- SGA’s Emerging Markets Growth portfolio returned -10.6% (gross) and -10.8% (net) in Q4 2018 compared to -7.5% for its primary benchmark the MSCI Emerging Markets Index; during the same period the MSCI Emerging Markets Growth Index returned -8.2% and the MSCI ACWI with EM Exposure Index returned -7.8%
- Emerging markets outperformed developed markets after trailing significantly in Q3; the Brazilian and Indian markets were strong while the Chinese market declined
- Large-cap and value companies outperformed early in the quarter before trends reversed; the reward to business quality metrics was mixed
- Utilities and Real Estate provided the only positive returns in the index; Financials held up well, while the Health Care and Consumer Discretionary sectors performed worst
- The portfolio’s stock selection in the Consumer Discretionary and Consumer Staples sectors, as well as a significant underweight to Financials, detracted from relative performance
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 full disclosure presentation 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. SGA earnings growth forecasts are based upon portfolio companies’ non-GAAP operating earnings. SGA Emerging Markets Growth Composite inception is 8/1/2014.
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, 1.1%, 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. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Upon request, free of charge, SGA can provide a list of all portfolio holdings held in SGA’s Emerging Markets portfolio for the past year. Past performance is not indicative of future results