Thornburg International Growth Fund

1st Quarter 2020

Greg Dunn
Greg Dunn
Portfolio Manager and Managing Director
Sean Koung Sun, CFA
Sean Koung Sun, CFA
Portfolio Manager and Managing Director
Portfolio managers are supported by the entire Thornburg investment team.
March 31, 2020
Market Review

Equity markets plunged in the back half of first quarter 2020, as the outbreak of a novel coronavirus spread beyond Asia to become a true global pandemic. Investors rushed towards the exits as some health care systems became inundated with patients, and economies across the globe shuttered in an effort to stem the spread of the virus. Governments and central banks have responded with massive amounts of monetary and fiscal stimulus to bridge the gap until economies can restart. This has provided investors some comfort, but in the meantime economic data looks awful and unemployment has surged, thus uncertainty remains elevated regarding the shape and pace of the recovery.

First-Quarter 2020 Performance Highlights
  • The Thornburg International Growth Fund returned negative 14.69% (I shares), outperforming its benchmark, the MSCI All Country World ex-U.S. Growth Index, which returned negative 18.25%.
  • From a sector perspective, top contributors to performance were communication services and consumer discretionary, where our overweight and strong stock selection drove outperformance. Our worst-performing sector was consumer staples, as we had several stock level detractors that underperformed the benchmark.
  • From a geographic standpoint, stock selection from holdings domiciled in North America, the eurozone and China were primary contributors to relative performance. Our worst-performing region relative to the index was the United Kingdom.
Current Positioning and Outlook

This past quarter represented an unprecedented period of market volatility as initial investor complacency quickly transformed into a swift and severe market correction. Given the circumstances, our portfolio held up rather well, and we believe that is a testament to our focus on high-quality businesses with secular growth dynamics that can transcend the current global economic disruption.

Many of the stocks we own are well positioned for where we believe the world is headed, as the events of this past quarter accelerated the adoption of some of our companies’ products and services. Examples include Alibaba with e-commerce, Adyen with digital payments, Netflix with online streaming video, Ubisoft with video games, Atlassian with collaboration software and TAL Education with online learning.

The world is in the early stages of containing the outbreak, and the economic fallout will largely depend on how long this fight drags on. We are encouraged by what appear to be flattening infection curves around the world. We worry that the economic damage inflicted may be more systemic then the market seems to be currently pricing in but we are also optimistic that humanity will eventually prevail in conquering this virus. As always, our goal is to thoughtfully construct a portfolio of idiosyncratic high-quality growth companies. As we’ve seen in the past, market dislocation can be a driver of disruption and innovation as well as providing great opportunities to invest in or add to excellent businesses at attractive valuations.

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than quoted. For performance current to the most recent month end, see the mutual funds performance page or call 877-215-1330. The maximum sales charge for the Fund’s A shares is 4.50%.

Important Information

Unless otherwise noted, the source of all data, charts, tables and graphs is Thornburg Investment Management, Inc., as of 3/31/20.

Investments carry risks, including possible loss of principal. Additional risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. Investments in the Fund are not FDIC insured, nor are they bank deposits or guaranteed by a bank or any other entity.

The views expressed are subject to change and do not necessarily reflect the views of Thornburg Investment Management, Inc. This information should not be relied upon as a recommendation or investment advice and is not intended to predict the performance of any investment or market.

Any securities, sectors, or countries mentioned are for illustration purposes only. Holdings are subject to change. Under no circumstances does the information contained within represent a recommendation to buy or sell any security.

The performance of any index is not indicative of the performance of any particular investment. Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index.

There is no guarantee that the Fund will meet its investment objectives.

Please see our glossaryglossary ( for a definition of terms.

Thornburg mutual funds are distributed by Thornburg Securities Corporation.

Thornburg Investment Management, Inc. mutual funds are sold through investment professionals including investment advisors, brokerage firms, bank trust departments, trust companies and certain other financial intermediaries. Thornburg Securities Corporation (TSC) does not act as broker of record for investors.