Image source: Getty Images
Like many growth-oriented funds, it has been a very difficult 12 months for the Hyperion Global Growth Companies Fund (ASX: HYGG).
The fund comprises “a high-conviction portfolio of quality global listed equities from a research driven, bottom-up investment philosophy”. It looks for companies with predictable earnings, low debt, sustainable competitive advantages, organic growth options and experienced and proven management teams.
The September 2022 monthly update shows the fund is down 31.8% over the past 12 months. The biggest detractors from performance were some of the biggest and most popular global tech stocks.
Even for those of us who are somewhat numb to how far these fallen heroes are, when the numbers are laid out, you can see how brutal this market has been for a number of large-cap tech stocks.
Block (NYSE: SQ) – down 74%
Roku (NASDAQ: ROKU) – down 80%
Spotify (NYSE: SPOT) – down 57%
Meta Platforms (NASDAQ: META) – down 55%
How the mighty fell.
However, Hyperion is sticking to their guns, confident in what they believe will be a low growth inflationary environment, that such an environment is best for their investment style.
Hyperion said that while short-term performance is unpredictable, and acknowledges that this is a difficult time for investors, the fund believes it has allocated capital to businesses that will produce superior long-term results.
The top five holdings at the end of September were all US large-cap tech stocks, ie Tesla (NASDAQ: TSLA), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), Service Today (NYSE: NOW) and Airbnb (NASDAQ: ABNB). Combined, they make up more than half of the Hyperion Global Growth Companies Fund’s portfolio.
Hyperion added that its “global portfolio continues to produce strong short-term financial results consistent with assumptions that underpin our long-term valuations,” saying it believes its portfolio “should perform relatively well in an economic collapse”.
Hyperion Global Growth Companies Fund’s share price has fallen 31.7% over the past 12 months, in line with the fund’s underlying performance.