- SGA’s Global Growth portfolio returned 3.1% (gross) and 2.9% (net) in Q1 2018 compared to -1.0% for its primary benchmark the MSCI All-Country World Index (ACWI) and 0.7% for the MSCI ACWI Growth Index
- Rising inflationary expectations and interest rates together with concerns over U.S. trade policy and the potential for a trade war with China led to a spike in market volatility off historic lows
- Smaller-cap growth companies with higher betas performed best; the reward to business quality was generally supportive with higher return on equity companies and those with earnings outperforming
- Technology and Consumer Discretionary sectors performed best while Telecom, Consumer Staples and Energy performed the worst
- Turnover was average with positions in Nielsen and Lowe’s being sold to fund new positions in Praxair and Yum! Brands; weights in MercadoLibre, Tencent, and Fast Retailing among others were reduced on strength and positions in Regeneron, TJX and HDFC Bank among others were added to on weakness
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.