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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Polen Capital - Focus Growth. This analysis is provided for institutional research purposes only and is not investment advice.
"Polen Focus Growth lagged in Q2 2026 as the market rewarded AI infrastructure momentum while penalizing software and healthcare holdings. The managers pivoted aggressively, selling slower-growth positions to fund aerospace, power equipment, data centers, and semiconductor investments where they see structural advantages meeting strong current demand."
The Polen Focus Growth Portfolio returned 6.33% net in Q2 2026 but lagged the Russell 1000 Growth Index's 16.74% return as the market rally remained narrow and concentrated in AI infrastructure beneficiaries, particularly semiconductors and memory businesses. The Portfolio lacked sufficient exposure to what the market rewarded while holding too much software, IT services, and healthcare—areas pressured by AI disruption concerns and lacking near-term momentum. Market structure has become increasingly important, with price momentum, thematic flows, and passive concentration reinforcing one another. The managers responded by redeploying capital from businesses with slowing growth (Accenture, Aon, Synopsys, Uber, Zoetis) into companies with stronger current momentum and visible demand tailwinds, including aerospace suppliers (ATI, GE Aerospace, Howmet), power infrastructure (GE Vernova), data center construction (EMCOR), and semiconductors (TSMC, added to NVIDIA). They acknowledge the Index has changed materially, with semiconductors now representing one-third of the benchmark. While maintaining conviction in long-term earnings power, they recognize the cost of patience has risen and are adapting to be more nimble while preserving their fundamental philosophy of owning competitively advantaged compounders.
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