4Q2020 – Global Emerging Markets Growth Commentary

We are extremely pleased with the underlying business performance of our Portfolio companies in 2020, and we feel increasingly positive about their 2021 outlook.

  • The Polen Global Emerging Markets Growth Composite Portfolio (the “Portfolio”) returned 12.67%, gross of fees, for the fourth quarter. The MSCI Emerging Markets Index (the “Index”) rallied 19.70% in the fourth quarter as abundant liquidity and hopes for a globally synchronized, vaccine-led economic recovery helped push markets higher.
  • For the full year 2020, the Portfolio returned 16.05%, gross of fees, compared to 18.25% for the Index.
  • The coronavirus delivered a blow to emerging markets in 2020, with GDP declining for the first time in decades. Encouragingly, however, data indicates the outlook is rapidly improving. The IMF expects a strong cyclical recovery in 2021, with developing world GDP set to advance by 6.6%, more than making up for losses of 2020.
  • Despite the severe headwind the pandemic has brought to emerging markets, we believe the foundations for a strong decade ahead remain intact.
  • From a Portfolio perspective, we estimate that our holdings were able to grow their earnings by approximately 11% on a weighted average basis in 2020. As the anticipated recovery kicks in, we forecast Portfolio earnings growth could accelerate to 39% in 2021. This would mean that our Portfolio could potentially grow its aggregate earnings by over 50% over a two-year period.

Read the full commentary here →