- The portfolio protected capital amid trade and macro-economic driven weakness in late July and August, but trailed its benchmark in September as cyclicals rebounded sharply on hopes for a trade war truce and new monetary accommodation
- Stock selection was the primary detractor from relative performance, with selection in the Information Technology sector detracting most due to weakness in Autodesk and PayPal. Stock selection in the Consumer Discretionary sector was the largest positive contributor to returns given strength in Nike, TJX Companies and Lowe’s
- New positions in IHS Markit, Illumina and Workday were initiated at below average weights while the remainder of our position in Walt Disney was sold
- Positions in Estee Lauder, Equinix, FleetCor, Intuit, TJX Companies, Visa, and Yum! Brands were trimmed on strength. Positions in Amazon, Autodesk, Nike, Salesforce.com, and UnitedHealth 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.
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, 0.75%, employing the U.S. Large 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 performance record presented for periods prior to July 1, 2003 occurred before to the inception of SGA and represents the portable performance record established by two of SGA’s founders (and investment committee members) Gordon Marchand and George Fraise while affiliated with a prior firm. 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 U.S. Large Cap Growth portfolio for the past year. SGA’s earnings growth forecast data is based upon portfolio companies’ non-GAAP operating earnings.