3Q2022 – Focus Growth Commentary

We feel very good about the ability of our companies to grow even if we face a recession

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  • Multi-decade high inflation and quickly rising interest rates have caused sharp, broad-based declines in equity prices this year, but among the hardest-hit stock prices have been some of the highest-quality growth companies, in our view.
  • The Polen Focus Growth Composite Portfolio (the “Portfolio”) trailed the Russell 1000 Growth (the “Index”) and the S&P 500 Index in the third quarter.
  • Our top five absolute performers this quarter were Netflix, PayPal, Amazon, Airbnb, and Autodesk. The top five largest absolute detractors were Adobe, Alphabet, Meta Platforms, ServiceNow, and MasterCard.
  • It appears that characteristics we look for, including balance sheet strength, competitive advantage, and growth are less important to market participants who are preoccupied with the short term than factors that we believe are far less indicative of a business’s viability and sustainability.
  • We recognize that this period looks off-balance for our Portfolio, but as we continue to analyze our holdings, we do not expect a significant change in the competitive advantages or long-term earnings growth profiles for the companies we continue to own.

Read the full commentary & disclosures here →