MLN – July 2019 monthly update

1
Monthly Update
July 2019
MLN NAV
$
0.96
SHARE PRICE
$
0.90
DISCOUNT
1
6.1
%
as at 30 June 2019
A word from the Manager
Market Overview
After a difficult month in May due to escalating trade
tensions, the US share market lead global equity markets
higher in June, supported by the Federal Reserve signalling a
willingness to cut interest rates if the economic environment
deteriorates further. An agreement between US President
Donald Trump and Chinese President Xi Jinping to get the
troubled trade talks back on track also soothed markets late
in June. While there is still considerable uncertainty as to
whether they can settle their differences, financial markets
seem to be taking them at their word for the time being.
The US S&P 500 had its best June since 1955, gaining 6.9%,
topping off a 17% gain for the first six months of the year.
Marlin Global’s gross performance in June was +4.5%,
broadly in line with our global benchmark, which rose 4.2%.
The Adjusted NAV for June was +3.8%.
Portfolio Company Developments
We travelled to the US again in June to meet management
of a number of our portfolio companies, including Dollar
General and TJX. Dollar General is a discount retailer
that continues to expand its footprint throughout the US.
The highlight from the trip was hearing more about the
company’s plans to leverage its 15,000 strong store network
to offer services like FedEx parcel drop and Western Union
money transfers for customers. This provides a valuable
service for customers and increased foot traffic, sales and
high margin service revenue for Dollar General.
We also had the chance to visit off-price retailer TJX
Companies and walk around one of their TJ Maxx stores
with management. TJX Maxx sells branded apparel and
other merchandise at a significant discount to normal retail
prices by sourcing overstocked merchandise from struggling
retailers. Discounts of up to 50% draw in customers looking
for Hugo Boss polo shirts, Samsonite suitcases, or Jo Malone
cologne at a big markdown. Because of the difficulties many
other retailers are having, TJX have been able to source
a broad selection of inventory and the year has started
strongly. Same-store sales are growing at 5% and TJX
continues to roll out new stores in the US and Europe.
A negative development in June was the increase in
regulatory scrutiny of big technology companies including
our portfolio companies Alphabet and Facebook. While no
antitrust investigations have begun, it appears that the US
Department of Justice and Federal Trade Commission are
currently laying the groundwork. While this is not new news
and most investors had anticipated that regulators would
eventually investigate these businesses, it is an overhang
weighing on their share prices. Alphabet, who is likely to be
most at risk given its dominance in online search (Google),
mobile operating systems (Android) and browsers (Chrome)
saw its share price fall 2% in June, against a market that was
up strongly. Antitrust cases are not quick (Microsoft’s case
took 7 years) and the case against Alphabet is complicated
given it is hard to claim its market position hurts consumers
when most of their products are free. These companies
have faced similar investigations in Europe, with the impact
being relatively minor to date. We continue to follow the
developments closely, but for now remain comfortable with
our investments in both Alphabet and Facebook.
Portfolio Changes
We made two changes to the portfolio in June, exiting both
Cerner and Core Laboratories (Core Labs).
Cerner is the world’s largest provider of software for
hospitals. The central issue for Cerner in recent years has
been a reduction in organic growth in its core Electronic
Health Records (EHR) business, which follows years of
regulatory support for EHR adoption that is now starting
to wane. The slowdown in growth also led to extra costs
creeping in to the business as Cerner invested in sales &
marketing and new product development to try to keep the
growth story alive. Overall we are not convinced growth will
be as easy to come by as it was in previous years and we
have decided to sell our holding.
We first invested in Core Labs following the sharp decline
in oil prices and energy stocks in 2016. Our view was that
the long-term growth in the business was linked more to
production volumes than the oil price itself. Oil demand
was (and still is) expected to increase for the foreseeable
1
Share Price Discount to NAV (using NAV to four decimal places)

2
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Limited
future, requiring increased investment particularly in more
challenging areas like offshore and deepwater, in turn driving
demand for services and technology from companies like
Core Labs. However, this has not played out as we expected.
Firstly, significant productivity gains in US shale wells, (helped
in small-part by Core Lab’s technologies) has meant that
more oil can be produced from fewer wells, decreasing the
amount of Core Labs products needed per barrel of oil.
Secondly, because of these gains US shale oil has been able
to meet the bulk of the incremental global oil demand and
customers have pushed out any meaningful investment in
deepwater exploration. We do not have clarity as to when
these headwinds will ease and given these uncertainties we
have decided to exit the stock.
Sector Split
as at 30 June 2019
Key Details
as at 30 June 2019
FUND TYPE
Listed Investment Company
INVESTS IN
Growing international companies
LISTING DATE
1 November 2007
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
25-35 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
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.89
SHARES ON ISSUE
147m
MARKET CAPITALISATION
$132m
GEARING
None (maximum permitted 20%
of gross asset value)
26
%
CONSUMER
DISCRETIONARY
9
%
FINANCIALS
18
%
INFORMATION
TECHNOLOGY
19
%
COMMUNICATION
SERVICES
Geographical Split
as at 30 June 2019
16
%
WEST EUROPE
71
%
NORTH AMERICA
8
%
INDUSTRIALS
10
%

ASIA
The Marlin portfolio also holds cash.
18
%

HEALTHCARE
The funds from these sales were used to top up our
holdings in existing portfolio companies, including Abbott
Laboratories, Dollar General and Alibaba.

June’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
ALIBABA GROUP
+14
%
ZOETIS INC
+12
%
ESSILORLUXOTTICA
+11
%
UNITED PARCEL
SERVICE
+11
%
5 Largest Portfolio Positions as at 30 June 2019
ALPHABET
9
%
FACEBOOK
6
%
ALIBABA GROUP
6
%
PAYPAL
5
%
MASTERCARD
5
%
The remaining portfolio is made up of another 20 stocks and cash.
Nov
2007
Nov
2008
Nov
2009
Nov
2010
Nov
2011
Nov
2012
Nov
2014
Nov
2013
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
Nov
2015
$
1.00
$
0.50
$
0.00
$
1.50
Nov
2016
Nov
2017
$
2.50
$
2.00
Nov
2018
Total Shareholder Return to 30 June 2019
Performance to 30 June 2019
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+5.9%+12.0%+15.5%+15.3%+11.8%
Adjusted NAV Return+3.8%+4.5%+6.8%+15.4%+10.6%
Portfolio Performance
Gross Performance Return +4.5%+5.2%+10.1%+19.5%+14.5%
Benchmark Index^+4.2%+3.5%+2.1%+12.5%+12.5%
3
^Benchmark index: World Small Cap Gross Index until 30 September 2015 & S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD) from 1 October 2015
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 capital allocation decisions after fees and tax,
»adjusted NAV return – the net return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
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/
HEXCEL
CORPORATION
+11
%

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 an
authorised 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 may have no correlation with results historically achieved.
Marlin Global Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 484 0365 | Fax: +64 9 489 7139
Email: enquire@marlin.co.nz | www.marlin.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
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 25 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 up to 5.9m of its
shares on market in the year to 31 October 2019
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re-issued for the dividend reinvestment plan
Warrants
»Warrants put Marlin in a better position to grow
further, operate efficiently and pursue other capital
structure initiatives as appropriate
»A warrant is the right, not the obligation, to
purchase an ordinary share in Marlin at a fixed price
on a fixed date
»There are currently no warrants on issue

Management
Marlin’s portfolio is managed
by Fisher Funds Management
Limited. Ashley Gardyne (Senior
Portfolio Manager), Chris
Waters and Harry Smith (Senior
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 Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Marlin
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell, and Andy
Coupe; and non-independent
director Carmel Fisher.