- Portfolio returned -4.4% (Gross) in Q3 and -4.6% (Net) versus -3.7% for the MSCI ACWI Mid Cap Index and -5.0% for the MSCI ACWI Mid Cap Growth Index.
- Pressure on stocks with higher levels of sales stability created a headwind.
- Atlassian, Universal Music Group, and MSCI contributed most to performance, while Adyen, Shandong Weigao, and Experian detracted most.
- We liquidated the position in Match and reinvested the capital in Gartner.
- XP was trimmed on recent strength while Universal Music Group was added to on weakness.
- Portfolio revenues and earnings are expected to grow by 12% and 17%, respectively, over the next three years versus 5% and 12% for the MSCI ACWI Mid Cap as we continue to expect slowing macroeconomic and profit growth.
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 Mid 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 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 Mid Cap 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.