- SGA’s Global Growth portfolio returned 9.6% (gross) and 9.4% (net) in Q1 2017 compared to 6.9% for its primary benchmark the MSCI All Country World Index (ACWI) and 9.1% for the MSCI ACWI Growth Index
- Emerging markets performed best followed by developed markets outside the U.S.; Emerging Asia, Latin America and Asia Pacific ex-Japan were the best performing regions
- Stock indexes generated strong absolute returns on investor optimism that global economic growth would strengthen, improved economic data in Europe and signs that recent populist movements may have peaked
- Strong pro-cyclical headwinds from Q4 2016 were replaced by broader large cap growth leadership; business quality factors were generally positive as companies with higher ROE’s, low debt and earnings performed better
- Sector leadership was relatively narrow with the Technology, Health Care and Consumer Discretionary sectors outperforming while Energy stocks declined on concerns over building inventories and whether OPEC would respect previously announced production cuts
- SGA’s performance benefited from both sector allocation and stock selection in Technology, and selection in Financials and Consumer Discretionary; stock selection in the Consumer Staples sector detracted most
- Amgen was sold to fund other more attractive growth opportunities while positions in Mondelez, MYOB, Fast Retailing, FEMSA, and others were added to and positions in Apple, Colgate-Palmolive, Lowe’s and MercadoLibre were trimmed on strength
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.
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, 0.75%, 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. The performance record presented for periods prior to July 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. 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 U.S. Large Cap Growth portfolio for the past year. SGA’s earnings growth forecast data is based upon portfolio companies’ non-GAAP operating earnings.