- A combination of unfavorable market trends and weakness in select portfolio holdings negatively impacted the portfolio’s relative returns in Q4 and for 2021.
- New positions in PayTM and Abbott were initiated, while positions in Tencent and WuXi Biologics were liquidated. Several other positions were trimmed on strength, including Bank of Central Asia, Infosys, and Wal-Mart de Mexico, while others were added to on weakness, including Country Garden Services, Huazhu, MercadoLibre, Shandong Weigao, and XP.
- The portfolio is estimated to deliver 16% revenue growth and 23% earnings growth over the next three years, much higher than broad markets, with greater predictability and stronger quality characteristics.
- Co-Founder Gordon Marchand has announced that he will retire from the firm at the end of Q2 2023 as he turns 68 years old. Further details regarding the change are provided at the end of this commentary.
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 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. 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, 0.85%, 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. 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. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. SGA earnings growth forecasts are based upon portfolio companies’ non GAAP operating earnings. SGA Emerging Markets Growth Composite inception is 8/1/2014. Past performance is not indicative of future results.