4Q2019 – Global Growth Commentary

In the fourth quarter, markets were strong with stock selections driving the majority of returns.

  • During the fourth quarter and full year of 2019, the Polen Global Growth Composite Portfolio (the “Portfolio”) returned 11.27% and 37.37%, respectively, outperforming the MSCI All-Country World Index (the “Index”) returns of 8.95% and 26.60% during those same periods.
  • Since inception on January 1, 2015, the Portfolio has delivered an annualized return of 15.93% compared to a 8.41% annualized return for the Index. Thus, the Portfolio has outperformed the Index by more than 752 basis points per year on average. On a cumulative basis since inception, the Portfolio returned 109.39% versus 49.75% for the Index.
  • Markets were robust across the board in 2019, and we saw broad-based strength across the Portfolio as well. Stock selection was the largest driver of returns for the year and has been the predominant driver of performance since inception. From a geographic perspective, stock selection has accounted for almost all excess returns since inception.
  • For the full year, a mix of allocation and selection effect drove excess returns. Our overweight to information technology and outperformance in consumer discretionary and healthcare contributed the most to returns. Similarly, since inception, our overweight and outperformance within information technology, consumer discretionary, health care, and communication services has driven overall outperformance.
  • Currency has had minimal impact on our returns since the Portfolio’s inception. We believe this is due to our bias towards globally dominant, globally scaled businesses. These businesses typically generate revenue in U.S. dollars or a broad basket of currencies and, therefore, have their own natural and financial currency hedges. While we look for the best businesses wherever they may reside, we also maintain geographic diversity based on underlying revenues and earnings.

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