SGA
Sustainable Growth Advisers
us-lcg

U.S. Large Cap Growth

Portfolio Characteristics as of 6/30/17

Quality

Gross Margin
36.9%
Debt to EBITDA
2.1x
Net Debt/Market Cap
9.6%

Valuation

Enterprise Yield
3.3%

Growth

EPS Growth Last 3 Years
13.5%
Revenue Growth Last 3 Years
8.7%

General Characteristics

Number of Holdings
29
Weighted Average Market Cap
$115B
Active Share
82%

Portfolio Data as of 6/30/17

Performance

Absolute Returns

Earnings Growth

Sector Exposure

Risk

SGA Gross (%)
SGA Net (%)
Russell 1000 Growth Index (%)
S&P 500 Index (%)
YTD 2017
1 – Year
3 – Year
5 – Year
7 – Year
10 – Year
Inception
17.5
19.1
12.1
14.3
16.8
10.2
6.8
17.1
18.2
11.3
13.4
15.9
9.4
6.0
14.0
20.4
11.1
15.3
16.5
8.9
3.0
9.3
17.9
9.6
14.6
15.4
7.2
4.8

Calendar Year

2016
2015
2014
2013
2012
2011
2010
1.8
9.4
9.4
28.0
21.1
4.9
13.2
1.0
8.6
8.6
27.0
20.2
4.1
12.4
7.1
5.7
13.0
33.5
15.3
2.6
16.7
12.0
1.4
13.7
32.4
16.0
2.1
15.1

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.  SGA US Large Cap Growth Composite contains fee-paying large cap growth equity portfolios under full discretionary management of the firm.  Except as described above with respect to portability, no alteration of the composite as presented here has occurred because of changes in firm personnel.  For comparison purposes the composite is measured against the S&P 500 and Russell 1000 Growth 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 12/31/2016 (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. 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 6/30/2017) are those of the SGA U.S. Large Cap Growth 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. 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 is 4/1/2000. The performance record presented for periods prior to 7/1/2003 occurred before to the inception of SGA, and represents the portable performance record established by two of SGA’s founders (and investment committee members) Gordon Marchand and George Fraise while affiliated with a prior firm. 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 - $310
SGA Net - $273
Russell 1000 Growth Index - $167
S&P 500 Index - $226
USLCG Returns Graph

Returns Volatility

18% lower

13.7%
SGA
16.7%
R1000G

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.  SGA US Large Cap Growth Composite contains fee-paying large cap growth equity portfolios under full discretionary management of the firm.  Except as described above with respect to portability, no alteration of the composite as presented here has occurred because of changes in firm personnel.  For comparison purposes the composite is measured against the S&P 500 and Russell 1000 Growth 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 12/31/2016 (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. 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 6/30/2017) are those of the SGA U.S. Large Cap Growth Equity 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. 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 is 4/1/2000. The performance record presented for periods prior to 7/1/2003 occurred before to the inception of SGA, and represents the portable performance record established by two of SGA’s founders (and investment committee members) Gordon Marchand and George Fraise while affiliated with a prior firm. Past performance does not guarantee future results. Return volatility data presented is standard deviation comparison since inception of the U.S. Large Cap Growth 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”.

SGA - 13.6%/yr.
R1000G - 6.2%/yr
USLCG Earnings Growth

Earnings Volatility

79% lower

0.3
SGA
1.6
R1000G
Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth and Volatility data is through 12/31/2016 (last full calendar year of reported EPS data) for SGA’s longest tenured account. Earnings volatility data presented is coefficient of variation, which is standard deviation relative to the mean. SGA EPS Growth data is based upon portfolio companies’ non-GAAP operating earnings. SGA Enterprise Yield projected. Holdings/weights are subject to change without notice and should not be considered to be investment advice, a recommendation to purchase or sell a specific security or as indicative of the performance of SGA’s portfolio. The record presented for periods prior to 7/1/2003 occurred before to the inception of SGA, and represents the portable performance record established by two of SGA’s founders (and investment committee members) Gordon Marchand and George Fraise while affiliated with a prior firm. Past performance does not guarantee future results.
SGA
R1000G
+/-
Discretionary
22.2%
18.6%
+3.6%
Staples
4.9%
7.6%
-2.7%
Energy
6.1%
0.8%
+5.3%
Financials
3.2%
3.4%
-0.2%
Health Care
13.4%
13.7%
-0.3%
Industrials
6.4%
12.4%
-6.0%
Technology
34.5%
36.1%
-1.6%
Materials
4.0%
3.9%
+0.1%
Real Estate
3.1%
2.6%
+0.5%
Telecom
0.0%
0.9%
-0.9%
Utilities
0.0%
0.0%
0.0%
Cash
2.2%
0.0%
+2.2%

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2016 (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. 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 the performance of SGA’s portfolio.

Representative portfolio weights as of 6/30/17. 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
USLCG Sharpe
USLCG Information
USLCG Downside

Source: Bloomberg, FactSet, Baseline, and SGA Estimates and Adjustments based upon a representative portfolio. Earnings Growth data is through 12/31/2016 (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. 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 7/1/2007 to 6/30/2017. Source is FactSet SPAR. Universe is Investment Metrics U.S. Large Cap Growth Equity. Peer size is 237. 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.