- SGA’s Global Growth portfolio returned -10.5% (gross) and -10.7% (net) in Q4 compared to -12.8% for its primary benchmark the MSCI All Country World Index (ACWI), and -14.7% for the ACWI Growth Index
- Trade tensions between the U.S. and China overshadowed the signing of the new NAFTA agreement, and led to a marked rise in market volatility as investors’risk aversion increased
- Global markets took on a decidely defensive tone with stocks deemed to be most sensitive to slowing global economic growth most negatively impacted; emerging markets held up relatively well despite significant weakness in Chinese stocks
- Larger-cap companies performed best; the reward to business quality was mixed with value, high debt, companies with earnings and lower betas outperforming
- Utilities and Real Estate performed best while more economically sensitive sectors such as Energy and Technology performed worst; Health Care and Utilities were the only sectors to generate positive retuns for 2018
- A new position in Abbott was initiated and existing high confidence holdings were supplemented as positions in Amorepacific, MYOB, Red Hat and Schlumberger were liquidated; other positions were adjusted as we took advantage of the increase in market volatility
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.