Highlights:
- An underweight position in NVIDIA detracted about -2.0% from relative return.
- Business quality factors important to our approach were generally penalized in the strong up market; companies with higher sales stability and less leverage generally were not rewarded but higher gross margins were.
- The largest contributors to Q1 performance were NVIDIA, Amazon, and Netflix; the largest detractors from returns were UnitedHealth, Starbucks, and S&P Global.
- We initiated a new position in Waste Management.
- We trimmed positions in Corpay, Sherwin‑Williams, NVIDIA, Netflix, ServiceNow, Ecolab, Equinix, and Autodesk among others on strength and added to positions in UnitedHealth and Starbucks among others on weakness.
The opinions expressed herein reflect the opinions of Sustainable Growth Advisers, LP and are subject to change without notice. Past performance is no guarantee for future results. This information is supplemental and complements a GIPS Report that can be found with composite performance. The securities referenced in the article are not a solicitation or recommendation to buy, sell or hold securities. This commentary is provided only for qualified and sophisticated institutional investors.
Results are presented gross and net of management fees and include the reinvestment of all income. The Net Returns are calculated based upon the highest published fees. The net performance has been reduced by the amount of the highest published fee that may be charged to SGA clients, 0.75%, employing the U.S. Large Cap Growth equity strategy during the period under consideration. Actual fees charged to clients may vary depending on, among other things, the applicable fees schedule and portfolio size. SGA’s fees are available upon request and also may be found in Part 2A of its Form ADV. SGA U.S. Large Cap Growth Composite inception revised to 7/1/2003 from 4/1/2000 due to SEC New Marketing Rule change relating to use of predecessor performance record. The largest contributors and detractors are determined using a ranking of the absolute contribution to portfolio return by each security held over the period under consideration. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Upon request, free of charge, SGA can provide a list of all portfolio holdings held in SGA’s U.S. Large Cap Growth portfolio for the past year. SGA’s earnings growth forecast data is based upon portfolio companies’ non-GAAP operating earnings.