The International Growth Fund gained 5.9% for the month, ahead of our global benchmark, which gained 5.2%.The MSCI All-Country World index was up 6% in August (the sharpest gain in August since 1988) and Wall Street’s S&P 500 index gained 7% for the month, wiping out the last of its pandemic losses and reaching an all-time high.

Facebook(+16%) was the top contributor to fund performance in August, benefiting from market enthusiasm for Facebook Shop and a proposed TikTok ban in the US.  Facebook Shop allows retailers to build a storefront, sell merchandise and receive payments directly on Facebook. On top of this Facebook has also extended its Instagram Checkout pilot from a select group of brands to all US businesses. The push into e-commerce will allow small businesses to reach new customers and provides another avenue for Facebook to monetise its social media properties. President Trump’s Executive Order to ban Chinese short video platform TikTok, as well as Facebook launching its own short video product (called Reels) also provided a boost to the stock. Reels has been built into Instagram and has seen good engagement from users since launch in August.

Hilton (+20%) played a little catch-up in August. The company reported earnings during the month, which showed a recovery in hotel occupancy is underway from very low levels. Management were positive on the sustainability of cost reductions they have taken and their ability to capture market share from independent operators as travellers look for brands they can trust.  Alibaba (+14%) had a strong month following the announcement of the upcoming listing of its Ant Group subsidiary which operates leading digital payments app Alipay. 

Signature Bank (-5%) fell with the broader banking sector. The KBW US Bank Index is down 31% year-to-date, compared to the S&P 500 which is up 8%. The reasons for the underperformance of banking stocks include Covid-19 related credit losses and a difficult operating environment due to the recent drop in interest rates. We expect Signature Bank can continue to grow despite the tough operating environment as the bank captures market share by hiring banking teams away from other banks and expands on the West Coast of the US.