Macrovue’s Social Media thematic portfolio is our best performer over the last 12 months returning 68.26%. To put that return in context, the ASX 200 has gained 13%, the S&P 500 (in AUD) is up 18.5 % and the MSCI All World Index (in AUD) has generated an 18.1% return, as of June 22nd 2017. Our Social Media Vue demonstrates the effectiveness of identifying a pervasive theme and constructing a portfolio of the stocks that best exemplify that theme. Since inception (June 2014) it has returned 28.7% per annum.
What companies are driving this outperformance? See below.
CHART 1: Companies and Performance
At Macrovue we focus on creating diversified portfolios of what we consider to be the best companies based on quantitative and qualitative assessments. We try to be diversified by geography and market capitalisation if possible.
For example, in the Social Media Vue, China is well represented with holdings in Weibo, NetEase, ChangYou, Tencent and YY. From the U.S. we have Facebook, Twitter and Google. XING is from Germany and Mail.ru is the dominant Russian social network.
Our companies are involved in diverse facets of social media - online gaming, messaging, money transfer, social networking, video & photo sharing, and mobile gaming.
What’s driving the share prices? Growth, pure and simple. For example, in Q1 2017, Weibo reported Year on year (YoY) revenue growth of +67% and earnings increased +560%: Facebook grew revenues +50% and earnings +73%, and Tencent reported revenues up +55% and earnings +58%. These results as well as future guidance were well ahead of market expectations. That’s what drives stock prices. These three companies are estimated to grow earnings in excess of +40% in 2017. You get the picture!
To learn more about the companies in the Social Media Vue and read the research driving the stock picks, visit the Social Media Vue page.
We believe it is still early days for this theme. Social Media penetration remains low globally (at 36%) and will remain a growth area for the foreseeable future.
CHART 2: Global Digital Snapshot
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances. Past performance is not a reliable indicator of future performance.