The International Growth Fund was up +7.6%, vs. the benchmark (S&P Global LargeMidCap Index, 50% hedged into NZD) which was up +5.1%. Companies that meaningfully influenced portfolio returns were:

Meta (+26%) reported strong results, with better-than-expected revenue and profit for the quarter. They also guided to higher-than-expected next quarter revenue growth of 25% (vs. ~20% expected). Meta’s investment in AI capabilities has helped the company deliver more efficient advertising to its advertising customers. 2023 was also Meta’s “year of efficiency”, and they have executed very well with operating income margins expanding from 25% in 2022 to 35% in 2023. Importantly, the company signalled that the focus on cost discipline and running leaner teams would continue into 2024 and beyond. Meta initiated its first dividend which sent a positive signal to investors that while Meta continues to invest for growth (i.e. the metaverse) it will be measured.

Icon (+23%), the leading clinical research organisation (“CRO”), was among our best performers, after a positive earnings result and management commentary on end-market demand gave the market confidence around medium-term growth prospects. The positive tone from management was a turnaround from a more cautious view in early January, which saw CRO stocks tumble nearly 10%. Icon’s new project pipeline continues to grow, driven by strong underlying R&D spend in its large pharmaceutical customer base; a slow but steady recovery in biotech demand; and new business wins driving market share gains.

UnitedHealth (UNH; -4%), the leading US healthcare services business, fell as the Wall Street Journal reported the Department of Justice has launched a “non-public antitrust” investigation into UNH. The investigation is focussed on the relationship between UNH’s insurance business and healthcare provider business (Optum Health). Details are still limited, and it is too early to predict what impact, if any, this will have on UNH. UNH say that patients typically see better outcomes and have higher customer satisfaction scores when it operates under this integrated model. We continue to follow this investigation closely.