MLN – May 2022 monthly update

1
A WORD FROM THE MANAGER
Marlin’s gross performance return for April was down (7.1%), while
the adjusted NAV return was down (6.5%). This compared with our
global benchmark, S&P Large Mid Cap/S&P Small Cap Index (50%
hedged to NZD), which was down (3.9%).
Global equity markets dropped in April, given headwinds from
numerous ongoing factors including inflation, rising interest rates,
and growth and supply chain concerns stemming from COVID
lockdowns in China. Developed market equities were down 8% in the
month, bringing year-to-date losses to 13%. The tech-heavy Nasdaq
Composite Index fell 14% for the month and is down 21% year-to-
date.
In contrast to falling share prices, corporate fundamentals still appear
to be strong. As an example, the US market is seeing a strong
start to Q1 earnings season, with 76% of companies so far beating
expectations. Companies that have reported so far have reported
average earnings growth of 8%, with continued growth expected
throughout the year despite the economic headwinds.
Portfolio Changes
Earnings season has begun, with 14 portfolio companies reporting
during the month. The results highlighted solid underlying growth
and execution by most of our companies, although Netflix results
were disappointing, and Amazon’s results showed that its rapid
infrastructure expansion and cost inflation are posing near-term
challenges.
Mastercard, Microsoft, Alphabet, Meta Platforms and our
bank holdings First Republic and Signature Bank all delivered
solid results. As did homebuilder NVR and aerospace composites
manufacturer Hexcel.
Positive contributors to performance in the month included Dollar
General (+7%) and Dollar Tree (+1%). While there has been
limited new news for these companies, we expect that as inflation
bites, consumers will trade down with value for money increasing
in importance. This should benefit Dollar General and Dollar Tree
which operate more than 18,000 and 16,000 stores across the US
respectively, all within convenient distance of the majority of American
consumers.
Tencent (+1%) recovered towards the end of the month, as
sentiment improved on news signalling a pullback of government
crackdowns on the industry. Regulatory scrutiny has been a
persistent overhang to market sentiment for China’s tech industry
during the past year, as a raft of regulatory announcements were
issued to rein in monopolies and promote common prosperity in the
country. Tencent (and our other Chinese holding Alibaba) are more
aligned with policymakers’ new goals as they play an important role
in the digitalisation of commerce and industry in China. We remain
confident in the long-term prospects for both Tencent and Alibaba.
Mastercard (+2%) reported strong earnings and continues to
execute well. Payment volumes saw impressive growth driven by
pent-up demand for travel and leisure and remained strong during
the quarter despite rising inflation. The company is likely to benefit
from higher prices due to inflation, although this may eventually affect
consumer spending if it becomes too high or persistent.
Detractors from performance in the month included PayPal, Netflix
and Amazon.
PayPal (-24%) sold off significantly at the start of April along with
growth and technology stocks more generally. PayPal partially
rebounded towards the end of the month after reporting earnings
that were better than feared. After a period of rapid investment over
the last two years to attract new customers as ecommerce growth
surged, PayPal has experienced slower growth in recent quarters.
In response to this PayPal has reduced its growth guidance and is
refocusing on a return to cost control and measured expansion as
was the focus pre-pandemic. We believe PayPal remains very well
positioned to take share in the fast-growing e-commerce and digital
payments segments. Despite the recent headwinds, they are still
expected to grow revenue (ex-eBay) by 15%+ this year.
Netflix (-49%) fell materially in the month after reporting earnings and
providing weaker than expected guidance. Shares are now trading at
late-2017 levels, despite the company having doubled its subscriber
base and is generating 2.6-times the revenue back then. Netflix
lost 0.2mn subscribers in Q1 – the first time in over a decade the
streaming service has seen a net loss – and expects a further 2mn
losses in Q2. The company attributes subscriber headwinds primarily
to macroeconomic pressures, the Russia-Ukraine conflict, and
competition – but no doubt recent subscription price hikes are also
having an impact. We continue to believe Netflix is a quality business,
with dominance in global streaming and content spend leverage,
and is advantageously positioned in the structurally growing SVOD
(streaming video-on-demand) industry. Netflix is a new holding which
we initiated at a small position. It currently has a small 1.5% weight in
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
May 2022
Warrant Price
$
0.00
$
1. 1 6
Share Price
MLN NAVPREMIUM
1
$
0.98 18.5
%

as at 30 April 2022

2
KEY DETAILS
as at 30 April 2022
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
$1.20
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
194m
MARKET CAPITALISATION
$225m
GEARING
None (maximum permitted 20% of
gross asset value)
the portfolio and as with any company that delivers a disappointing
result of this magnitude, we are undertaking a detailed review of our
investment thesis.
Amazon (-24%) reported its first operating profit loss in seven years
at its quarterly earnings update. Inflation and capacity expansion
added $6 billion in costs, weighing on profitability. Over the last two
years, Amazon has been through a significant investment cycle,
doubling the size of operations and workforce. These investments
contributed two-thirds of the additional cost. We are confident
Amazon will return to profitability as the company grows into this
newly created capacity and as the company’s sales mix continues to
shift towards the highly profitable segments of Amazon Web Services
(cloud computing) and Amazon Marketing Services.
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Limited
Meta (-10%) had a similar theme to PayPal going into earnings. With
sentiment negative on the stock, the earnings and guidance were not
as bad as feared and Meta rose c.18% after its results. The company
noted that Reels now makes up more than 20% of user time on
Instagram and is growing quickly. While currently under-monetised,
demand to date is very positive for Reels and we expect Meta will be
able to monetise short-form videos successfully in the future
SECTOR SPLIT
as at 30 April 2022
31
%
CONSUMER
DISCRETIONARY
7
%
HEALTH CARE
21
%

FINANCIALS
24
%
COMMUNICATION
SERVICES
GEOGRAPHICAL
SPLIT
as at 30 April 2022
8
%
ASIA
77
%
NORTH
AMERICA
3
%
INDUSTRIALS
1
%

SOUTH AMERICA
The Marlin portfolio also holds cash.
12
%
12
%
INFORMATION
TECHNOLOGY

WEST
EUROPE

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
$
0.00
Nov
2016
Nov
2017
$
3.00
$
4.00
$
5.00
$
2.00
Nov
2018
Nov
2019
Nov
2020
Nov
2021
3
APRIL’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month
NETFLIX
-49
%
PAYPAL
-24
%
AMAZON
-24
%
ALPHABET
-19
%
5 LARGEST PORTFOLIO POSITIONS as at 30 April 2022
META PLATFORMS
(Previously FACEBOOK)
9
%
ALPHABET
7
%
TENCENT
7
%
PAYPAL
6
%
ALIBABA
6
%
The remaining portfolio is made up of another 18 stocks and cash.
PERFORMANCE to 30 April 2022
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(5.8%)(12.5%)(15.3%)+20.8%+20.0%
Adjusted NAV Return(6.5%)(17.1%)(15.5%)+9.5%+11.7%
Portfolio Performance
Gross Performance Return (7.1%)(16.8%)(14.5%)+12.8%+15.2%
Benchmark Index^(3.9%)(6.3%)(2.7%)+8.5%+8.8%
^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 capital allocation decisions after expenses, fees and tax,
»adjusted NAV return – the net return to an investor after expenses, fees and tax,
»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/
STONECO
-18
%
TOTAL SHAREHOLDER RETURN to 30 April 2022

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 | 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 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 re-
issued for the dividend reinvestment plan
Warrants
»On 19 April 2021 a new issue of warrants
(MLNWE) was announced
»The warrants were issued at no cost to eligible
shareholders in the ratio of one warrant for every
four Marlin shares held
»The warrants were allotted to shareholders on 17
May 2021 based on a 14 May 2021 Record Date
and were listed on the NZX Main Board from 18
May 2021. (Information pertaining to the warrants
was mailed/emailed to shareholders in early May
2021)
»The final Exercise Price of each warrant is $1.18
»The Exercise Date for the warrants (MLNWE) is
20 May 2022

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. 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 Board of Marlin comprises
independent directors Alistair
Ryan (Chair), Carol Campbell,
Andy Coupe and David
McClatchy.