4Q2022 – Focus Growth Commentary

We expect the Portfolio’s earnings growth to accelerate on a weighted average basis in 2023, even if there is a recession

Read the full commentary here →

  • Market performance throughout the quarter and the year has been largely driven by inflation and the Fed’s hawkish response of rapidly raising interest rates as well as expectations of a recession in 2023.
  • For the Focus Growth Composite Portfolio (the “Portfolio”), temporarily slower growth for several of our holdings and valuation compression created double-barreled performance headwinds in the fourth quarter 2022 and the full year.
  • The top absolute contributors for the quarter were Netflix, Adobe, and Mastercard, and the top absolute detractors were Meta Platforms, Amazon, and PayPal. For the full year 2022, UnitedHealth Group was the sole contributor on an absolute basis, while Amazon was a leading detractor.
  • On a relative basis, the top contributors for the quarter were Netflix, Adobe, and Nike while Meta Platforms, Amazon, and PayPal were the leading detractors. For the full year, Netflix was the leading contributor while Meta was the primary detractor.
  • During the quarter, we sold Meta and initiated a new position in Thermo Fisher Scientific.
  • As we look forward to 2023, though, we are optimistic about the businesses in the Portfolio despite the consensus view that the U.S. economy is likely to enter a recession in the near term.
  • We expect the earnings growth of highly competitively advantaged, secular growth businesses will remain the key driver of our returns in the long run.

Read the full commentary & disclosures here →