Tycoon Global Growth Equity Fund

Tycoon Global Growth Fund – Quarterly Report Q3-2023

Quarterly Performance Summary

Starting September 2023, the Tycoon Global Growth Equity Fund has shifted to quarterly reporting, providing updates on the fund and market conditions each quarter. In this quarter, data from the Australian Bureau of Statistics reveals a 0.6% month-over-month increase in the Consumer Price Index (CPI) for August, up from July’s 0.3%. The main contributor to this rise was a 9.1% month-over-month surge in gasoline prices, leading to a significant 13.9% year-over-year increase in the CPI. Given the growing inflationary pressures, the Reserve Bank of Australia may consider further monetary policy tightening to ensure inflation returns to the target range within an acceptable timeframe. Nevertheless, the Reserve Bank of Australia maintains its earlier economic forecast that inflation will gradually ease and re-enter the 2-3% target range by the end of 2025.

In the global market, the United States is also grappling with rising inflation and maintaining a low unemployment rate, leading to a likelihood of interest rate hikes by the Federal Reserve. The main concern here isn’t inflation but the low unemployment rate, which makes the Fed optimistic about achieving a soft landing by gradually adjusting interest rates to bring inflation back to target levels without letting unemployment exceed 4.1%.

As a result, U.S. Treasury yields continued to rise, and the strong U.S. dollar further dampened market confidence. This led to an 8.4% loss in returns for the Tycoon Global Growth Equity Fund in Q3 2023. However, over the past year, the fund has generated an impressive 21.9% return for investors, significantly outperforming the S&P/ASX 300 Index’s 8.4% return.

Figures as of 29 September 2023

Investment Philosophy

Tycoon Global Growth Equity Fund’s core focus is identifying promising enterprises poised for future growth, aiming to deliver sustained outperformance for investors. It employs a moderately diversified strategy, investing in developed markets and strategically targeting green energy, technology, and AI sectors to ensure stability and growth potential.

Global Economic Trends

The current market focuses on higher and more prolonged interest rates. The Federal Reserve’s meeting minutes suggest that a stronger-than-anticipated economy supports continued quantitative tightening. Consequently, market expectations for a change in Fed policy have been pushed back to July 2024, delaying the potential for rate cuts. Additionally, while the Federal Open Market Committee (FOMC) maintained the federal funds rate target between 5.25% and 5.50% in September, rising inflation and a hot job market may lead to another rate hike before year-end.

Despite the expectation of continued monetary tightening, Federal Reserve Chairman J. Powell also delivered positive signals during the meeting. He pointed out that the U.S. GDP growth has exceeded expectations, signalling economic improvement and the potential for a soft landing. Additionally, Fed officials predict that rates will remain at 4.25% in 2024, implying the possibility of two rate cuts next year and the onset of a new economic cycle in the market.

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