Commentary
3Q2024 - Global SMID Company Growth Commentary
In an environment like this, with several uncertainties, we remain focused on our Portfolio companies' long-term value propositions, competitive advantages, growth opportunities, and potential earnings power.
Read the full commentary & disclosures
- Global small and mid cap equities rose over the quarter despite shifting sentiments surrounding inflation, interest rates, and the economic outlook. Beyond shifting economic expectations, uncertainty surrounding national elections weighed on equity markets.
- Our quality growth-oriented Portfolio has not been immune to recent volatility; while some holdings benefited, most were adversely affected. For the third quarter, the Polen Global SIMD Company Growth Composite Portfolio (the “Portfolio”) underperformed the MSCI ACWI SMID Cap Index (the “Index”).
- Despite the weight of a weak SMID cap market and the underperformance of many of our holdings where the fundamentals remain healthy, we believe there is meaningful latent growth and appreciation potential in the Portfolio.
- The top contributors to the Portfolio's relative performance over the third quarter were Goosehead Insurance, Revolve Group, and Clearwater Analytics. On an absolute return basis, Goosehead Insurance, Revolve Group, and E Ink were the top contributors.
- The most significant detractors from relative and absolute performance were Progyny, Tencent Music Entertainment, and Fevertree Drinks.
- We initiated two new positions and sold out of one holding. We also adjusted existing positions, including trimming holdings to raise capital for new investments. We added to existing positions in Bio-Techne and Clearwater Analytics—both cases where we believe the market underappreciates the quality of the businesses.