Polen Global Growth Portfolio Q2 2025 Commentary

2025-07-21 22:10:00 ET

Summary

• The market began 2025 with optimism for the new U.S. administration’s pro-growth agenda, overlooking potential risks related to tariffs and valuation. International stocks outperformed U.S. stocks for the first time since 2009, mainly driven by cyclicals and a weaker U.S. dollar, though global equities faced volatility due to geopolitical tensions and uncertainty.
• In the second quarter, dissipating tariff concerns sparked a concentrated recovery rally led by AI-related and cyclical sectors, notably semiconductors and European banks. Despite the rally, the market environment—defined by narrow leadership and strong cyclicality—posed challenges for the Global Growth Composite Portfolio (the “Portfolio”), which is constructed around high-quality secular growth and typically avoids highly cyclical businesses. The Portfolio underperformed the MSCI ACWI Index (the “Index”) for the quarter.
• Top relative performance contributors included Oracle ( ORCL ), Apple ( AAPL ) (not owned), and Shopify ( SHOP ). Top absolute contributors were Oracle, Microsoft ( MSFT ), and Shopify.
• The greatest relative detractors were NVIDIA ( NVDA ) (not owned), Aon ( AON ), and Globant ( GLOB ). The greatest absolute detractors were Aon, Globant, and Thermo Fisher Scientific ( TMO ).
• During the quarter, we initiated new positions in Starbucks ( SBUX ) and IDEXX Laboratories ( IDXX ) and added to existing positions in Shopify, Adyen ( ADYEY )( ADYYF ), Zoetis ( ZTS ), and Oracle. We eliminated our position in Globant and trimmed existing positions in Microsoft, Workday ( WDAY ), Sage Group ( SGGEF )( SGPYY ), Siemens Healthineers (SEMHF)( SMMNY ), Accenture ( ACN ), ADP, Visa ( V ), Mastercard ( MA ), and Alphabet ( GOOG )( GOOGL ).

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