38.51% of their portfolio).

Their Sector weightings were:

• Information Technology 26.95%
• Health Care 19.38%
• Consumer Discretionary 17.84%
• Financials 10.24%
• Industrials 9.65%
• Consumer Staples 6.07%
• Materials 3.80%
• Cash 3.15%
• Communication Services 2.92%

Total: 100.00% Disclosure: I hold WQG shares in RL and they are also in my Strawman.com virtual portfolio.

12-April-2024: Update: I haven't updated this one for almost 3 years.

At 31-March-2024, their top 10 portfolio positions were:

1. Novo Nordisk 4.93%
2. General Electric 4.90%
3. Arista Networks 4.20%
4. Amazon 4.07%
5. Microsoft Corp 3.94%
6. Nvidia Corp 3.47%
7. Canadian Pacific Kansas City 3.43%
8. Entegris 3.41%
9. Intuitive Surgical 3.38%
10. 3I Group 3.25%

Total 38.98%

Seeing as we now have the technology (due to site upgrades here involving additional options for including images and links in straws and forum posts), I'll let them tell the story:

Source: WCMGG-(WQG)-Investment-Update-and-NTA-Statement-31-March-2024.PDF

I'll update my "valuation" now to reflect their 31-March-2024 NTA After Tax and Before Tax on Unrealised Gains, which was A$1.743, as shown below:

Disclosure: I am not holding this or any other LICs or LITs in real life at this point (in real money portfolios), however I do have a small WCM GG (WQG.asx) position in my Strawman portfolio/scorecard here, which I recently added for a momentum trade, as the NTA-discount in their share price narrows. Their SP today (at the close) is $1.48, and it was $1.51 at the end of March, and $1.32 at the end of December. There is still a discount, but the gap between the SP and their NTA is narrowing now. And their NTA has been rising at a good clip as well due to the continued outperformance of their portfolio over their benchmark index (the MSCI All Country World Index ex-Australia).

Website: https://www.associateglobal.com/funds/wqg/

WCM Global Growth Limited (ASX:WQG) - Associate Global Partners