3Q2019 – Global Growth Commentary

Earnings growth has been under pressure worldwide this year, but the Portfolio was able to provide positive results in the third quarter

  • During the third quarter of 2019, the Polen Global Growth Composite Portfolio (the “Portfolio”) returned 0.12% gross of fees versus -0.03% for the MSCI All Country World Index (the “Index”), outperforming the benchmark by 15 basis points during the quarter.
  • Since inception on January 1, 2015, the Portfolio has delivered an annualized investment return of 14.25% gross of fees compared to a 6.93% annualized return from the Index. Thus, the Portfolio has on average outperformed the Index by 732 basis points per year since inception. The Portfolio’s cumulative return since inception is 88.19% gross of fees compared to 37.44% for the Index.
  • From a sector perspective, our outperformance within the consumer discretionary sector was the most significant driver of performance. While our higher exposure to the information technology sector was also a positive, we underperformed within the sector during the quarter as two holdings, Adobe and SAP, gave a little back following strong share price performance earlier in the year. Geographically, there was not much to report as our regional exposures did not meaningfully impact our returns this quarter.
  • Earnings growth has been under pressure worldwide this year. Our Portfolio, however, continues to deliver double-digit earnings per share growth, with overall earnings growth accelerating slightly in the most recently reported quarter. We believe this strong underlying earnings growth continues to underpin our Portfolio’s solid absolute and relative returns year to date.
  • We purchased Abbott and sold SGS during the quarter. While purchase and sell decisions are not always directly related, we did actively compare the two in this instance as both companies play more of a “safety” role within the Portfolio. The desire for “safeties” stems from the concept of investing across the growth spectrum, which we use for all of our Large Company Growth strategies and have employed for decades. We feel this balanced approach is one of the reasons we have captured less of the downside over the years.

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