- Regulatory uncertainty in China and a slowdown in economic activity weighed on markets in Q3.
- The portfolio outperformed its MSCI All Country World ex USA Index benchmark with stock selection the primary contributor to relative returns.
- New positions were initiated in Brazilian brokerage platform XP, restaurant operator Yum China, and contract research organization leader ICON. The portfolio’s positions in New Oriental Education, Alibaba, Tencent, and IHS Markit were liquidated.
- The portfolio remains well-positioned to deliver attractive growth over our longer-term 3-5 year investment horizon with strong quality characteristics and a cash-flow based valuation discipline.
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.