ICLR - Polen International Growth Portfolio Q2 2025 Commentary
2025-07-21 08:01:00 ET
Summary
- 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, but most companies adapted 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 (the “Index”), as the International Growth Composite Portfolio (the “Portfolio”) underperformed for the quarter. While we are encouraged that the Portfolio’s 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—particularly our Index— surge ahead.
- The top three contributors to relative and absolute performance in the quarter were MercadoLibre ( MELI ), Tokyo Electron ( TOELY )( TOELF ), and SAP ( SAP )( SAPGF ). The top relative and absolute detractors were Aon ( AON ), Globant ( GLOB ), and ICON plc ( ICLR ).
- We made select adjustments to the Portfolio during the quarter to optimize exposures and better position ourselves for future growth. We initiated new positions in ICICI Bank ( IBN ), InPost ( INPOY )( INPOF ), and MakeMyTrip ( MMYT ), and added to four existing positions. We eliminated our positions in Tencent Music Entertainment ( TCMEF )( TME ), Bunzl plc ( BZLFF )( BZLFY ), Evolution ( EVVTY ), Experian ( EXPGF )( EXPGY ), and Novo Nordisk ( NVO )( NONOF ), and trimmed four positions.