Performance Review of the Mercer Overseas Shares Plus Portfolio – Quarter ending 30 September 2024

The Mercer Overseas Shares Plus Portfolio returned 1.6% in unhedged terms and 5.5% in hedged terms, performing in line with the benchmark.

During the quarter, the performance of the managers who handle the portfolio varied. Wellington performed well after experiencing a sharp bounce back in excess returns. On the other hand, Alliance Bernstein had the lowest performance among the managers. This was mainly due to their weak selection of stocks, particularly in the information technology (‘IT’) sector where their holdings in semiconductor companies did not perform well.

At the overall Fund level, the main factor that affected its performance adversely was having fewer investments and poor stock selection in the US. From a sector perspective, the selection of stocks in communication services had a positive impact, whereas the selection of stocks in the IT sector had a negative impact. At the stock level, having underweight positions in Nvidia and Apple helped improve relative performance, as well as having an overweight position in Meituan, a Chinese shopping platform, which benefited from Chinese policymakers announcing stimulus measures and reporting better-than-expected quarterly results. On the other side, having a higher investment in ASML had a negative impact. This company, which manufactures semiconductor equipment, was negatively impacted by lower demand for artificial intelligence stocks and reports that the US is looking to further restrict exports of lithography equipment into China.