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- In the second quarter of 2021, the Polen U.S. SMID Company Growth Composite Portfolio (the “Portfolio”) returned 12.02% gross of fees versus 6.04% for the Russell 2500 Growth Index (the “Index”).
- Stock selection, sector allocation, and style all contributed to performance during the second quarter, with individual stock selection having the largest impact.
- On a sector basis, industrials, financials, and consumer discretionary had the largest relative impact during the quarter. There were no sectors that significantly detracted from performance.
- We initiated positions in Trupanion and Farfetch, which were funded by the sale of Envestnet and Euronet Worldwide. We added to Etsy and The Trade Desk and trimmed Generac.
- 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 small and mid-cap companies and our pipeline for finding Polen-caliber businesses.
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