The International Growth Fund was down -5.3% in April, vs the benchmark (S&P Global LargeMidCap Index, 50% hedged into NZD) which was down -2.3%. The US was one of the worst performing markets, down -4.1%. China was up +6.5% for the month, a reversal of recent relative performance. Earnings results during the month drove large price moves in several of our large-cap tech holdings.

Alphabet (+8%) was the strongest contributor to portfolio returns in April, driven by a strong earnings result which eased concerns that generative AI would disrupt Alphabet’s key search business and Alphabet would struggle to reinvent itself. Search revenue growth accelerated, its new AI product, Search Generative Experience, has also been having positive initial results.

Tencent (+14%) benefited from the improved sentiment in China. Tencent is starting to monetise over one-billion users of its Weixin app through highly profitable revenue streams like advertising and financial services. As sentiment improves, we are starting to see the quality and idiosyncratic growth of Tencent reflected in share performance, with Tencent outperforming its Chinese tech peers in April and year to date.

Meta (-11%) had a negative reaction to earnings as its revenue guidance fell short of elevated expectations; with management increasing their expected expenses and capex for the year as they invest in generative AI. Meta sees a lot of opportunity in AI and is already taking advantage of the technology to recommend content to users and to place more relevant ads.