3Q2019 – Focus Growth Commentary

The third quarter was marked by substantial volatility especially around factor rotations, yet the Portfolio was able to deliver positive results

  • During the third quarter of 2019, the Polen Focus Growth Composite Portfolio (the “Portfolio”) returned 0.92% gross of fees compared to 1.48% for the Russell 1000 Growth Index and 1.70% for the S&P 500. Over the trailing 12 months, the Portfolio has returned 9.71% versus 3.71% for the Russell 1000 Growth and 4.25% for the S&P 500.
  •  Despite the modest gains made by our Portfolio and the benchmarks, the quarter was marked by substantial volatility especially around “factor rotations.”
  • In July and August, high quality factors continued to perform well; but in September, a marked shift toward lower quality factors such as financial leverage (debt) were in demand. As a result of this factor rotation, our Portfolio underperformed in the month of September because it is heavily biased toward quality.
  • Our top performers this quarter were Alphabet, Dollar General and Zoetis. Our largest detractors were Align Technology, Facebook and Gartner.
  • After somewhat elevated trading activity in the second quarter, we had minimal trading activity in the third quarter. We initiated a new position in MSCI Inc. during the third quarter.

Read the full commentary here →