The International Growth Fund returned +6.2% in May, compared to its benchmark of +5.3%. 

Global financial markets experienced a notable rebound in May, driven largely by the easing of trade tensions between the U.S. and China along with positive corporate earnings. Our large technology stocks outperformed (Microsoft, Meta, Amazon, Nvidia), benefiting from strong AI-driven earnings and improved market sentiment towards AI-related companies. Despite this, some of our healthcare names underperformed as they navigate choppy end markets and a changing political backdrop. 

Dexcom (+20%) had a strong month, driven by its better-than-expected first quarter earnings. Of note was its US sales which were well ahead of expectations. In April, Dexcom received FDA approval for its 15-day sensors, now the longest lasting sensor on the market. Since its executional misstep in July last year, it has been steadily executing and turning the business around. We have been progressively adding weight as we have regained confidence in management’s execution and in the business. Dexcom continues to have a long runway for growth as it addresses the large global diabetic population by providing tools for monitoring and managing diabetes. 

Microsoft (+17%) and Meta (+17%) both had good momentum through the month powered by good earnings results at the start of May. Both companies are at the forefront of monetising AI, Microsoft through Azure cloud computing and its software suite, Meta through improving advertising outcomes and increasing user engagement. Microsoft outperformed during the April tariff volatility as it is less tariff exposed, and while we reduced our weighting, it remains our second largest holding. We took the opportunity in April to increase our weighting in Meta during the tariff related volatility. 

UnitedHealth (-27%) shares dropped in May after they withdrew their 2025 guidance, the CEO unexpectedly resigned, and a Department of Justice fraud investigation into Medicare exerted additional downward pressure. Board Chairman Stephen Hemsley will take over as CEO, he was previously UnitedHealth’s CEO from 2006 to 2017. The Department of Justice investigation has been an active probe since last summer. Exact details are yet to be confirmed but is expected to be centred around its Medicare Advantage program. UnitedHealth have pushed back to the investigation in a statement stating it stands “by the integrity of our Medicare Advantage program”. We have been reducing our position size significantly over the last few months and are reviewing our investment thesis and whether the medium-term earnings power has degraded, or if these headwinds are temporary. 

Icon (-15%) was down in May on the back of weak earnings where the company downgraded its guidance. Weak end markets are persisting longer than anticipated, despite expectations for improvement this year. A combination of high interest rates, macroeconomic and tariff uncertainty; and questions over the Trump administration’s pharma regulation policies has seen ongoing hesitancy in clinical trial investment. This reduced investment has created uncertainty about when and at what scale recovery will occur. We had been reducing our position size prior to earnings due to these concerns and continue to assess the changing clinical investment backdrop.