Mark Baribeau, the manager of the AAA rated Jennison Global Equity Opportunities Fund, recently gave his views on the stellar returns of technology related stocks this year, and the outlook for 2021 and beyond. The Jennison Global Equity Opportunities Fund is a key holding in the Harmony USD Balanced Fund Strategy, available across multiple platforms.
Jennison, perhaps unsurprisingly, has had a super year with its tech heavy allocations. Netflix and Amazon being amongst the expected names at the top of the portfolio holdings. The fund returned over 100% in the three years to November 2020. The Jennison fund ranked 14th in the global equity fund Citywire’s ranking of almost 3000 funds. Nonetheless, the Jennison fund has to reposition itself going forward and fund manager Baribeau sees some structural changes as being central to continued growth.
One example is the Ecommerce space. The fund focuses on retailers that leverage the use of online marketplaces, such as LuluLemon (LULU), which has grown expansively without having any physical retail space. The fund also holds other Ecommerce participants with payment systems and online shopping at the center, not only Amazon (AMZN) but regional equivalents including Alibaba (BABA), MercadoLibre (MELI) and SE Group (SE) are in the top holdings. Both MercadoLibre and Alibaba have even launched their own payment systems, and moved vertically into logistics. The regional aspects of the fund come into sharper focus when addressing new trends in Ecommerce – especially in Southeast Asia where Alibaba is going to go head to head with SE and others through its subsidiary Lazada.
The fund is tech oriented. This is not the strategy of the fund but it’s the natural outcome of the fund’s focus on innovation, says Baribeau, as its previously held Apple (AAPL) and, even before that, early networking stocks and pre-internet technology innovators, such as Microsoft (MSFT). MSFT fell out of favor before returning to the list of holdings in the fund in the last year, as the fund’s management saw great value in the cloud computing divisions of MSFT, which have since become market leading.