1Q2020 – Focus Growth Commentary

We prefer to have an allocation to “safety” businesses that we believe will be significantly less impacted during periods of economic stress. These companies often provide ballast during market drawdowns.

  • During the first quarter of 2020, the Polen Focus Growth Composite Portfolio (the “Portfolio”) returned -13.03% gross of fees compared to -14.10% for the Russell 1000 Growth Index and -19.60% for the S&P 500.
  • The COVID-19 pandemic has become a global health crisis that has abruptly and deeply affected the global economy. The equity market’s reaction was equally abrupt and deep as this crisis has led to a near stoppage of the global economy in a way that most of us have not seen in our lifetimes.
  • The Focus Growth strategy has been battle-tested through many crises over the past 31 years. In our experience, crises that “shock the system” will occur at various points in time for different, usually unpredictable reason.
  • We seek to strictly invest in the highest quality companies that are positioned to not only withstand these shocks but also continue investing for longterm growth to further strengthen their competitive advantages.
  • In the first quarter, we had higher than normal trading activity as we used the quick, sharp drawdown to upgrade the quality and growth potential of the Portfolio. Most notably, we exited our positions in Nestle, Booking Holdings, and O’Reilly Automotive while increasing our weightings in Abbott Laboratories and Facebook. We also added a new position in Autodesk.

Read the full commentary here →