2Q2021 – U.S. Small Company Growth Commentary

We focus on companies with strong balance sheets that we believe can fund their own growth in any environment.

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  • In the second quarter of 2021, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned 13.47% gross of fees versus 3.91% for the Russell 2000 Growth Index (the “Index”).
  • Individual stock selection significantly contributed to absolute and relative performance during the second quarter, driving more than 80% of the outperformance.
  • On a relative basis, consumer discretionary and financials had the most meaningful impacts during the quarter. There were no sectors that meaningfully detracted from performance.
  • We initiated a new position in Trupanion and added to Duck Creek Technologies, Simulations Plus, AppFolio, and Goosehead Insurance. We sold our remaining positions in Trex and Floor & Décor and trimmed Etsy, Revolve Group, and Euronet Worldwide.
  • Despite concerns about inflation and the potential for rising interest rates, we believe that our companies are still fundamentally undervalued given their growth potential. In our opinion, their strong brands, low cost-to-value, highly scalable cost structures, and ability to self-fund growth offer durability against periods of greater macroeconomic headwinds.
  • Looking ahead, we are more excited than ever about the prospects for smaller companies and our pipeline for finding Polen-caliber businesses.

Read the full commentary & disclosures here →