2Q2025 - Global Growth Commentary
While the equity market rebound in Q2 was impressive, we think it may be premature to signal the all-clear for financial markets given potential tariff impacts and other geopolitical uncertainties. That said, we believe the effect on our portfolio companies should be manageable.
- During the quarter, dissipating tariff concerns sparked a concentrated recovery rally led by AI-related and cyclical sectors, notably semiconductors and European banks. Despite the rally, the market environment—defined by narrow leadership and strong cyclicality—posed challenges for the Portfolio, which is constructed around high-quality secular growth and typically avoids highly cyclical businesses.
- Top relative performance contributors included Oracle, Apple (not owned), and Shopify. Top absolute contributors were Oracle, Microsoft, and Shopify.
- The greatest relative detractors were NVIDIA (not owned), Aon, and Globant. The greatest absolute detractors were Aon, Globant, and Thermo Fisher Scientific.
- We initiated new positions in Starbucks and IDEXX Laboratories and added to existing positions in Shopify, Adyen, Zoetis, and Oracle. We eliminated our Globant position and trimmed existing positions in Microsoft, Workday, Sage Group, Siemens Healthineers, Accenture, ADP, Visa, Mastercard, and Alphabet.