1Q2018 – Global Growth Commentary

  • During the the first quarter of 2018, the Polen Global Growth Composite Portfolio (the “Portfolio”) returned +3.24% gross versus -0.96% for the MSCI All-Country World Index (the “Index”), outperforming the benchmark by 420 basis points during the quarter.
  •  Since inception on January 1, 2015, the Portfolio has delivered an annualized investment return of 13.88% compared to 8.23% annualized return from the Index. Thus, the Portfolio has on average outperformed the Index by 565 basis points per year since inception.
  • Global markets started the year off strong, but volatility spiked in February and remained elevated through the close of the quarter. While the uncertainties created by trade spats and evolving monetary policy around the world are likely to result in more volatility going forward, we take some solace in the fact that underlying earnings growth remains robust.
  •  It is difficult to precisely determine how much of the recent improvement in corporate earnings growth is due to lower U.S. tax rates given that the impact is so varied for different businesses, but broad-based earnings growth remained strong even without this benefit. Our Portfolio’s earnings per share growth has been well above our longterm, mid-teens target recently.
  •  Our greater exposure to technology, consumer discretionary and healthcare, as well as our outperformance within each of those sectors, contributed the most to our positive returns
    during the first quarter. We also benefited from our lack of exposure to the more cyclical sectors—energy, materials, real estate and telecom—which all trailed the Index.

Read the full article here.