3Q2018 – U.S. Small Company Growth Commentary

  • During the third quarter of 2018, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned 9.42% gross of fees. The Russell 2000 Growth Index (the “Index”) returned 5.53%. For the trailing one year, the Portfolio has returned 25.99% gross of fees versus 21.08% for the Index.
  • Conviction in our Portfolio holdings remains strong and the businesses are doing very well in our view. In the latest fully reported twelve-month period, sales have grown over 18% with margin expansion driving even better pretax income growth of 24%. Return on invested capital also remains well above average at 20%, and balance sheets remain healthy with under 19% total debt/total capital, all on a weighted average basis for the portfolio. These are few of the key indicators that we look at to monitor the health of our companies and stay on top of changing trends. In our opinion, our companies remain fundamentally healthy and well positioned to sustain strong business performance in the future.

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