Highlights:
- Portfolio outperformed the MSCI EM and EM Growth Indices in Q4 and for the year 2022
- While companies with higher growth prospects continued to underperform and cyclicals rebounded in Q4, strong performance from a number of portfolio holdings supported relative returns
- CP All, HDFC Bank, and AIA Group contributed most to performance; XP, Asian Paints, and Bank of Central Asia detracted most
- We initiated new positions in L’Oreal and Heineken in Q4, trimmed positions in BBCA, AIA Group, Bud APAC, Mengniu, Shandong Weigao, H World Group, and Yum China, and added to positions in MercadoLibre, WalMex, and XP
- Portfolio remains well positioned to deliver attractive, above-average growth in earnings and cash flows over the coming three years
- We are pleased to announce that Kishore Rao will replace Gordon Marchand on SGA’s Executive Committee (the group charged with running SGA’s business) effective July 1st, as Gordon retires from SGA
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.