Mercer International Shares Fund aims to exceed the benchmark, before management costs, over the medium to long term. The Fund provides exposure to international share markets utilising an actively managed, multi-manager approach. It invests predominantly in shares in developed markets but may also have an allocation to shares in emerging markets.
The broad MSCI World ex-Australia Accumulation Index returned 7.3% in hedged terms and 7.6% in unhedged terms over the quarter, as the Australian dollar weakened modestly against the US dollar and most major developed market currencies. Strongest performing sectors were Information Technology (15.4%) and Consumer Discretionary (11.4%), while Energy (flat) and Utilities (0.1%) underperformed on a relative basis. Other global share indices also produced positive results, such as the MSCI Small Caps Total Return Index (4.0%) and the MSCI Emerging Markets Accumulation Index (1.5%).
Over the June quarter, the S&P 500 Composite Index (8.7%), the Dow Jones Industrial Average (+4.0%) and the NASDAQ Composite Index (12.8%) were all well ahead in USD terms. European markets were mostly positive (in local currency terms), with CAC 40 (France, 3.5%) and DAX 30 (Germany, 3.3%) indices higher, while the FTSE 100 Index (UK, -0.3%) was down slightly. Equity returns were mixed across Asia. The SSE Composite (China, -2.2%), Hang Seng (Hong Kong, -6.0%) decreased, while the TOPIX (Japan, 14.4%) and S&P BSE 500 (India, 12.6%) increased, all in local currency terms.
What is Mercer International Shares Fund Mercer International Shares Fund is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Multi-Manager Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Mercer International Shares Fund has Assets Under Management of 393.70 M with a management fee of 0.98%, a performance fee of 0.00% and a buy/sell spread fee of 0.25%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Mercer International Shares Fund has returned -0.44% in the last month. The previous three years have returned 9.11% annualised and 11.3% each year since inception, which is when the Mercer International Shares Fund first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Mercer International Shares Fund first started, the Sharpe ratio is NA with an annualised volatility of 11.3%. The maximum drawdown of the investment product in the last 12 months is -3.63% and -42.5% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Mercer International Shares Fund has a 12-month excess return when compared to the Foreign Equity - Large Multi-Manager Index of 1.07% and 0.02% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Mercer International Shares Fund has produced Alpha over the Foreign Equity - Large Multi-Manager Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Foreign Equity - Large Multi-Manager Index category, you can click here for the Peer Investment Report.
What level of diversification will Mercer International Shares Fund provide? Mercer International Shares Fund has a correlation coefficient of 0.99 and a beta of 1.08 when compared to the Foreign Equity - Large Multi-Manager Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on Mercer International Shares Fund and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Mercer International Shares Fund with the Developed -World Index? For a full quantitative report on Mercer International Shares Fund compared to the Developed -World Index, you can click here.
Can I sort and compare the Mercer International Shares Fund to do my own analysis? To sort and compare the Mercer International Shares Fund financial metrics, please refer to the table above.
Has the Mercer International Shares Fund been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Performance Commentary - March 31, 2023 The broad MSCI World ex Australia Accumulation Index increased 7.1% in hedged terms and 9.2% in unhedged terms over the quarter, as the AUD weakened against most major developed market currencies. The strongest performing sectors were IT (22.7%) and Communication Services (19.6%), while Energy (-2.3%) and Healthcare (-0.4%) were the worst performers. Other global shares indices produced positive results as the MSCI Small Caps Total Return Index returned 5.7% and the MSCI Emerging Markets Accumulation Index returned 5.3% over the quarter.
Over the March quarter, the S&P 500 Composite Index (7.5%), the Dow Jones Industrial Average (0.9%) and the NASDAQ increased (16.8%), all in USD terms. European markets experienced positive returns, as the FTSE 100 (United Kingdom) (3.6%), the CAC 40 (France) (13.4%) and the DAX 30 (Germany) (12.2%) increased, all in local currency terms. Equity returns were mostly positive across Asia as the SSE Composite (China) (5.9%), Hang Seng (Hong Kong) (3.5%) and TOPIX (Japan) (7.2%) increased, while the S&P BSE 500 (India) (-5.9%) decreased, all in local currency terms.
Performance Commentary - December 31, 2022 December was a disappointing end to a bad year for markets. Investors had few places to hide as traditional safe haven assets such as bonds fell in tandem with equities. The final month of the year saw negative returns for equities, commodities and bonds as fears that have driven negative investor sentiment for most of 2022 returned: no end in sight for monetary tightening and uncertainty over the duration and severity of the economic slowdown that started in 2022.
Over December, Hedged Developed Markets Overseas Shares returned -5.2%, following two strong consecutive positive months. For 2022 as a whole, equities had their worst year since 2008. Global equities and the S&P 500 ended the year near bear market territory (defined as a decline of more than 20%), while the NASDAQ ended the year down by over 30% in USD terms. In December, negative market sentiment returned as investor focus pivoted from favourable inflation trends towards continued monetary tightening and the ongoing economic slowdown, which earnings estimates may not yet fully reflect.
Emerging markets declined to a lesser extent than Overseas and Australian shares, posting a -2.6% decline for the month of December. Weakness in India, Brazil, Taiwan and Korea were offset by strengthening Chinese share as investor sentiment improved amid the rapid reopening of its economy.
Hedged Overseas Government Bonds returned -2.2% over the month as bond yields rose across major regions as fixed income investors positioned for the continuation of monetary tightening following hawkish guidance from all major central banks over the month. Ten-year US yields rose by 13 basis points to end the month at almost 3.9%, while 30-year yields also rose by around 20 basis points to almost 4.0%. Yield movements were more substantial for Germany and the UK where 10 year yields increased by 50-60 basis points. Inflation expectations for the US, as measured by the 10-year inflation breakeven rate, fell from 2.37% to 2.30%.
Australian shares outperformed their Hedged Overseas counterparts in December. The ASX 50 was the top performing Australian index, despite declining -3.0%, meanwhile the ASX mid 50 was the worst performer, declining 4.6%. The best performing sector for the month was Materials (-1.1%) with the big miners BHP, Rio Tinto and Fortescue adding 1.1%, 7.1% and 7.1% respectively, they were also the top three positive contributors to the ASX 300. Meanwhile CBA and Transurban were the largest detractors, declining -4.9% and -8.9% respectively.
Performance Commentary - September 30, 2022 The broad MSCI World ex Australia Accumulation Index increased 0.3% in unhedged terms and decreased -5.2% in hedged terms over the quarter, as the AUD weakened against most major currencies over the period. The strongest performing sectors were Consumer Discretionary (7.3%) and Energy (5.5%), while Communication Services (- 7.0%) and Real Estate (-5.5%) were the worst performers. Other global shares indices produced mixed results as the MSCI Small Caps Total Return Index returned 1.3% and the MSCI Emerging Markets Accumulation Index returned -5.4% over the quarter.
Over the September quarter, the NASDAQ (- 4.1%), the S&P 500 Composite Index (-4.9%) and the Dow Jones Industrial Average decreased (-6.2%), all in USD terms. European markets experienced negative returns, as the FTSE 100 (United Kingdom) (-2.7%), the CAC 40 (France) (-2.5%) and the DAX 30 (Germany) (-5.2%) decreased, all in local currency terms. Equity returns were mixed across Asia as the S&P BSE 500 (India) (10.9%) increased, while the SSE Composite (China) (-11.0%), Hang Seng (Hong Kong) (-20.1%) and the TOPIX (Japan) (-0.8%) decreased, all in local currency terms.
Performance Commentary - June 30, 2022 The broad MSCI World ex Australia Accumulation Index decreased -8.4% in unhedged terms and decreased -15.1% in hedged terms over the quarter, as the AUD weakened against most major currencies over the period. The strongest performing sectors were Energy (3.6%) and Consumer Staples (2.3%), while Consumer Discretionary (-16.8%) and IT (-14.6%) were the worst performers. Other global shares were negative as the MSCI Small Caps Total Return Index returned -9.4% and the MSCI Emerging Markets Accumulation Index returned -3.3% over the quarter, all in AUD terms.
Over the June quarter, the NASDAQ (-22.4%), the S&P 500 Composite Index (-16.1%) and the Dow Jones Industrial Average decreased (- 10.8%), all in USD terms. European markets experienced negative returns, as the FTSE 100 (United Kingdom) (-3.7%), the CAC 40 (France) (-8.9%) and the DAX 30 (Germany) (-11.3%) decreased, all in local currency terms. Equity returns were mixed across Asia as the SSE Composite (China) (4.5%) and Hang Seng (Hong Kong) (0.9%) increased while the S&P BSE 500 (India) (-10.0%) and the TOPIX (Japan) (-3.7%) decreased, all in local currency terms.
Performance Commentary - March 31, 2022 The broad MSCI World ex Australia (NR) decreased -5.0% in hedged terms and decreased -8.4% in unhedged terms over the quarter, as the AUD appreciated against major currencies over the period. The strongest performing sectors were Energy (26.4%) and Utilities (-2.0%), while Consumer Discretionary (-13.5%) and Communication Services (-13.3%) were the worst performers. Other global shares were negative as the MSCI Small Caps (TR) Index returned -9.4% and the MSCI Emerging Markets (NR) Index returned -9.9% over the quarter, all in AUD terms. Over the March quarter, the NASDAQ decreased -9.1%, the S&P 500 Composite Index decreased -4.6% and the Dow Jones Industrial Average decreased -4.1%, all in USD terms. European markets experienced mixed returns, with the FTSE 100 (United Kingdom) increasing 2.9%, the CAC 40 (France) decreasing -6.7% and the DAX 30 (Germany) decreasing -9.3%, all in local currency terms.
The fund underperformed the benchmark over the quarter by 2.0%. Both asset allocation and stock selection detracted from performance. At an asset allocation level, an overweight exposure to financials contributed to performance, whilst overweight exposure to consumer discretionary and underweight exposure to energy detracted. An overweight holding in Intact Financial Corp contributed to performance, whilst overweight exposure to Meta and an underweight holding in Apple detracted.
Performance Commentary - June 30, 2021 The broad MSCI World ex Australia ( NR ) increased 7.6% in hedged terms and increased 9.3% in unhedged terms over quarter, as the AUD achieved negative returns against major currencies over the period. The MSCI Emerging Markets ( NR ) index both returned 6.6% over the quarter. all in AUD terms
Over the June quarter, the NASDAQ increased 9.5% the S7P 500 Composite index increased 8.5% and the DOW jones in#drustrial Average increased 5.1 % all-in USD terms. Most European markets experienced positive in return, with the FTSE 100 (UK) increasing 5.7%
Performance Commentary - December 31, 2020 The broad MSCI World ex Australia (NR) increased 11.7% in hedged terms and increased 5.7% in unhedged terms over the quarter, as the AUD appreciated against major currencies over the period. The strongest performing sectors were Energy and Financials, while Consumer Staples and Healthcare were the worst performers. Other global shares were also positive as the MSCI Small Caps (TR) Index increased 15.1% and the MSCI Emerging Markets (NR) Index returned 11.2%, all in AUD terms. Over the December quarter, the NASDAQ increased 15.4%, the S&P 500 Composite Index increased 12.1% and the Dow Jones Industrial Average increased 10.7%, all in USD terms.
Most European markets experienced positive returns, with the FTSE 100 United Kingdom (UK) increasing 10.9%, the CAC 40 (France) increasing 15.8% and the DAX 30 (Germany) increasing 7.5%, all in local currency terms. Equity returns were positive across Asia as the Indian BSE 500 increased 23.2%, the SSE Composite (China) increased 7.9%, the Japanese TOPIX increased 11.2% and the Hang Seng (Hong Kong) increased 16.2%, all in local currency terms.
The fund outperformed the benchmark over the quarter by 1.0%. Strong contributions from Baillie Gifford and Arrowstreet offset underperformance from the other managers. Asset selection had minimal contribution, whilst stock selection was the key contributor to excess returns. Overweight holdings in Pinduoduo Inc, Charles Schwab and an underweight holding in Apple were key contributors.
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