- The portfolio posted a strong absolute return of 11.5% (Gross) and 11.3% (Net) versus 11.0% for the MSCI All Country World Index (ACWI) and 12.7% for the ACWI Growth.
- For the year, the portfolio returned 28.2% (Gross) and 27.1% (Net) versus 22.2% for the ACWI and 33.2% for the ACWI Growth.
- The business quality characteristics we seek in companies (pricing power, recurring revenues, and less debt) performed better during the quarter providing a more favorable investment environment although companies with stable sales growth were not rewarded for the year.
- The largest contributors to Q4 performance were Microsoft, Workday, and Amazon, while the largest detractors were Mengniu Dairy, Aon, and CP All.
- We trimmed positions in MercadoLibre, Workday, S&P Global, and Atlassian on strength and added to positions in Danaher, Canadian Pacific Kansas City (CPKC), Autodesk, Novo Nordisk, Alcon, and Aon on weakness; no positions were liquidated, and no new positions were initiated during the period.
- Portfolio revenues and earnings are expected to grow by 12% and 16%, respectively, over the next three years consistent with historic levels.
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 GIPS Report 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 investments, calculating performance, and preparing GIPS Reports are available upon request. SGA’s earnings growth forecast data is based upon portfolio companies’ Non-GAAP operating earning.