- Portfolio underperformed the Russell 1000 Growth Index as more value-oriented stocks and companies with lower quality characteristics outperformed
- Portfolio outperformed during periods of weakness in Q1 but underperformed in the second half of March as higher beta and large benchmark weight companies not owned rebounded
- Positions in American Express, Regeneron and FleetCor contributed most to performance in Q1; we trimmed American Express and Regeneron on strength while adding to FleetCor
- Positions in Meta Platforms, PayPal and Netflix detracted most in the quarter; we sold Meta given a more attractive opportunity created in Ecolab
- Took advantage of market volatility to upgrade portfolio growth liquidating a position in Linde on strength in favor of a new position in Sherwin-Williams
- Portfolio forecast to grow earnings 18% over the next 3 years, higher than expectations for the Russell 1000 Growth Index with better valuation, higher business quality 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, 0.75%, 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. The largest contributors and detractors are determined using a ranking of the absolute contribution to portfolio return by each security held over the period under consideration. 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 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.