1Q2021 – U.S. Small Company Growth Commentary

Short-term rotations have no bearing on how we invest. We believe long-term returns will ultimately reflect the long-term growth of cash flow and earnings of our companies.

  • The Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) return for the quarter was positive, up 0.99% gross of fees. This trailed the Russell 2000 Growth Index (the “Index”) return of 4.87% primarily due to pronounced style headwinds.
  • As the markets seemed to anticipate an increase in economic activity from vaccines and stimulus, sectors that are typically expected to see the largest short-term benefits outperformed.
  • Healthcare and consumer discretionary contributed positively to returns. Contribution from information technology and industrials to the Portfolio’s performance was negative.
  • Relative performance was primarily linked to relative weight and style shifts. No company-specific issue seemed to drive the detraction.
  • During the quarter, we initiated positions in Duck Creek Technologies and Progyny. We exited our positions in WD-40 Company and LendingTree.
  • Short-term fluctuations in investor preferences may, at times, be a headwind for our specific style of investing, but we believe that long-term returns will ultimately reflect the long-term growth of cash flow and earnings of the Portfolio companies.

Read the full commentary here →