Commentary
3Q2024 - Focus Growth Commentary
We were gratified to see the Portfolio outperform the Russell 1000 Growth Index amid two notable peak-to-trough drawdowns this quarter—and, in fact, outperform in 20 of the Index's 23 down days.
- Volatility re-emerged in the third quarter. The initial catalyst was a better-than-expected Consumer Price Index report (indicating lower inflation) on July 11, boosting the market confidence of the U.S. Federal Reserve, likely embarking on a cutting cycle sooner than later.
- Excitement from this market spurred a rotation out of large technology and "AI winners" into other market segments, many of which lagged in the year's first half.
- The Portfolio slightly outperformed the Russell 1000 Growth Index, with both delivering just over a 3% return, while the S&P 500 ended the quarter approaching 6%. Through the first three quarters of 2024, the Portfolio's performance has increased over 11%, putting it well on track to achieve our goal of mid-teens annualized returns in 2024.
- The quarter’s top relative contributors to Portfolio performance were NVIDIA, which we did not own, Shopify, and ServiceNow. The top absolute contributors were Oracle, ServiceNow, and Shopify.
- The largest relative detractors in the quarter were Apple, Airbnb, and Tesla (not owned). The largest absolute detractors were Alphabet, Airbnb, and Amazon.
- We purchased new positions in Apple and Oracle and eliminated small positions in Nike and Salesforce. We also added to positions in Adobe, Workday, Shopify, MSCI, and Paycom Software and trimmed positions in Amazon, Alphabet, and Microsoft.