- Our approach faced a headwind as smaller cap, lesser quality more economically sensitive stocks outperformed on rising expectations for a strong economic recovery
- The portfolio trailed the MSCI ACWI with residual sector weights and stock selection detracting from relative returns
- The portfolio’s underweight in the strongly performing Financials sector and lack of exposure to Energy stocks presented a headwind for performance, while stock selection in the Consumer Discretionary also hurt relative returns; strong selection in the Industrials and Communication services sectors boosted relative returns
- The portfolio’s position in Fast Retailing was sold due to valuation and the proceeds reinvested in media leader Walt Disney
- We continued to trim positions that had appreciated substantially such as Alibaba, HDFC Bank and Kansas City Southern, while buying additional shares of other stocks that remained attractively valued such as Dassault, Equinix, and Workday among others
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, 0.85%, employing the Global 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 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. Upon request, free of charge, SGA can provide a list of all portfolio holdings held in SGA’s Global Growth portfolio for the year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. SGA’s earnings growth forecast data is based upon portfolio companies’ Non-GAAP operating earnings.