- The portfolio generated attractive absolute and relative returns in Q2 amid rising uncertainty over the future pace of global growth, but more dovish comments by the Fed
- Stock selection was the primary driver of the portfolio’s outperformance; sector allocations also contributed positively to results
- Selection in the Communication Services and Materials sectors was strongest while selection in the Health Care and Consumer Discretionary sectors was weakest
- The portfolio’s remaining position in Ulta Beauty was liquidated following a strong rise in its stock price and a new position in Danaher was initiated
- Positions in Disney, Ecolab, Equinix, Estee Lauder, and FleetCor were trimmed on strength and we added to positions in Alphabet, Intuit, Salesforce.com, TJX Companies and UnitedHealth on weakness; positions in Regeneron and Lowe’s were reduced reflecting rising
- We are pleased to announce that Jon Richter has joined our research team, and that Kishore Rao will join our U.S. equity portfolio management team effective December 31st 2019 given the strong contributions he has made in research and portfolio management since joining SGA in 2004 and co-managing our Emerging Market Growth portfolio since its inception in 2014
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.