All-time highs no bother for those playing in small and mid cap space

Qiao Ma says the ongoing strength in company earnings – particularly in the US - surprised the Munro Partners team. In her own words, they spent part of 2023 “scratching our heads”.

"Usually when you start to see interest rates going from zero to five, you start to see subprime and consumer loans and interest rates and mortgages all trickle down to spending behaviour", says Ma.

"But what you ended up seeing is the economy being really resilient".
Whilst there are reasons for this – Ma points to 20-year fixed mortgages in the US and strong employment as factors – ultimately, markets kept rallying. Or, more specifically, the top end of the market kept rallying to fresh all-time highs.

That has left a wealth of opportunity in the small-and-mid-cap (SMID) space – where Ma is lead portfolio manager for the Munro Global Growth Small & Mid Cap Fund – to pursue.

Ma measures the levels of opportunity by how busy her diary is and how many companies she has to see. Normally, when markets hit all-time highs, there’s not a lot of value to be had and not a lot of opportunity to chase.

This time? Her diary is full.