- The portfolio generated strong absolute returns trailing the Russell 1000 Growth Index and outperforming the S&P 500 Index as markets continued their rebound led by e-commerce, technology and more economically sensitive companies
- Relative portfolio performance was negatively impacted primarily by stock selection, but also residual sector allocations during the quarter
- Stock selection in the Information Technology and Consumer Discretionary sectors accounted for the vast majority of relative underperformance due largely to stocks not owned; in contrast selection in the Health Care sector contributed to returns
- A new position in Thermo Fisher was initiated while the portfolio’s position in Adobe was liquidated due to valuation considerations
- The portfolio is expected to generate revenue and earnings growth higher than that of the Russell 1000 Growth Index benchmark over the coming three years with greater predictability and sustainability
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.