Global Opportunities Fund (UCITS) - Commentary

3rd Quarter 2020

Brian McMahon
Brian McMahon
Vice Chairman and Chief Investment Strategist
Miguel Oleaga
Miguel Oleaga
Portfolio Manager and Managing Director
Portfolio managers are supported by the entire Thornburg investment team.
1 October 2020

This Thornburg Global Opportunities Fund commentary is published amidst the ongoing developments associated with the global spread of COVID-19. Government bodies around the world have taken unusual steps to control the spread of the disease and mitigate the consequences of related economic disruption in order to keep the basic structure of the global economy in place to resume normal economic activity when the pandemic passes.

Most equities in the Thornburg Global Opportunities Fund recovered strongly in the June and September quarters from their March 2020 price troughs, as the list on the following page will describe. Listed in descending order are the 20 largest holdings in the fund as of 30 September 2020, along with year-to-date returns as of 30 September 2020 and 31 March 2020 [the latter in parentheses]. We also show the trailing five-year average annual revenue growth rates for these businesses through year end 2019, or the latest reported fiscal year end. Together, these firms comprise approximately 80% of the fund’s total assets, near-cash debt comprises 3% of fund assets and 10 other equities comprise a total of approximately 17% of fund assets. Even with share price recoveries in the June and September quarters, six of these 20 largest equity investments have delivered negative returns in 2020 through 30 September. We believe observed operating results from these businesses could justify better future returns.

The fund’s health care and digital communications centric businesses have fared best in the first half of 2020, while financial firms have fared worst. Individual position sizes of the top 20 positions range from 5% or more (Reliance Industries, Alibaba, Vestas Wind Systems and Samsung) to just over 2.5% for those shown near the bottom of this list.

The reader will notice a high incidence of investments in firms tied to the digital economy, and to tools to facilitate digital communications.

These are not trivial businesses. They tend to be well capitalized. We believe most of these will emerge from the present economic valley with their competitive positions intact or improved. Most have been growing faster than the global economy in recent years as the trailing annual revenue growth rates indicate. Some of the slower growers over recent years appear to be advantaged in their industries at this time.

Table 1 | Global Opportunities Fund – Top 20 Equity Holdings (as of 30 Sep 2020)

(Together, these 20 investments account for approximately 80% of fund assets as of 30 Sep 2020; near cash interest bearing debt account for 3% of assets, approximately 10 other equity investments account for around 17% of fund assets)

Name of Company 2020 YTD Performance at 30 Sep 2020 and [at 31 March 2020] ($US) Trailing 5-Yr Annual Revenue Growth Rate 2014–2019
Vestas Wind Systems A/S +62.7%; [-19.6%] +11.9%
Manufactures, markets and services wind turbines for electricity generation, based in Denmark
Reliance Industries Ltd. +44.8%; [-30.5%] +9.7%
India-based conglomerate: chemicals, refining, #1 mobile telco and #1 retailer in India
Alibaba Group Holding Ltd. +38.6%; [-8.3%] +48.3%
China-based provider of internet infrastructure, e-commerce, and content services
Samsung Electronics Co., Ltd. +4.7%; [-18.1%] +2.2%
Manufactures consumer & industrial electronic products; leading semiconductor producer
Facebook, Inc. +27.6%; [-18.7%] +41.6%
Global social networking, communications, internet-based content, and advertising
Qorvo, Inc. +11.0%; [-30.6%] +21.9%
U.S.-based manufacturer of integrated circuits for wireless communications devices
GDS Holdings Ltd. +58.6%; [+12.4%] +54.5%
Leading developer and operator of data centers in China
NN Group NV +5.8%; [-28.9%] +7.7%
Netherlands-based life and casualty insurer
Alphabet, Inc. +9.4%; [-13.2%] +19.6%
Internet-based search & advertising, content, software applications, and data centers
Capital One Financial Corp. -29.3%; [-50.8%] (per share) +9.1%
U.S. commercial bank
Barratt Developments plc -38.0%; [-44.8%] +8.6%
UK’s largest homebuilder; net balance sheet cash
AbbVie, Inc. +2.9%; [-12.8%] +10.8%
Develops and sells pharmaceutical products
T-Mobile US, Inc. +46.1%; [+7.0%] +8.8%
U.S. mobile communications services provider
OCI NV -38.92%; [-41.4%] +2.5%
Producer & distributor of nitrogen fertilizers and industrial chemical
Citigroup, Inc. -44.5%; [-46.9%] (per share) +8.9%
Multi-national banking & financial services firm
Tesco plc -16.6%; [-16.2%] (divestments) flat
U.K.-based multi-national grocery retailer
L3Harris Technologies, Inc. -12.94%; [-9.0%] +20.7%
U.S. defense and technology company
The TJX Cos., Inc. -8.5%; [-21.4%] +7.5%
Leading off-price apparel & home fashion retailer with > 4,000 stores worldwide, TJ Maxx
Roche Holding AG +8.5%; [+3.2%] +5.3%
Global health care company selling medicines and diagnostic tools
The Charles Schwab Corp. -22.7%; [-29.0%] -1.9%
U.S.-centric wealth management platform, securities brokerage, and bank

Thornburg Global Opportunities Fund’s I share return of 11.62% for the September 2020 quarter exceeded its benchmark (MSCI All Country World Index), which returned 8.13% for the quarter. Performance comparisons of Thornburg Global Opportunities Fund to its benchmark over various periods are shown in the table above.

Top contributors to portfolio performance during the September quarter included Danish wind turbine manufacturer Vestas Wind Systems, India’s digital economy and downstream energy conglomerate Reliance Industries, Alibaba, Facebook, semiconductor components manufacturer Qorvo, Taiwan Semiconductor, Samsung Electronics, Australian mining services firm Mineral Resources and Dutch insurer NN Group. Thirteen equities contributed at least 0.25% to portfolio performance for the quarter, while only two equities (AbbVie and Citigroup) subtracted more than 0.25% from portfolio performance. We sold the remaining portfolio positions in Atlantia and easyJet to fund other opportunities. We added China Telecom to the portfolio in the September quarter. China Telecom is China’s second-largest mobile and fixed-line communications network operator and its largest data center operator. We made other position size adjustments for portfolio diversification purposes and to better balance the downside risk versus upside capital appreciation potential of individual positions.

The table on the following page summarizes major sector weightings within the Global Opportunities portfolio as of 30 September, as well as general directional changes over the course of the September quarter.

We believe the extreme dislocation caused by COVID-19 will be temporary. As we write these words, many countries, including parts of the United States, remain under restrictive orders that reduce normal economic activity. When the pandemic passes, we believe people around the world will continue to buy goods and services and trade with each other, though there will be certain differences from prior norms. The global economy will gradually repair. In the meantime, most governments will make reasonable attempts to bridge the material dislocations we currently witness.

Table 2 | Global Opportunities Fund—Major Sector Weightings and Directional Changes

Sector Weighting as of 30 Sep 2020 Quarterly Movement
Information Technology 17% higher weighting
Communication Services 17% higher weighting
Financials 14% stable weighting
Consumer Discretionary 14% higher weighting
Industrials 11% lower weighting
Health Care 8% lower weighting
Materials 7% stable weighting
Our Investment Framework

Thornburg Global Opportunities Fund seeks capital appreciation from a focused portfolio of global equity investments. We believe the structure of the fund—built on our core investment principles of flexibility, focus, and value—provides a durable framework for value-added investing.

We urge shareholders of the fund to maintain a long-term investment perspective rather than placing too much emphasis on return figures that are available daily, weekly, monthly and quarterly. Clear examples of the need to keep a longer-term investment perspective are illustrated by comparing the 2020 year-to-date returns of your fund’s top 20 holdings as of 31 March 2020, with the returns as of 30 September. Share prices of 14 of these top 20 holdings appreciated at least +10% during the last six months, only one saw a negative total return in $US terms over this period. We continue to follow our core investment principles of flexibility, focus and value, as we have since the fund’s inception.

Important Information

Source of data: Factset, BBH, Confluence, Bloomberg—unless otherwise stated

Date of data: 30 September 2020—unless otherwise stated

This does not constitute or contain an offer, solicitation, recommendation or investment advice with respect to the purchase of the Funds described herein or any security. The Fund’s shares may not be sold to citizens or residents of the United States or in any other state, country or jurisdiction where it would be unlawful to offer, solicit an offer for, or sell the shares. For information regarding the jurisdictions in which the Fund is registered or passported, please contact Thornburg at or +1.855.732.9301. Fund shares may be sold on a private placement basis depending on the jurisdiction. This should not be used or distributed in any jurisdiction, other than in those in which the Fund is authorized, where authorization for distribution is required. Thornburg is authorized by the Fund to facilitate the distribution of shares of the Fund in certain jurisdictions through dealers, referral agents, sub-distributors and other financial intermediaries. Any entity forwarding this, which is produced by Thornburg in the United States, to other parties takes full responsibility for ensuring compliance with applicable securities laws in connection with its distribution.

The Fund is a sub-fund of Thornburg Global Investment plc (“TGI”), an open-ended investment company with variable capital constituted as an umbrella fund with segregated liability between sub-funds, authorized and regulated by the Central Bank of Ireland (“CBI”) as an Undertaking for Collective Investments in Transferable Securities (“UCITS”). Authorization of TGI by the CBI is not an endorsement or guarantee by the CBI nor is the CBI responsible for the contents of any marketing material or the Fund’s prospectus, supplement or applicable Key Investor Information Document (“KIID”). Authorization by the CBI shall not constitute a warranty as to the performance of TGI and the CBI shall not be liable for the performance of TGI.

Before investing, investors should review the Fund’s full prospectus and supplement, together with the applicable KIID and the most recent annual and semi-annual reports. Copies of these documents may be obtained free of charge from State Street Fund Services (Ireland) Limited, by visiting or by contacting the local paying or representative agent or local distributor in the jurisdictions in which the Fund is authorized for distribution.

Investments carry risks, including possible loss of principal. Additional risks may be associated with investments 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 insured, nor are they bank deposits or guaranteed by a bank or any other entity.

No securities commission or regulatory authority has in any way passed upon the merits of an investment in the Fund or the accuracy or adequacy of this information or the material contained herein or otherwise. Neither this or the Offering Documents have been approved in any jurisdiction where the Fund has not been registered for public offer and sale. This information is not, and under no circumstances is to be construed as the Offering Documents, a public offering or an offering memorandum as defined under applicable securities legislation. Application for shares may only be made by way of the Fund’s most recent Offering Documents.

For Denmark: The Fund is only available to professional investors.

For Germany: The local information agent is GerFIS - German Fund Information Service UG (Haftungsbeschränkt), which may be contacted at Zum Eichhagen 4, 21382 Brietlingen, Germany.

For Hong Kong: This material has not been reviewed nor endorsed by any regulatory authority in Hong Kong, including the Securities and Futures Commission, nor has a copy been registered with the Registrar of Companies in Hong Kong. Hong Kong residents are advised to exercise caution in relation to this information. This is directed at and intended for “Professional Investors” within the meaning of Part1 of Schedule 1 to the Securities and Futures Ordinance.

This material is for the confidential use of the recipient only and should not be given, forwarded or shown to any other person (other than employees, agents or consultants in connection with the recipient’s consideration thereof).

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.

For Italy: The Fund is only available to professional investors.

For Norway: The Fund is only available to professional investors.

For Singapore: Recipients of this information in Singapore should note shares of the Fund may not be offered or sold, nor may this or any other information or material in connection with the offer or sale of such share be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A(1)(c) of the Securities and Futures Act (Cap. 289) of Singapore) (the SFA), (ii) to a relevant person as defined in Section 305 of the SFA or any person pursuant to an offer referred to in Section 305(2) of the SFA and in accordance with the conditions specified in Section 305 of the SFA, or (iii) pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

For Switzerland: The Fund is authorised by the Swiss Financial Supervisory Authority (FINMA) for distribution to qualified and non-qualified investors in Switzerland. The Swiss representative is Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204 Geneva, Switzerland, web: The Swiss paying agent is Banque Cantonale de Genève, 17, quai de l’Ile, 1204 Geneva, Switzerland. Investors in Switzerland can obtain the documents of the Company (each in their latest form as approved by FINMA, in German), such as the Prospectus, the KIIDs, the Memorandum and Articles of Association, the semi-annual and annual reports, and further information free of charge from the Swiss representative.

For United Kingdom: This communication is issued by Thornburg Investment Management Ltd. (“TIM Ltd.”) and approved by Robert Quinn Advisory LLP which is authorised and regulated by the UK Financial Conduct Authority (“FCA”). TIM Ltd. is an appointed representative of Robert Quinn Advisory LLP.

This material constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the “Act”) and the handbook of rules and guidance issued from time to time by the FCA (the "FCA Rules"). This material is for information purposes only and does not constitute an offer to subscribe for or purchase any financial instrument. Thornburg Investment Management Ltd. ("TIM Ltd.") neither provides investment advice to, nor receives and transmits orders from, persons to whom this material is communicated nor does it carry on any other activities with or for such persons that constitute "MiFID or equivalent third country business" for the purposes of the FCA Rules. All information provided is not warranted as to completeness or accuracy and is subject to change without notice.

This communication is exclusively intended for persons who are Professional Clients or Eligible Counterparties for the purposes of the FCA Rules and other persons should not act or rely on it. This communication is not intended for use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

Please see our glossaryglossary ( for a definition of terms.