3Q2020 – Global Growth Commentary

We concentrate the Portfolio in the quality growth businesses where we believe the fundamentals best support value.

  • During the third quarter of 2020 and year to date, the Polen Global Growth Composite Portfolio (the “Portfolio”) returned 9.09% and 14.86% gross of fees, respectively, outperforming the MSCI ACWI (the “Index”) returns of 8.14% and 1.38% during those same periods.
  • Since inception on January 1, 2015, the Portfolio has delivered an annualized investment result of 16.49% gross of fees compared to a 7.52% annualized return from the Index. Thus, the Portfolio has outperformed the Index by approximately 900 basis points per year on average. Cumulative returns since inception are 140.49% for the Portfolio gross of fees vs. 51.81% for the Index.
  • After the dramatic first quarter market decline and the strong second quarter recovery, global equities have continued to rise during the third quarter. Notably, not all companies, sectors, and geographies have recovered equally.
  • There have been disproportionate winners and losers this year with a relatively narrow group of companies driving market performance. Fortunately, we own our fair share of strong performers and have concentrated our investments where we see value.
  • The strong ongoing earnings per share growth and larger weightings in our information technology and communication services businesses have largely offset the earnings headwinds from our highly discretionary businesses this year. We expect the Portfolio’s overall earnings to be roughly flat in 2020. This is an outcome that we believe will prove much more resilient than the Index, where earnings are expected to decline nearly 20%.

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