| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.4% | 1.0% | 9.6% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 9.6% | -5.5% | 17.8% | -18.4% | 8.6% | 24.5% |
SGA International Growth returned 1.0% net in Q4 2025, underperforming the MSCI ACWI ex USA return of 5.1% as cyclical and momentum-driven assets dominated while quality growth strategies faced headwinds. The portfolio generated 7.3% gross and 6.4% net annualized returns since inception versus 6.7% and 6.6% for benchmarks respectively. The global economic landscape defied pessimistic forecasts with growth expectations increasing, supported by resilient consumer spending and easing monetary policies from major central banks. This environment favored cyclical assets while high-quality growth sectors lagged. Top contributors included Fast Retailing, Sartorius, and Infosys, while detractors were Alibaba, Dassault Systemes, and Arm Holdings. New positions were established in Sea Limited and Grab Holdings, Southeast Asian consumer internet companies. The portfolio is well positioned entering 2026 with quality factor at historically depressed levels and attractive relative valuations. SGA maintains conviction in high-quality companies with predictable growth that should benefit from broadening market leadership.
SGA builds high-conviction portfolios focused on quality growth businesses anticipated to achieve consistent mid-teens earnings growth with reduced variability, supported by predictable revenue and cash flow generation, designed to protect and reliably compound client wealth over time.
Entering 2026, the portfolio is well positioned with quality factor at historically depressed relative levels and attractive valuations. SGA finds it unlikely that the market will continue to ignore high-quality companies and believes the setup is very attractive as the portfolio is positioned to benefit from a broadening of market leadership and softening of extreme momentum dynamics.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 8 2026 | 2025 Q4 | 1299.HK, 6098.T, 9983.T, ADYEN.AS, ALC, AON, ARM, BABA, CP, DSY.PA, EXPN.L, FEMSAUBD.MX, GALD, GRAB, HDFCBANK.NS, HEIA.AS, HLN.L, INFY, LIN, MELI, OR.PA, SAP, SE, SGE.L, SHOP, SRT3.DE, STE, TEAM, TSM, UL, UMG.AS, WALMEX.MX, WCN, YUMC | AI, Cyclical, E-Commerce, growth, international, Quality, Southeast Asia, valuation |
9983 JP SRT GR DSY FP ARM TEAM |
SGA continues to believe the most attractive long-term AI opportunities reside with businesses building long-term value through proprietary data and integrated workflows. The portfolio is… |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
E-commerceThe portfolio maintains exposure to e-commerce platforms and enablement technologies through holdings like Amazon and Shopify. The fund views e-commerce as benefiting from secular shifts in consumer behavior and continued digital commerce adoption across retail categories. |
Platforms Digital Retail Consumer Technology | |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | Tucker Brown | 9983 JP | Fast Retailing Co., Ltd. | Consumer Discretionary | Apparel Retail | Bull | New York Stock Exchange | China, fashion, Japan, Moat, retail | Login |
| Feb 8, 2026 | Fund Letters | Tucker Brown | SRT GR | Sartorius AG | Health Care | Life Sciences Tools & Services | Bull | Xetra | Bioprocessing, Consumables, earnings growth, lifesciences, Margins | Login |
| Feb 8, 2026 | Fund Letters | Tucker Brown | DSY FP | Dassault Systemes SE | Information Technology | Application Software | Bull | Euronext Stock Exchange | engineering, Lifecycle, SaaS, Software, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | Tucker Brown | ARM | Arm Holdings plc | Information Technology | Semiconductors | Bull | NASDAQ | AI, architecture, datacenters, royalties, semiconductors | Login |
| Feb 8, 2026 | Fund Letters | Tucker Brown | TEAM | Atlassian Corp. | Information Technology | Application Software | Bear | NASDAQ | AI, Collaboration, Rotation, Software, uncertainty | Login |
| TICKER | COMMENTARY |
|---|---|
| 1299.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 9983.T | Fast Retailing was a top contributor during the quarter, driven by strong execution across its global operations. China returned to growth in August and September, with management guiding for further improvement in both revenue and profit in the coming fiscal year. |
| AON | increased exposure to insurance brokers (Aon and Willis Towers Watson) |
| ARM | Arm Holdings was a detractor during the quarter, despite a strong fiscal Q2 earnings report with revenue up 34% and profit 43%. Royalty revenue grew 21%, driven by triple digits data center growth and higher smartphone royalty from compute subsystem (CSS) customers. However, the company faced several headwinds that weighed on investor sentiment. Elevated R&D spending, mostly related to Arm's design service for SoftBank, will impact Arm's margin outlook for next year. |
| BABA | our Asian investments performed strongly with Alibaba and Jardine Matheson up 63% |
| CP | Railroads operator transporting goods across Canada, the U.S. and Mexico |
| DSY.PA | Dassault Systemes was a detractor during the quarter as the company reported a softer-than-expected third quarter, with sales up 5% excluding foreign exchange impact and earnings up 10%. The primary headwind was the accelerated transition to a SaaS model, which drove a decline in licensed revenue and, while recurring revenue outperformed, was not enough to offset the shortfall. |
| EXPN.L | Experian's shares were -1% in 2025. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. Experian is valued on a prospective 4.5% equity FCF yield. We have added to the Strategy's investments this year. |
| GRAB | Grab Holdings is a super-app for ride-hailing, food delivery, and digital payment services on mobile devices that operates in Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand, and Vietnam. Grab has a dominant market share (70%+) in ride hailing in most Southeast Asia markets except for Indonesia where market share is at 50%. It also owns a mapping service in the region, which enables more accurate routing and time estimates for drivers and better reliability and experiences for consumers. |
| HEIA.AS | Heineken (+8%) |
| INFY | Infosys was a top contributor during the quarter, driven by steady execution, resilient recurring revenues, and strong performance in large-scale digital transformation projects. The company's industry-leading operating margins and high client retention supported robust free cash flow generation, while notable contract wins, such as the NHS workforce management solution in the UK, highlighted Infosys's ability to deliver innovative platforms for global clients. |
| LIN | While the company remains a high-quality global leader in industrial gases, shares of Linde plc declined nearly 10% in Q4 due to a persistent industrial gas volume recession, softer guidance and global macroeconomic concerns. From a macro standpoint, the company continues to struggle with negative base volumes in its core industrial segments. |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| OR.PA | In 2024, it seemed to us that other investors were unduly focused on a slowdown in consumer spending in China, an important market for L'Oréal yet contributing only 17% of its sales. L'Oréal is a broad, balanced business such that in any given year, faster-growing parts of the world will typically offset the weaker ones. We saw this in 2025, where strength in markets such as Europe, the Middle East and South America offset sluggish markets in China and the US, allowing L'Oréal to deliver a year of solid earnings growth. |
| SAP | We trimmed SAP SE. |
| SE | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| SGE.L | By contrast, we exited our small position in Sage Group to help fund our new positions in Spotify and Tencent. Sage's business is doing fine but we believe there are better opportunities currently in those other businesses and without the confidence to add to our current weight, we feel it is more appropriate to move on from the business for the time being. |
| 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. |
| SRT3.DE | Sartorius, a supplier of laboratory and bioprocessing products to the biopharmaceutical industry, was a top contributor during the quarter supported by strong third quarter results. Sales grew 10% on a constant currency basis and EPS rose 27%, recovering from a difficult quarter last year. Its bioprocessing division, which caters to biological manufacturing and represents roughly 80% of sales, delivered 11% constant currency sales growth with all regions demonstrating strong growth, including in Asia Pacific. |
| STE | STE trades ~25x 2026 EPS and 21x 2027 EPS, versus SHC at 17x and 14x my estimates, respectively. |
| TEAM | We sold Atlassian, which produces collaboration software, as we reduced our overweight exposure to software because we feel that AI has widened the range of outcomes for predominantly seat-based revenue models. |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| UL | Unilever is a global consumer goods company that develops and markets everyday food and personal care brands for billions of consumers worldwide. Anchored by iconic brands such as Dove, Knorr, Hellmann's and Vaseline, Unilever's refreshed management team is driving improved execution and strategic discipline to deliver more consistent growth, with a focus on higher-margin categories. Specifically, we appreciate their undertaking of various self-help initiatives, including cost-savings programs and brand divestments, which we believe will help unlock sustained value in the future. Despite Unilever's strong outlook, it trades at a discount to its peer group as prior undermanagement has resulted in 1% volume growth for the past decade. This provided us the opportunity to invest in a strong company with leading brands and an improved management team that is poised to increase per-share value. |
| UMG.AS | UMG is a high-quality, capital-light, rapidly growing royalty on greater music consumption. 'Streaming 2.0' deals, which incorporate wholesale price increases, should lead to higher subscription revenue growth. New partners and product tiers should allow for better customer segmentation. AI can be a further tailwind to growth. |
| WCN | Our lone position in Utilities, Waste Connections, Inc. (WCN), was flat for the quarter but the stability of the company's earnings and cash flows provided the downside capture we've come to expect. |
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