- The portfolio trailed the MSCI ACWI ex-USA Index for the quarter, outperforming in August amid trade and macro-economic driven weakness, but underperforming in July and particularly September as cyclicals rebounded sharply on hopes for a trade war truce and new global monetary accommodation
- Stock selection was the primary detractor from relative performance, with selection in the Information Technology, Consumer Discretionary and Financials sector hurting most due primarily to positions in SAP, Ctrip.com and HDFC Bank
- Sector selection in the Health Care and Materials sectors contributed positively to relative performance due to positions in M3, Shandong Weigao, and Asian Paints
- New positions in Japanese health care product company Sysmex and Chinese K-12 after school tutoring provider TAL Education were initiated, while positions in Ctrip.com, Novozymes and New Oriental Education were sold
- The portfolio’s position in Linde was trimmed on valuation, while the positions in adidas and MercadoLibre were added to on weakness
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.
SGA earnings growth forecasts are based upon portfolio companies’ non-GAAP operating earnings. 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, 1.0%, 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 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 International portfolio for the past twelve months. Past performance is not indicative of future results.