Highlights:
- Portfolio trailed its MSCI ACWI ex USA benchmark in Q2 slightly as value-oriented companies outperformed; the portfolio outperformed the MSCI ACWI ex USA Growth Index
- Quality factors unrewarded as lower quality companies continued to outperform; expect higher quality growth companies to be increasingly rewarded moving forward
- Positions in Yum China, Shandong Weigao, and AIA Group were the largest positive contributors to performance; Positions in MercadoLibre, XP, and Recruit detracted most
- A position in Sika was initiated and the portfolio’s position in Medtronic was liquidated
- Portfolio is forecasted to grow earnings 17% per year over the next three years, higher than the MSCI ACWI ex USA Index with higher quality characteristics and greater predictability
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 International 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. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Upon request, free of charge, SGA can provide a list of all portfolio holdings held in SGA’s International portfolio for the past twelve months. Past performance is not indicative of future results. SGA’s earnings growth forecast data is based upon portfolio companies’ Non-GAAP operating earnings.