MLN – August 2023 monthly update

1
A WORD FROM THE MANAGER
Marlin’s gross performance return for July was up 3.3%, while
the adjusted NAV return was up 2.8%. This compared with our
global benchmark, S&P Large Mid Cap/S&P Small Cap Index
(50% hedged to NZD), which was up 3.5%.
In July, global equities were up +3.4% driven by Emerging Market
equities up +6.3%. US and European equities were up +3.2%
and +1.8% respectively for the month. Growth underperformed
value in the month, with MSCI World Growth Index up +2.9%
compared to MSCI World Value Index up +3.9%.
Market hopes for an economic soft-landing and US headline
inflation numbers falling more than expected supported equities.
The US Federal Reserve raised rates 25bps and is no longer
forecasting a recession.
Portfolio News
Alibaba (+20%) and Tencent (+7%) rallied in July alongside the
broader China stock market (MSCI China Index +10% for the
month). There are signs in recent weeks that regulatory scrutiny
on China’s tech sector is easing, and China policymakers are
also looking to introduce stimulus to bolster the economy which
has been slow to recover post-COVID. Both considerations
drove improved market sentiment in the month.
Alphabet (+11%) reported earnings that beat market
expectations. The digital advertising market continues to
grow, with Google Search and YouTube well positioned to
capture market share given their ability to deliver high return on
investment for advertisers. Alphabet’s artificial intelligence (AI)
investments are also paying off. CEO Sundar Pichai noted that
Google’s AI-driven Search Generative Experience (SGE) is driving
incremental new queries that can be monetised with advertising.
Alphabet management also continue to focus on cost discipline,
which is very positive for the company’s earnings growth outlook
as revenues continue to trend upwards.
Meta (+11%) reported earnings in the month. Robust revenue,
engagement trends and outlook guidance beat expectations
and drove shares up 9% post-announcement. The company’s
investments in AI are paying off. AI recommendations drove a
7% increase in overall Facebook user engagement, and almost
all of Meta’s advertisers use at least one of its AI-driven ad
products. Reels continue to drive incremental engagement,
and monetisation has steadily increased over time. Along with
Reels, the next leg of Meta’s runway comes from its small but
rapidly growing Click-to-Message (via Messenger, Instagram or
WhatsApp) offering. Meta also continues to invest significantly
in the Metaverse, which currently has no clear return on
investment. We are monitoring this closely. That said, 80% of
Meta’s spending is on its core Family of Apps business which
generates highly attractive margins and free cash flow. Ongoing
cost discipline in its core business will further improve Family of
Apps’ margin and cash flow profile.
MSCI (+17%), a new portfolio addition as of June, reported
better than expected quarterly earnings in July. Revenues grew
13% year-on-year (YOY), the key Index business grew 13%
YOY and EPS grew 17% YOY. MSCI’s fastest growing segment,
ESG & Climate, came in better than expected growing at 29%
y/y. There were concerns surrounding a slowdown in ESG &
Climate growth in the previous quarterly result which were eased
this quarter with management reassuring investors of the long
growth runway the segment still has. MSCI has various avenues
of growth they are benefitting from and are executing well to
capture these opportunities.
Our medical device companies, Edwards Lifesciences (-13%)
and Boston Scientific (-4%), both underperformed for the
month as the anticipated recovery in surgical procedures was
slower than the market expected. Medical device stocks have
performed well year-to-date, given easing COVID restrictions
and improvements in hospital staffing levels. Although overall
surgical procedure volumes improved during recent months,
more complex procedures such as Edwards’ heart valve
replacements are taking longer to recover given a greater time
lag between referrals and treatment. Edwards expects growth
rates to accelerate towards year end as staffing levels continue
to improve and as these more complex cases move through the
system.
Icon (flat) reported results which show that signs of a recovery
in its biotech customer base have not yet translated into new
orders. The company noted it typically takes around three
months for underlying activity to translate into bookings growth
and is cautiously optimistic that new business wins will increase
in the second half of this year.
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using the net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
August 2023
$
0.97
Share Price
MLN NAVPREMIUM
1
$
0.96 1.9
%

as at 31 July 2023
Warrant Price
$
0.03

CONSUMER
DISCRETIONARY
2
KEY DETAILS
as at 31 July 2023
FUND TYPE
Listed Investment Company
INVESTS IN
Growing international companies
LISTING DATE
1 October 2007
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO
SIZE
20-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE
OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management Limited
MANAGEMENT FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every
1% of underperformance
relative to the change in the
NZ 90 Day Bank Bill Index
with a floor of 0.75%)
PERFORMANCE FEE
HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 5%
PERFORMANCE FEE
10% of returns in excess of
benchmark and high-water mark
HIGH WATER MARK
$1.08
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
207m
MARKET CAPITALISATION
$200m
GEARING
None (maximum permitted 20% of
gross asset value)
Portfolio Changes
During the month we reduced our position in Netflix and
increased our position in Gartner.
We exited homebuilder NVR (-1%) in July because we see
better value elsewhere. We bought NVR in May 2021. The
company has since delivered a 15% p.a. return vs. +4%
return from the S&P 500. NVR’s runway for new orders in the
company’s active development communities has shrunk in
recent years. NVR gross margins are at all-time highs given
SECTOR SPLIT
as at 31 July 2023
22
%
9
%
20
%

FINANCIALS
21
%
GEOGRAPHICAL SPLIT
as at 31 July 2023
7
%
WEST
EUROPE
77
%
NORTH
AMERICA
5
%

CASH &
DERIVATIVES
16
%
11
%

ASIA
5
%
CASH &
DERIVATIVES
Sam Dickie
Senior Portfolio Manager
Fisher Funds Management Limited
recent appreciation in house prices, and we see downside
risk to market consensus expectations for margins to remain
at elevated levels for the next 3 years. We put NVR back into
the fishing pond and will continue monitoring these dynamics
closely.
HEALTH CARE
INFORMATION
TECHNOLOGY
7
%

CONSUMER
STAPLES
COMMUNICATION
SERVICES

3
JULY’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
(in local currency) during the month
ALIBABA
+20
%
MSCI
+17
%
PAYPAL
+14
%
EDWARDS
LIFESCIENCES
+11
%
5 LARGEST PORTFOLIO POSITIONS as at 31 July 2023
AMAZON
8
%
ALPHABET
7
%
ICON
7
%
META PLATFORMS
6
%
GARTNER
6
%
The remaining portfolio is made up of another 16 stocks and cash.
PERFORMANCE to 31 July 2023
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+6.0%+14.3%(6.6%)+5.0%+11.7%
Adjusted NAV Return+2.8%+11.1%+8.5%+5.6%+8.6%
Portfolio Performance
Gross Performance Return +3.3%+12.0%+11.1%+8.3%+11.6%
Benchmark Index^+3.5%+8.3%+11.5%+11.9%+7.6%
^Benchmark index: S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD)
Non-GAAP Financial Information
Marlin uses non-GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for dividends (and other capital management initiatives) and after expenses, fees, and tax,
»adjusted NAV return – the percentage change in the adjusted NAV,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price performance, the net value of converting any warrants into shares, and the dividends paid to shareholders. It
assumes all dividends are reinvested in the company’s dividend reinvestment plan, and that shareholders exercise their warrants, (if they were in the money) at warrant expiry date.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non-GAAP measures. The calculations applied to non-GAAP
measures are described in the Marlin Non-GAAP Financial Information Policy. A copy of the policy is available at http://marlin.co.nz/about-marlin/marlin-policies/
META PLATFORMS
-13
%
TOTAL SHAREHOLDER RETURN to 31 July 2023
Share Price/Total Shareholder Return
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Share Price Total Shareholder Return
Nov
2007
Nov
2011
Nov
2013
Nov
2014
Nov
2015
Nov
2008
Nov
2009
Nov
2010
Nov
2016
Nov
2020
Nov
2012
Nov
2022
Nov
2017
Nov
2018
Nov
2019

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by necessity
brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy or completeness.
The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from a financial adviser should be
taken before making an investment. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio companies, please note that fund performance can
and will vary and that future results have no correlation with results historically achieved.
Marlin Global Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 484 0365
Email: enquire@marlin.co.nz | www.marlin.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777
Email: enquiry@computershare.co.nz | www.computershare.com/nz
ABOUT
MARLIN GLOBAL
Marlin is an investment company
listed on the New Zealand Stock
Exchange. The company gives
shareholders an opportunity to
invest in a diversified portfolio of
between 20 and 35 quality growing
international companies (excluding
New Zealand and Australia) through
a single, professionally managed
investment. The aim of Marlin
is to offer investors competitive
returns through capital growth and
dividends.
CAPITAL MANAGEMENT STRATEGIES
Regular Dividends
»Quarterly distribution policy introduced in August 2010
»Under this policy, 2% of average NAV is targeted to be
paid to shareholders quarterly
»Dividends paid by Marlin may include dividends received,
interest income, investment gains and/or return of capital
»Shareholders who prefer to have increased capital rather
than a regular income stream have the opportunity to
participate in the company’s dividend reinvestment plan
(DRP)
»Shares issued to DRP participants are at a 3% discount
to market price
»Marlin became a portfolio investment entity on 1 October
2007. As a result, dividends paid to New Zealand tax
resident shareholders have not been subject to further tax
Share Buyback Programme
»Marlin has a buyback programme in place allowing it (if it
elects to do so) to acquire its shares on market
»Shares bought back by the company are held as treasury
stock
»Shares held as treasury stock are available to be utilised
for the dividend reinvestment plan
Warrants
»Marlin announced an issue of warrants (MLNWF)
on 18 October 2022
»Information pertaining to the warrants was
mailed/emailed to all shareholders on 25 October
2022
»The warrants were issued at no cost to eligible
shareholders in the ratio of one warrant for every
four Marlin shares held based on the record date
of 2 November 2022
»The warrants were allotted to shareholders on
3 November 2022 and listed on the NZX Main
Board from 4 November 2022
»The Exercise Price of each warrant is $0.99,
adjusted down for the aggregate amount per
Share of any cash dividends declared on the
shares with a record date during the period
commencing on the date of allotment of the
warrants and ending on the last Business Day
before the final Exercise Price is announced by
Marlin
»The Exercise Date for the warrants is
10 November 2023

MANAGEMENT
The Manager has authority delegated to
it from the Board to invest according to
the Management Agreement and other
written policies. Marlin’s portfolio is
managed by Fisher Funds Management
Limited. Sam Dickie (Senior Portfolio
Manager), Chris Waters (Senior
Investment Analyst), and Lily Zhuang
and Daniel Moser (Investment Analysts)
have prime responsibility for managing
the Marlin portfolio. Together they
have significant combined experience
and are very capable of researching
and investing in the quality global
companies that Marlin targets. Fisher
Funds is based in Takapuna, Auckland.

BOARD
The Board of Marlin comprises
independent directors Andy
Coupe (Chair), Carol Campbell,
David McClatchy and Fiona
Oliver.