3Q2021 – Focus Growth Commentary

We think the best way to offset valuation compression is through investing in companies that can contribute continuous and robust earnings growth to the Portfolio.

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  • During the third quarter of 2021, the Polen Focus Growth Composite Portfolio (the “Portfolio”) returned 2.78% gross of fees versus 1.16% for the Russell 1000 Growth Index (the “Index”) and 0.59% for the S&P 500.
  • Year to date, the Portfolio returned 18.51% gross of fees versus 14.30% for the Index and 15.93% for the S&P 500.
  • We continue to see broad-based strength in the revenue and earnings growth of the companies we own in the Focus Growth Portfolio.
  • The businesses in the Portfolio that were negatively impacted by the direct effects of COVID-19 (such as various quarantines in 2020) have seen resurgences in revenue and earnings growth, while those that benefited in specific ways have continued to experience robust demand.
  • We currently do not expect inflationary pressures, should they persist, to have a meaningful impact on our holdings, mainly due to their general ability to pass on higher costs to customers in the form of price increases.
  • Still, if interest rates continue to rise from historically low levels, valuation compression could become a headwind to Portfolio returns in the coming years.
  • In the third quarter, we acquired Airbnb, added to Autodesk, Amazon, and Mastercard, and trimmed our positions in Adobe, Microsoft, Zoetis, Accenture, Starbucks, and ServiceNow.

Read the full commentary & disclosures here →