2Q2019 – U.S. Small Company Growth Commentary

  • During Q2 2019, the Polen U.S. Small Company Growth Composite Portfolio (the ”Portfolio”) returned 6.56% gross of fees. This compared to a return of 2.75% for the Russell 2000 Growth Index (the “Index”) in the same period. For the trailing 12-month period, the Portfolio returned 12.85% gross of fees compared to -0.47% for the Index.
  •  In the second quarter of 2019, global markets continued higher after the strong rebound in the first quarter with periods of volatility tied to headlines about trade and more accommodating monetary policy from central banks. Two macro factors that many of our portfolio companies are dealing with are wage inflation for service-related jobs and tariffs,
    and we believe our companies are managing these risks well.
  •  Performance this quarter was driven entirely by stock selection, especially in the technology and healthcare sectors and by some of our largest holdings including Globant, Fox Factory, and Pool Corporation. Gains were partially offset by weakness in a single stock, Stamps.com.
  • Our companies continue to perform well, exhibiting above-average growth rates, high returns on invested capital, and low levels of financial leverage.

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