1Q2025 - International Growth Commentary
As historical trends show U.S. outperformance often reverses amid economic volatility, it seems the sun is rising on international equities after 15 years of U.S. equity leadership and dollar strength.
- Following a solid start to the quarter, our performance fell as heightened volatility, declines in select technology and healthcare holdings, and an underweight to developed market banks hampered results.
- The first quarter's top three contributors to relative performance were Aon, TSMC (not owned), and SAP. The top absolute contributors included Aon, SAP, and MercadoLibre.
- The greatest relative detractors were Globant, ICON, and Novo Nordisk, while the top absolute detractors were Globant, Novo Nordisk, and ICON.
- During the quarter, we initiated three new positions in Adyen, Lonza Group, and Tencent Music Entertainment, and added to several existing holdings. We eliminated our position in Unilever and trimmed other positions.
- Rapid changes to the economic landscape are underway, and we believe current volatility could present significant opportunities for long-term investors.
- Despite recent market challenges, we remain confident that our emphasis on high-quality, high-growth international businesses positions the Portfolio for long-term outperformance, particularly as shifting trends may favor non-U.S. equities.