13.8.2020 Anette Tuomainen

Ecommerce to thrive even after corona

Focus’s portfolio companies announced their results and the stocks hit an all-time high

HCP Focus fund has made particularly high return during last quarter when ecommerce, remote work and other digitalisation trends of society have received an enormous external push during covid-19-lockdown.

The profit for the quarter is +47.9%, thus reversing the loss for the first quarter of the year, while the benchmark index MSCI ACWI IMI Total Return returned +17.8%. The year-to-date profit as of 30 June 2020 is +33.2%, having exceeded the benchmark index’s return of –7.0%.

Clearly, the societal migration to online retail is not only an acute but structural change in consumption, and we expect our holdings to benefit from ecommerce growth directly through our holdings in Amazon, Alibaba, Shopify, Etsy, Facebook (through Facebook Marketplace), MercadoLibre, and Shopify, and indirectely by merchant fees and payment processing through our position in PayPal. You can read the entire analysis from HCP Focus Investor Letter Q2/2020, and below is a short grasp of it.

Intuitive Surgical

Intuitive Surgical’s flag ship product da Vinci Surgical Systems enjoys trust amongst surgeons and the company is looking to alter the next version even more towards to customer feedback. Plans for international expansion are facing challenges due to the high price of the system.

Match Group

We elected to accept shares in the transaction to separate Match Group from its parent InterActiveCorp (IAC). This will provide benefits for shareholders such as the potential elimination of a trading discount and the possibility of new Match being included in major stock indices. The shift to paid subscriptions in software and content as well as normalisation of online dating are favourable for Tinder, and advertising in the app is expected to bring revenue growth in following years.

Amazon, Alibaba and Shopify

The shift to remote work will  benefit Amazon’s and Alibaba’s cloud computing business, Amazon Web Services and Aliyun. Shopify has launched its consumer-facing shopping app Shop putting in into more direct competition with Amazon, while making its revenue more directly exposed to fluctuations in consumer spending.

In HCP Focus Investor Letters we give updates on the fund’s performance, disclose details about specific investment decisions, and highlight noteworthy changes in the fund’s portfolio companies.

HCP Focus Investor Letter Q2/2020

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If you wish to invest in HCP Focus, the next subscription deadline is 30th of September 2020.

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Focus’s portfolio companies announced their results and the stocks hit an all-time high

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