A lot of Australian investors will rightly be interested in investing in overseas share markets, as markets like the U.S. offer most of the world's best companies, while Asian markets for example offer exposure to one of the great investing trends of the future – the rise of the Asian middle class.
One exchange traded fund that offers exposure to both these thematics is the WCMQ Global Growth Fund (ASX: WCMQ) that invests in 20-40 stocks globally under the management of established California-based stock pickers WCM Investment Management.
The fund's responsible entity and backer in Australia is Switzer Asset Management which is a wholly owned subsidiary of Contango Asset Management that is run by Marty Switzer the son of popular business personality Peter Switzer.
The WCMQ Global Growth Fund has only been running since August 2018, but is already well ahead of its MSCI All Country World total return benchmark in returning 8.53% versus the benchmark's -0.58%.
As an asset manager WCM runs multiple different funds and defines it's guiding philosophy as: "WCM seeks quality growth businesses with superior growth prospects, high returns on invested capital, and low or no debt. Our team also requires each company to maintain a durable competitive advantage – what management terms an economic moat."
This sounds good to me and further: "WCM suggests to never bet against a growth company with a good corporate culture that has a competitive advantage that is growing. It is not enough to invest in a company that has a huge competitive advantage, investors also need to look for companies that have a competitive advantage that is growing. That is the differentiator – and a way to avoid the value trap."
Of course everyone would like to buy these kinds of companies as if they really do possess these qualities and trade on reasonable valuations then they're likely to comfortably outperform the benchmark.
Finding these kind of great growth companies is easier said than done though, but let's take a look at three great global companies it has in the WCMQ Global Growth Fund (ASX: WCMQ).
Shopify Inc. (NASDAQ: SHOP) – is the cloud-based e-commerce or "checkout" platform that lets any small-to-medium sized businesses sell its products online. It is growing like nuts (total March quarter revenue +50% to US$320m) thanks to the unsurprisingly huge demand for its platform and looks on a pathway to profitability. I love this stock as much as WCM and I am not surprised to see it as one of the portfolio's largest holdings given WCM's investment philosophy.
Visa Inc. (NASDAQ: V) will be familiar to all Australians and looks to still have a huge growth opportunity as the world moves cashless. Importantly, card payments are also growing in volume thanks to the rise of contactless payments for everyday goods like coffee or lunch. Visa also has a wide moat thanks to the scale, capital, and tech required to deliver these services.
Mercado Libre (NASDAQ: MELI) is an e-commerce retailer similar to Amazon that is focused on the fast-growing markets of Central and South America. Mercado Libre is also growing at strong rates and appears to have a moat or competitive advantage via its network effect (most sellers and buyers) and scale. It is another highly regarded tech and growth business that has a fast-rising valuation.
For me it looks like the fund offers investors exposure to some great global growth names and although its investment track record is not very long it is already 9% ahead of its benchmark.
Therefore the fund could be worth some more research, starting with reading the Product Disclosure Statement and potentially taking professional investment advice for any interested investors.
