For the month, the International Growth Fund was down -0.8% vs the benchmark (S&P Global LargeMidCap Index, 50% hedged into NZD) which was down -0.6%. Companies that meaningfully influenced returns were:

Floor and Decor (+15%) continues to take share in the US flooring market, despite a challenging housing environment and declining same-store-sales. One of Floor & Décor’s main competitors, LL Flooring, went into bankruptcy during the month given the challenging environment, demonstrating the strength of Floor & Décor’s position. Our medical device companies including Intuitive Surgical (+11%), Edwards Lifesciences (+11%) and Boston Scientific (+11%) outperformed for the month as underlying surgical volumes continue to grow in the US, helped by demographic factors, COVID backlogs and new medical device launches, albeit some legacy products such as Edward’s TAVR are facing capacity headwinds.

Dollar General (-31%) and Dollar Tree (-19%) both fell after Dollar General’s earnings report late in the month. The company not only reported further weakness in its core low-income consumer, but also that increased competition meant Dollar General was not able to gain share in the middle-to-higher income consumers that are trading down. Given elevated competitive concerns, we exited our small position in Dollar General.