- During the first quarter of 2020, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned -20.74% gross of fees and -20.91% net of fees versus a return of -25.77% for the Russell 2000 Growth Index (the “Index”). The Portfolio outperformed the Index by a 5.03% margin gross of fees.
- Absolute and relative returns in the first quarter were primarily driven by the reaction and perceived impact of the COVID-19 pandemic on sectors, industries, and companies. For our strategy, virtually all our holdings declined, along with most of the market. However, relative to the benchmark, strong stock selection partially offset less favorable sector allocation. Some of our most resilient businesses and our overweight to the information technology sector, an area that investors perceive to be less disrupted from COVID-19, helped to drive relative outperformance.
- March 9, 2020 marked the three-year anniversary of the Polen U.S. Small Company Growth strategy. Since inception, the Portfolio has generated 579 and 480 basis points gross and net fee of fees, respectively, of outperformance per year on average versus the Index.
- No matter what path the COVID-19 fallout and market take from here, we remain steadfast in our focus on owning only high-quality companies that we believe are well positioned to deliver sustainable growth with persistently high returns on capital for many years.
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