| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.7% | -2.5% | 0.5% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| -0.5% | -3.8% | 27.7% | -30.0% | 6.7% | 12.0% |
Polen International Growth Portfolio delivered essentially flat returns in 2025 while foreign equity markets achieved their best performance in over a decade, creating significant underperformance. This underperformance was not due to deteriorating business fundamentals but rather a pronounced market preference for cyclically sensitive businesses over quality growth companies. The portfolio focuses on businesses with durable competitive advantages, strong returns on capital, and resilient earnings. Top contributors included Tokyo Electron, which benefits from AI-driven semiconductor demand, and ASML, essential for advanced chip manufacturing. Key detractors were Monday.com, MercadoLibre, and SAP, despite strong underlying business performance. Portfolio activity included establishing a new position in Nintendo ahead of the Switch 2 launch cycle and adding to Tencent Holdings, Lonza Group, and MercadoLibre. The manager eliminated positions in Teleperformance and Siemens Healthineers to optimize positioning. Looking forward, the portfolio is positioned to benefit from structural trends including AI adoption, technology shifts, health focus, and emerging market growth, particularly in India.
Polen Capital seeks to invest in businesses with durable competitive advantages, strong returns on capital, and resilient earnings, believing that over the long-term investors are best served by investing in quality businesses that grow without taking undue risks.
The manager sees a bright path forward for the Portfolio, believing their commitment to quality growth investing positions them well to navigate market volatility and capitalize on earnings potential. They expect continued uncertainty as AI adoption accelerates and geopolitics remains volatile, but remain committed to investment principles while staying vigilant for opportunities. They believe opportunities for investing outside the US are particularly attractive today.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 27 2026 | 2025 Q4 | 0700.HK, 7974.T, 8035.T, ASML, BABA, LONN.SW, MELI, MNDY, SAP, SHL.DE, SHOP, TEP.PA | AI, E-Commerce, gaming, growth, international, Quality, semiconductors, underperformance | - | AI adoption is transforming the global economy and creating investment opportunities. Advanced chips sit at the epicenter of everything AI related, with ASML's equipment essential to printing advanced logic and volatile memory chips. Markets are attempting to price in these technological shifts, though the transition remains volatile. Semiconductor capital equipment companies continue to benefit from investor optimism around AI. Tokyo Electron benefits from rising demand for more chip volume and more complex chips, driving investment into chip fabrication plants. The company is expected to grow revenues at high single-digit rate while increasing operating margins from 25% to 35% in the medium term. E-commerce platforms face mixed dynamics with growth opportunities offset by competitive pressures. MercadoLibre continues to benefit from low e-commerce penetration in Latin America and maintains 35%+ topline growth in its 26th year. However, Alibaba's profitability in core e-commerce has been pressured by heavy investments to compete in food and grocery delivery. Nintendo's Switch 2 launch marks the beginning of a significant upgrade cycle with potential for elevated growth in both hardware and software over the coming five years. The overall Switch installed base could reach 250 million customers, nearly doubling the customer base capable of downloading gaming titles. The company is expected to grow earnings at 30% annualized for the next few years. The investment approach focuses on businesses with durable competitive advantages, strong returns on capital, and resilient earnings. Quality companies are expected to ultimately outperform the broader market despite current market preference for cyclically sensitive businesses. This quality-focused strategy is especially important when investors embrace risk and cyclicality. |
| Oct 16 2025 | 2025 Q3 | ASM NA, ASML, DSY FP, ICLR, MNDY, SAP, SGE LN, SHOP, TCEHY | Artificial Intelligence, emerging markets, healthcare, semiconductors, software |
SHOP CN ASML NA ICON IE SAGE LN MNDY US SAP GR 6902 JP ASM NA |
The fund underperformed due to volatility in software and IT sectors but reinforced its conviction in AI-driven semiconductor and automation growth. Polen initiated positions in Disco Corp and ASM International to capture the AI semiconductor supply chain, while maintaining exposure to Tencent for emerging-market digital expansion. Managers expect AI and healthcare innovation to drive future international growth returns. |
| Jul 17 2025 | 2025 Q2 | 8035 JP, AON, BNZL LN, EVO SS, EXPN LN, GLOB, IBN, ICLR, INPST NA, MELI, MMYT, NVO, SAP GR, SE, TME | Compounding, earnings, International Growth, Quality, valuation |
MELI 8035 JP SAP GR AON GLOB ICLR IBN |
The letter emphasizes international growth opportunities in businesses with strong competitive positions and long-duration earnings power. Management argues that non-U.S. markets offer attractive relative valuations without sacrificing quality or growth. The focus remains on compounding intrinsic value over full market cycles. |
| Apr 19 2025 | 2025 Q1 | ADYEN NA, AON, GLOB, ICLR, LONN SW, MELI, NVO, SAP GR, TCEHY, TME, TSM, ULVR | - | - | |
| Jan 16 2025 | 2024 Q4 | ACN, CSL AU, EVO SS, ICLR, KER FP, MELI, MNDY, NU, SAP GR, SGE LN, SHOP, SPOT, SU FP, TEMN SW, WTW | - | - | |
| Oct 17 2024 | 2024 Q3 | 8035 JP, AON, ASML, ICLR, MELI, ONON, SAP GR | - | - | |
| Jul 16 2024 | 2024 Q2 | 8035 JP, ADS GR, AON, HDFCB IN, ICON, LSRCY, SAP GR, SGE LN, TEP FP | - | - | |
| May 9 2024 | 2024 Q1 | AON, HDB, ICLR, MELI, SAP GR, TEMN SW, TEP FP | - | - | |
| Dec 1 2024 | 2023 Q4 | 6920 JP, AON, ASML, HDB, MDT, SGE LN, SHOP, TE8A GR, TEP FP, TSM, UL, ULVR LN | - | - | |
| Oct 19 2023 | 2023 Q3 | CSL AU, EVO SS, GLOB, MELI, NOVOB DC, SAGA, TEPN MM | - | - | |
| Jul 19 2023 | 2023 Q2 | 6920 JP, BNZL LN, HDB, ICON, SGE LN, SHOP, TEP AV | - | - | |
| Apr 19 2023 | 2023 Q1 | TEP FP | - | - | |
| Dec 31 2022 | 2022 Q4 | AON, BNZL LN, CAN, GLOB, SAP, SHOP, TCEHY, TEMN SW, ULVR LN | - | - | |
| Oct 26 2022 | 2022 Q3 | ADS GR, EPM, GLOB, ICLR, J2B GR, KER FP, MELI, SAP, TME | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
E-commerceSeveral investments in e-commerce leaders across Asia and Latin America, including MercadoLibre, Sea Limited and Alibaba, faced a more competitive operating environment during the period. As long-term investors, SGA observes that competitive intensity in these markets tends to ebb and flow over shorter time horizons, with market leaders typically emerging from such periods with strengthened strategic positions given inherent network effects. |
Marketplaces Competition Network Effects Asia Latin America | |
GamingNintendo continues to demonstrate exceptional performance with Switch 2 becoming the fastest-selling console in history, selling 17.4 million units in just 7 months. The company has a historically rich first-party software pipeline and is building new recurring revenue streams through Nintendo Switch Online and its expanding cinematic universe. |
Nintendo Console Software Hardware Entertainment | |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
Semiconductor CycleThe portfolio's underweight to South Korean semiconductor companies, including Samsung Electronics and SK Hynix, was a key driver of relative underperformance. These stocks continued to benefit from strong AI-related memory demand and elevated investor enthusiasm. Memory chips are largely a commoditized product with weak pricing power, extreme capital intensity and pronounced boom-bust cycles that lead to volatile earnings. |
Memory South Korea Cyclical Commoditized Volatility | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
| 2025 Q2 |
Compounding |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 17, 2025 | Fund Letters | Todd Morris | SAP GR | SAP SE | Information Technology | Application Software | Bull | Xetra | Cloud_Software, Digital_Transformation, ERP, Subscription_Revenue | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | AON | Aon plc | Financials | Insurance Brokers | Bear | New York Stock Exchange | Insurance_Broking, Professional_Services, Reinsurance, Risk_Management | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | GLOB | Globant S.A. | Information Technology | IT Consulting & Other Services | Bear | New York Stock Exchange | cloud, Digital_Transformation, Enterprise_AI, IT_Services | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | ICLR | ICON plc | Health Care | Life Sciences Tools & Services | Bear | NASDAQ | Clinical_Research, Drug_Development, Life_Sciences_Services, Pharma_Outsourcing | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | IBN | ICICI Bank Limited | Financials | Diversified Banks | Bull | New York Stock Exchange | Credit_Growth, Financial_Inclusion, India, Retail_Banking | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | SHOP CN | Shopify Inc | Information Technology | E-commerce Platforms | Bull | NYSE | AI, ecommerce, growth, Merchants, platform, profitability, Software | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | ASML NA | ASML Holding NV | Information Technology | Semiconductor Equipment | Bull | Euronext Stock Exchange | AI, Demand, Euv, Lithography, Monopoly, semiconductors, technology | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | ICON IE | ICON plc | Industrials | Contract Research Organization | Bull | Euronext Stock Exchange | Cro, Eps, growth, healthcare, Outsourcing, pharmaceuticals | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | SAGE LN | The Sage Group plc | Other | Enterprise Software | Bull | NYSE | Accounting, AI, cashflow, resilience, SMB, Software | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | MNDY US | Monday.com Ltd | Information Technology | Collaboration Software | Bull | NASDAQ | cloud, Collaboration, enterprise, growth, SaaS, Scalable | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | SAP GR | SAP SE | Information Technology | Application Software | Bull | Bolsas y Mercados Españoles (Madrid) | backlog, cloud, enterprise, growth, Margins, resilience, Software | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | 6902 JP | Disco Corp | Consumer Discretionary | Semiconductor Equipment | Bull | NYSE | AI, Equipment, growth, Japan, Precision, semiconductors | Login |
| Oct 16, 2025 | Fund Letters | Todd Morris | ASM NA | ASM International NV | Materials | Semiconductor Equipment | Bull | Euronext Stock Exchange | AI, ALD, Equipment, growth, Netherlands, semiconductors | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | MELI | MercadoLibre, Inc. | Consumer Discretionary | Broadline Retail | Bull | NASDAQ | Digital_Payments, e-commerce, Fintech, Latin_America, Online_Advertising | Login |
| Jul 17, 2025 | Fund Letters | Todd Morris | 8035 JP | Tokyo Electron Ltd. | Information Technology | Semiconductor Equipment | Bull | New York Stock Exchange | Ai_infrastructure, Foundry_Capex, semiconductors, Wafer_Equipment | Login |
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 7974.T | Shares of Nintendo dropped, weighed down by investor concerns that rising costs for its manufacturing parts, including memory chips, could negatively impact its profit. |
| 8035.T | Tokyo Electron did well in the quarter as related semiconductor production equipment companies also did well. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| LONN.SW | we also added to existing positions in Lonza Group |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| MNDY | Monday.com detracted from relative quarterly performance |
| SAP | We trimmed SAP SE. |
| SHL.DE | During the quarter, we also initiated a position in Siemens Healthineers, a global leader in medical imaging and advanced therapies. The company is well placed to benefit from structural megatrends, such as aging demographics, greater emphasis on personalised care and the rising prevalence of chronic diseases. |
| SHOP | Shopify Inc. is a cloud-based software provider for multi-channel commerce. Shares rose 8.3% in the fourth quarter, finishing 2025 up 51.1% on strong financial results that outperformed Street expectations. The company is demonstrating rapid growth at scale with gross merchandise value (GMV) and revenues each growing over 30% year-on-year. |
| TEP.PA | We also initiated a position in Teleperformance, a global provider of outsourced customer experience services with a free cash flow yield north of 20% due to investors' concerns around AI disruption, which we view as unwarranted. |
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