The International Growth Fund fell -1.1% for the month, ahead of our global benchmark, which fell 2.4%. It was a busy month for portfolio earnings with 13 companies reporting.

Alphabet (+10.3%) was a strong performer as it continues to deliver strong advertising growth despite a weak economic backdrop. Group revenue grew 14% in the third quarter, driven by strong search advertising and YouTube growth, combined with 45% growth in its Cloud business. Its advertising business is benefiting from the continual shift of ad budgets from traditional media to digital – a trend that has accelerated in 2020.

Tencent and Alibaba  (+16%) and Alibaba (+3.7%) were top also top contributors. In addition to strong Chinese economic data, both companies were buoyed by the highly anticipated Ant Group IPO where investor demand has been extremely strong. Chinese retail investors alone have requested nearly $3 trillion of stock, well above the $37 billion being raised. While Alibaba is the obvious beneficiary via its 33% shareholding, this also shone the spotlight on Tencent’s underappreciated fintech business, which has around 40% share of the Chinese payments market.

Mastercard (-14.5%) was the biggest drag on performance in October after hitting all-time highs in recent months. Mastercard’s third quarter results showed that while ecommerce and contactless payments are benefitting parts of its business, weak cross-border travel activity is still materially impacting its business. Cross-border payment fees are likely to remain under pressure until there is a widely available vaccine and travellers are again feeling confident – which is unlikely to be until 2022. Despite these near-term headwinds, the long-term outlook for digital payment adoption has only been strengthened by the pandemic.

A resurgence of coronavirus cases in the US and Europe has increased the risk of further lockdowns and restrictions which hurt our discretionary retail names like TJX (-8.7%), Essilor (-8.6%) and Adidas (-7.6%).