- As volatility increased, SGA’s U.S. Large Cap Growth portfolio returned -11.3% (gross) and -11.5% (net) in Q4 2018 compared to -15.9% for its primary benchmark the Russell 1000 Growth Index, and -13.5% for the broad market S&P 500 Index
- Concern over rising interest rates, escalating trade tensions and slowing global economic growth led to a rise in market volatility; U.S. GDP growth remained solid, but slowed from the strong pace of Q2
- Larger-cap, value and lower beta companies performed best; the return to business quality was mixed, but generally supportive
- More defensive sectors including Real Estate and Consumer Staples as well as Financials performed best while Energy declined by almost 30% and Technology and Communication Services declined by -19% and -17% respectively
- Stock selection and sector allocations contributed positively to relative performance; positions in J.B. Hunt, Red Hat and Schlumberger were liquidated and new positions in Facebook and Intuit were initiated
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.