- SGA’s Emerging Markets Growth portfolio returned 9.0% (gross) and 8.8% (net) in Q4 2019 compared to 11.8% for its primary benchmark the MSCI Emerging Markets Index; during the same period the MSCI Emerging Markets Growth Index returned 13.7%.
- A trade truce between the U.S. and China, continued stimulus efforts from global central banks and expectations for improving global economic growth drove a strong market rally in Q4. The portfolio delivered strong absolute returns, but trailed the broad market.
- An overweight to the Consumer Staples sector, the worst performing sector, detracted most from relative returns. Selection in, and an underweight to, Information Technology, which was the strongest performing sector, also detracted from relative returns.
- New positions in Heineken and WuXi Biologics were initiated and the portfolio’s position in Nestle was liquidated. Positions in Infosys and MercadoLibre were added to on weakness and positions in Ambev, FEMSA, Huazhu Group, Raia Drogasil, Shandong Weigao, and Sinopharm were trimmed.
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.