SGA
Sustainable Growth Advisers
em

Emerging Markets Growth

Portfolio Characteristics as of 12/31/16

Quality

Gross Margin
38.1%
Debt to EBITDA
1.7x
Net Debt/Market Cap
4.8%

Valuation

Enterprise Yield
3.3%

Growth

EPS Growth 2015
1.8%
Revenue Growth 2015
4.1%

General Characteristics

Number of Holdings
29
Weighted Average Market Cap
$64B
Active Share
89%

Portfolio Data as of 12/31/16

Performance

Absolute Returns

Geographic Exposure

Sector Exposure

Risk

SGA Gross (%)
SGA Net (%)
MSCI EM (%)
MSCI EM Growth (%)
MSCI ACWI with EM Exposure (%)
YTD 2016
1 - Year
2 - Year
Inception
2.1
2.1
-0.5
-1.0
1.0
1.0
-1.6
-2.1
11.2
11.2
-2.7
-6.3
7.6
7.6
-2.3
-4.9
11.7
11.7
-1.7
-4.8

Calendar Year

2016
2015
2014 (Partial)
2.1
-3.0
-1.4
1.0
-4.1
-1.8
11.2
-14.9
-9.6
7.6
-11.3
-7.1
11.7
-13.5
-8.3
Sustainable Growth Advisers, LP (“SGA”) was formed in 2003 and is a registered investment advisor under the Investment Advisers Act of 1940. SGA manages portfolios of publicly traded equity assets according to its “Large Cap Growth Equity” investment approach for pooled funds, institutions, trusts and private accounts.  SGA is an independent investment management firm that is not affiliated with any parent organization. The SGA Emerging Markets Growth Composite contains an SGA proprietary non-fee paying discretionary global large cap emerging growth equity portfolio that invests in companies around the world that are direct beneficiaries of the rapid emergence of the middle class across many developing economies and its related wealth creation.  For comparison purposes the composite is measured against the MSCI ACWI with EM Exposure Net; MSCI Emerging Markets Growth Net and MSCI Emerging Markets Net Total Return Indices.  The U.S. Dollar is the currency used to express performance.

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2015 (last full calendar year of reported EPS data) for SGA’s longest tenured account. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected.  Debt to EBITDA is Total Debt to Forward One Year EBITDA.  Holdings/weights are subject to change without notice. The information set forth herein should not be considered to be investment advice, a recommendation to purchase or sell a specific security or as indicative of future performance.

Returns (gross and net of fees through 12/31/2016) are those of the SGA Emerging Markets Growth Composite. Composite inception is 8/1/2014. Returns reflect the reinvestment of dividends, interest and other earnings. For interest and capital gains, SGA does not withhold taxes, for dividends SGA will withhold taxes as reported by the client’s custodian. MSCI EM, MSCI EM Growth and MSCI ACWI with EM Exposure Return is Net Total Return (MSCI Net Total Return indexes reinvest dividends after the deduction of withholding taxes). 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, 1.10%, employing the Emerging Markets 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. Past performance does not guarantee future results.

SGA claims compliance with the Global Investment Performance Standards (GIPS®). Disclosures regarding the composite and a complete list and description of the firm’s composites and/or a presentation that adheres to the GIPS® standards are available upon request.  “SGA – Performance Disclosure and Composite Description”.

SGA Gross - $98
SGA Net - $95
MSCI EM - $86
MSCI EM Growth - $89
MSCI ACWI with EM Exposure - $89
EM Returns Graph Q416v2

Returns Volatility

21% lower

13.2%
SGA
16.8%
MSCI EM
Sustainable Growth Advisers, LP (“SGA”) was formed in 2003 and is a registered investment advisor under the Investment Advisers Act of 1940. SGA manages portfolios of publicly traded equity assets according to its “Large Cap Growth Equity” investment approach for pooled funds, institutions, trusts and private accounts.  SGA is an independent investment management firm that is not affiliated with any parent organization. The SGA Emerging Markets Growth Composite contains an SGA proprietary non-fee paying discretionary global large cap emerging growth equity portfolio that invests in companies around the world that are direct beneficiaries of the rapid emergence of the middle class across many developing economies and its related wealth creation.  For comparison purposes the composite is measured against the MSCI ACWI with EM Exposure Net; MSCI Emerging Markets Growth Net and MSCI Emerging Markets Net Total Return Indices.  The U.S. Dollar is the currency used to express performance.

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2015 (last full calendar year of reported EPS data) for SGA’s longest tenured account. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected. Debt to EBITDA is Total Debt to Forward One Year EBITDA. Holdings/weights are subject to change without notice. The information set forth herein should not be considered to be investment advice, a recommendation to purchase or sell a specific security or as indicative of future performance.

Returns (gross and net of fees through 12/31/2016) are those of the SGA Emerging Markets Composite. Returns reflect the reinvestment of dividends, interest and other earnings. For interest and capital gains, SGA does not withhold taxes, for dividends SGA will withhold taxes as reported by the client’s custodian, affecting net returns. MSCI EM, MSCI EM Growth and MSCI ACWI with EM Exposure Return is Net Total Return (MSCI Net Total Return indexes reinvest dividends after the deduction of withholding taxes). 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, 1.10%, employing the Emerging Markets 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. Past performance does not guarantee future results. Return volatility data presented is standard deviation comparison since inception of the Emerging Markets Composite.

SGA claims compliance with the Global Investment Performance Standards (GIPS®). Disclosures regarding the composite and a complete list and description of the firm’s composites and/or a presentation that adheres to the GIPS® standards are available upon request. “SGA – Performance Disclosure and Composite Description”.

By Revenue
EM Revenue Q416
By Domicile
EM Domicile Q416

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2015 (last full calendar year of reported EPS data) for SGA’s longest tenured account. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected. Debt to EBITDA is Total Debt to Forward One Year EBITDA. Holdings/weights are subject to change without notice. The information set forth herein should not be considered to be investment advice, a recommendation to purchase or sell a specific security or as indicative of future performance.

Representative portfolio weights as of 12/31/16. Portfolio holdings are subject to change daily. Under no circumstances does the information contained within represent a recommendation to buy or sell securities. It should not be assumed that investments in the securities were or will be profitable. A complete list of all securities recommended for the strategy can be obtained free of charge by contacting SGA at (203) 348-4742.

SGA
MSCI EM
+/-
Discretionary
26.4%
13.7%
+12.7%
Staples
30.6%
6.6%
+24.0%
Energy
3.4%
7.6%
-4.2%
Financials
8.7%
26.7%
-18.0%
Health Care
3.1%
2.4%
+0.7%
Industrials
2.7%
6.2%
-3.5%
Technology
20.8%
20.3%
+0.5%
Materials
0.0%
7.7%
-7.7%
Real Estate
0.0%
0.0%
0.0%
Telecom
0.0%
5.9%
-5.9%
Utilities
0.0%
2.8%
-2.8%
Cash
4.3%
0.0%
+4.3%

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2015 (last full calendar year of reported EPS data) for SGA’s longest tenured account. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected. Debt to EBITDA is Total Debt to Forward One Year EBITDA. Holdings/weights are subject to change without notice. The information set forth herein should not be considered to be investment advice, a recommendation to purchase or sell a specific security or as indicative of future performance.

Representative portfolio weights as of 12/31/16. Portfolio holdings are subject to change daily. Under no circumstances does the information contained within represent a recommendation to buy or sell securities. It should not be assumed that investments in the securities were or will be profitable. The list provided may not represent all of the securities recommended for advisory clients. A complete list of all securities recommended for the strategy can be obtained free of charge by contacting SGA at (203) 348-4742.

USLCG Guide
EM Sharpe Ratio
EM Information Ratio
EM Downside Capture Ratio

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2015 (last full calendar year of reported EPS data) for SGA’s longest tenured account. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected. Debt to EBITDA is Total Debt to Forward One Year EBITDA. Holdings/weights are subject to change without notice. The information set forth herein should not be considered to be investment advice, a recommendation to purchase or sell a specific security, or as indicative of future performance.

Data is from 8/1/2014 to 12/31/2016. Source is FactSet SPAR. Universe is Investment Metrics Emerging Markets Equity. Peer size is 256. Peer universe data and SGA data based on gross returns and do not reflect the deduction of investment advisory fees. SGA’s fees are available upon request and also may be found in Part 2A of its Form ADV. Actual fees charged to clients may vary depending on, among other things, the applicable fees schedule and portfolio size. It should not be assumed that future results will be reflective of past performance.