- The Polen Global Emerging Markets Growth Composite Portfolio (the “Portfolio”) was largely flat for the quarter, returning 0.17% gross of fees. This trailed the MSCI Emerging Markets Index (the “Index”) return of 2.29%.
- Relative underperformance was primarily due to negative allocation effects and style headwinds. However, some of this was offset by positive stock selection.
- The market seemed to favor the types of companies we do not own, specifically those that are highly leveraged and unprofitable. That said, we are confident in the underlying fundamentals of the Portfolio’s holdings and expect they will deliver attractive returns over time.
- During the quarter, we trimmed some of our strongest performers and added to areas of the Portfolio where we saw share price dislocation.
- We anticipate that the emerging market recovery will be subdued in the near term, as progress in the fight against COVID-19 and vaccination will vary among emerging market countries and regions. However, we remain optimistic about the long-term opportunities for emerging markets investing.
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