1Q2023 – International Small Company Growth Commentary

In a macro-driven environment, we maintain focus on competitively advantaged, financially flexible businesses

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  • In the first quarter, Polen International Small Company Growth Composite Portfolio (the “Portfolio”) returned 2.61% gross and 2.24% net of fees, respectively, compared to the 4.70% return of the MSCI ACWI ex-US Small Cap Index (the “Index”).
  • The start of 2023 has proven no less volatile than the unprecedented, macro-driven environment we experienced in 2022. Markets initially embraced the growing possibility of a soft landing before stronger-than-expected economic data prompted concerns the Fed would continue to raise rates. Then, the collapse of Silicon Valley Bank and ensuing concerns over potential contagion introduced a new reality for the markets to contend with.
  • The top contributors to the Portfolio’s relative performance in the first quarter included FevertreeDrinks, CompuGroupMedical, and Kinaxis. These were also the to contributors on an absolute basis. By contrast, the most significant detractors from the Portfolio’s relative performance included Kin + Carta, MyTheresa, and Endava. On an absolute basis, the largest detractors were the same.
  • We initiated one new position in what we believe to be a high-quality business, funded by two eliminated positions and some trims to existing holdings.
  • While we can’t predict when markets will recover, we believe that maintaining our focus on what we believe are high-quality growth companies that are well positioned to drive cash flow and earnings growth over the next five years will generate robust long-term performance.

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