- During the fourth quarter of 2018, the Polen Focus Growth Composite (the “Portfolio”) returned -12.59%. The Russell 1000 Growth and the S&P 500 returned -15.89% and -13.52%, respectively. For the full year 2018, the Portfolio returned +8.98%, while the returns for the Russell 1000 Growth and S&P 500 were negative at -1.51% and -4.39%, respectively.
- The Consumer Staples, Real Estate and Utilities sectors held up best in the quarter, while the Energy, Technology and Communications Services sectors declined the most in the
quarter. Our Portfolio outperformed mostly due to stock selection for the quarter and full year, which is typical.
- After three quarters of very strong returns to start 2018, there was a heavy reversal in the equity markets in the fourth quarter, seemingly driven by a combination of factors. We believe equity market participants, especially in the U.S., had become complacent after roughly a decade of positive returns that have far outstripped the underlying earnings growth of corporate America. Additionally, concerns about slowing GDP, slowing
earnings growth, trade wars and a U.S. government shutdown seemed to influence some de-risking behavior. We also believe passive and trend-following strategies amplified the negative price performance of equities in the fourth quarter.
- Our low debt, high return on equity Portfolio provided downside protection during the fourth quarter and a strong positive return for the year. This aligns well with our firm’s mission to preserve and grow client assets to protect their present and enable their future.
Read the full article here.