MLN – December 2023 monthly update

1
A WORD FROM THE MANAGER
Marlin’s gross performance return for November was up 7.5%,
while the adjusted NAV return was up 7.1%. This compared with
our global benchmark, S&P Large Mid Cap/S&P Small Cap Index
(50% hedged to NZD), which was up 5.9%.
In November, global equities were up strongly +9.2%, bucking
the prior trend of 3 down months in a row. US and Japanese
equities were also circa +9%. European equities (+6.7%) and
emerging markets (+8.0%) slightly underperformed. Global
growth stocks outperformed value stocks. However, in the US,
value slightly outperformed growth.
The rally was primarily driven by the sharpest rally in bonds in
years. The US 10-year bond yield as a proxy for global interest
rates fell 60bp, the sharpest fall in yields in over a decade.
Portfolio
Gartner, the leading IT research business was up +31% in
the month on the back of a strong earnings report that was
well-received by the market. New business wins accelerated
following several quarters of cautious spending by tech vendor
customers. Enterprise customers (which make up most of the
research segment revenue) showed continued resilience, growing
mid-teens year-on-year, supporting management’s view around
the essential nature of this research. Margins were again the
standout contributor, 350bps ahead of expectations as the
company continues to reduce their cost base post the pandemic.
Salesforce (+25%) had a strong month and reported solid
earnings at the end of November. Salesforce met revenue
expectations, but operating profit margins were the standout
in the quarter. Salesforce continues to expand margins rapidly
as the company is undergoing a period of expense growth
rationalisation, like other companies in the tech space. Operating
profit margins have expanded by 11.3% to 17.2% from 5.9% a
year ago, demonstrating very high incremental margins for the
business and the ability to protect profits when sales growth
slows.
Alibaba (-9%) fell on weaker than expected earnings
and the cancellation of the proposed spin-off of the cloud
business. Gross merchandise volume modestly declined
given a combination of a weak Chinese consumer and
ongoing competition from both live-streaming and low-cost
ecommerce competitors. While margins continued to improve
versus last year, the company plans to invest back into the
core ecommerce business to support user engagement and
price competitiveness, which could hamper further margin
improvement near-term.
Portfolio activity
Additions to the portfolio:
During the month we added two high quality medical equipment
companies to the portfolio, Intuitive Surgical and Dexcom.
Both companies lead their markets, have large addressable
markets with long runways for growth, and benefit from material
barriers to entry. We took the opportunity to add them to the
portfolio as both companies sold off through the second half of
this year on GLP-1 weight loss drug concerns.
Intuitive Surgical is the pioneer and leading manufacturer of
soft-tissue surgical robotics, used to assist surgeons to perform
minimally invasive surgical procedures. Since Intuitive first
launched its ‘da Vinci’ robot over twenty years ago, there are
now over 8,000 systems placed around the world, performing
over two million procedures annually. Robotic systems aid and
enhance the surgeon’s capabilities, and both increase comfort
and reduce fatigue as the surgeons can sit at a console versus
standing over patients for hours. This enhanced capability of
robotics delivers better clinical outcomes than the equivalent
open surgery. Since launching its first robotic system around
twenty years ago, Intuitive has largely enjoyed the market to
itself. Robotics is hard and switching costs are high. Competitors
have spent billions of dollars and many years to produce
systems with limited commercial success to date. And hospitals
are unlikely to easily switch given they have built significant
infrastructure around these systems in terms of training,
workflows and even operating theatre set-ups.
Dexcom develops, manufactures, and distributes continuous
glucose monitoring (CGM) devices for people with diabetes.
Compared to finger pricking, a CGM offers 1) continuous
glucose readings vs. a static one-off, enabling better continuous
monitoring by the user so they stay “within range” for a greater
proportion of the day; 2) similar or better accuracy; 3) more
convenience – no more carrying around lancets and strips or
taking time out to prick, real time data & charting in an app on
a smart phone. Putting all this together, CGMs help drive better
health outcomes. Barriers to entry is high in CGM due to high
1
Share Price Discount to NAV (using the net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
December 2023
$
0.91
Share Price
DISCOUNT
1
0.3
%

as at 30 November 2023
MLN NAV
$
0.91

CONSUMER
DISCRETIONARY
2
KEY DETAILS
as at 30 November 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
$1.06
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
212m
MARKET CAPITALISATION
$193m
GEARING
None (maximum permitted 20% of
gross asset value)
upfront investment and specialist know-how. It takes years to
innovate and develop a new sensor before receiving regulatory
clearance. Only circa 6-7% of the diabetic population globally
use a CGM device, so we believe there are many years of growth
ahead for Dexcom.
Exits from the portfolio:
We exited PayPal during November due to concerns around
competition and share loss. PayPal (PYPL) had an early lead in
eCommerce payments due its trusted brand, security, and being
the most frictionless checkout option (vs. manual card-entry
and guest checkout). This created a loyal core customer base,
a two-sided-network and increased checkout conversion for
merchants. This was particularly important in the early days of
SECTOR SPLIT
as at 30 November 2023
27
%
8
%
19
%

FINANCIALS
19
%
GEOGRAPHICAL SPLIT
as at 30 November 2023
6
%
WEST
EUROPE
79
%
NORTH
AMERICA
5
%

CASH &
DERIVATIVES
18
%
10
%

ASIA
5
%
CASH &
DERIVATIVES
Sam Dickie
Senior Portfolio Manager
Fisher Funds Management Limited
eCommerce as consumers and merchants had less trust of one
another and PYPL could bridge this gap. But these advantages
have eroded and PYPL is facing stiff competition from multiple
players such as Apple Pay, Shop Pay, and Amazon’s Buy with
Prime.
HEALTH CARE
INFORMATION
TECHNOLOGY
4
%

CONSUMER
STAPLES
COMMUNICATION
SERVICES

3
NOVEMBER’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
(in local currency) during the month
GARTNER
+31
%
SALESFORCE INC
+25
%
DANAHER CORP
+16
%
TENCENT HOLDINGS
+15
%
5 LARGEST PORTFOLIO POSITIONS as at 30 November 2023
AMAZON
8
%
MICROSOFT
6
%
ALPHABET
6
%
META PLATFORMS
6
%
SALESFORCE
6
%
The remaining portfolio is made up of another 17 stocks and cash.
PERFORMANCE to 30 November 2023
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+2.2%(2.8%)+4.7%(4.4%)+10.2%
Adjusted NAV Return+7.1%+0.0%+16.3%+2.2%+9.8%
Portfolio Performance
Gross Performance Return +7.5%+0.8%+18.9%+4.3%+12.7%
Benchmark Index^+5.9%(2.2%)+8.1%+6.7%+8.4%
^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 marlin.co.nz/about-marlin/marlin-policies.
NETFLIX INC
+13
%
TOTAL SHAREHOLDER RETURN to 30 November 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
Nov
2021
Nov
2023

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
»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 Marlin warrants on issue

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.