2Q2025 - International Growth Commentary
The second quarter was marked by volatile market conditions, including ongoing trade tensions and heightened policy uncertainty, especially regarding U.S.-China relations. Rapidly evolving trade announcements created challenges, with many companies adapting effectively to the shifting tariff landscape.
- The U.S. dollar started the year at historical highs, contributing to prolonged U.S. equity outperformance versus international markets. However, after 15 years of dollar and U.S. equity leadership, we see signs that international equities may be poised for improved performance as market dynamics shift.
- Our concentrated approach to quality growth investing failed to keep pace with the MSCI ACWI ex US Index. While we are encouraged that our year-to-date returns tracked roughly in line with our earnings growth estimates, we recognize that our performance may appear out of step when markets—notably our Index—surge ahead.
- The top relative and absolute contributors were MercadoLibre, Tokyo Electron, and SAP. The top relative and absolute detractors were Aon, Globant, and ICON plc.
- We made select adjustments during the quarter to optimize exposures and better position the Portfolio for future growth. We initiated new positions in ICICI Bank, InPost, MakeMyTrip, and Sea Ltd., and added to four positions.
- We eliminated positions in Tencent Music Entertainment, Bunzl plc, Evolution, Experian, and Novo Nordisk, and trimmed four positions.