Polen Global Growth Portfolio Q1 2025 Commentary

2025-04-23 08:40:00 ET

Summary

• Global equity markets started 2025 solidly after a two-year AI rally, but sentiment turned abruptly with new U.S. tariffs announced in February.
• In the first quarter of 2025, the Polen Global Growth Portfolio returned -5.2% gross of fees (-5.5% net of fees).
• We believe Global Growth is well-positioned to deliver long-term, mid-teens-or-better earnings growth that will drive our long-term investment returns.

Summary

• Global equity markets started 2025 solidly after a two-year AI rally, but sentiment turned abruptly with new U.S. tariffs announced in February. Volatility spiked, the “Magnificent 7” fell 15%, and semiconductors dropped 19%. U.S. stocks lagged, with international equities outperforming by nearly 10% amid a weakening dollar—all before a more considerable tariff shock just after the quarter’s close.
• In the first quarter of 2025, the Polen Global Growth Composite Portfolio (the “Portfolio”) returned -5.2%. This compares to -1.3% for the MSCI ACWI Index (the “Index”) and -6.8% for the MSCI ACWI Growth.
• Top relative contributors to the Portfolio’s performance included Abbott Laboratories, NVIDIA (not owned), and Aon. The top absolute contributors were Abbott Laboratories, Aon, and SAP. The largest relative detractors in the quarter were Globant, Amazon, and Novo Nordisk. The largest absolute detractors were Globant, Amazon, and Alphabet. Our trading activity increased this quarter. We trimmed positions for valuation reasons, added reasonably valued safety holdings, took advantage of market volatility to increase existing positions, and initiated positions in a few higher-growth businesses that recently became attractively valued.
• While we did not eliminate any positions, we trimmed multiple positions.
• Despite recent market volatility and shifting narratives, we remain optimistic about our long-term positioning because we focus on owning high-quality, competitively advantaged businesses with durable growth prospects. We believe this approach provides resilience through changing market cycles and positions the portfolio to capitalize on opportunities as they arise, supporting sustained value creation and compounding of earnings over time.

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