- The portfolio generated strong absolute and relative returns as global equity markets rebounded in response to hopes for a faster than expected economic recovery as countries allowed businesses to re-open, and significant monetary and fiscal stimulus was applied
- The market advance was driven by a narrow group of retail and e-commerce related consumer and technology stocks; we used increased market volatility to lock-in gains where valuations had risen and traded up in terms of growth and cash flow visibility
- Stock selection and residual sector allocations each contributed positively to the portfolio’s outperformance; selection was strongest in Information Technology where positions in PayPal and Autodesk contributed most; overweights to the strongly performing Consumer Discretionary and Information Technology sectors contributed positively
- New positions were initiated in Facebook and Kansas City Southern while the portfolio’s positions in Nestle, Booking Holdings and TJX Companies were sold; positions in Amazon, MercadoLibre, Nike, PayPal, SAP and Tencent were trimmed on strength while positions in Alphabet, Linde, New Oriental Education and Visa were added to
- Given the superior business quality and predictability of our companies, the portfolio is expected to generate significantly greater revenue and earnings growth than the MSCI ACWI Index benchmark over the coming three years despite significant uncertainties over the pandemic, economic growth, and other uncertainties
- We are pleased to announce that HK Gupta will join our Global Growth equity portfolio management team effective January 1st, 2021 given the strong contributions he has made in research and portfolio management since joining SGA in 2014 and co-managing our Emerging Market and Global Mid-Cap portfolios; we are also pleased to announce that Peter Knudsen was promoted to Client Portfolio Manager effective July 1st
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, 0.90%, 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. 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.