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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, SGA - International Growth. This analysis is provided for institutional research purposes only and is not investment advice.
"SGA's International Growth portfolio delivered 7.6% net in Q2 but underperformed as extreme momentum in AI infrastructure and memory stocks dominated markets. Portfolio fundamentals remained strong with 10% median growth and 60% of holdings beating estimates, yet valuations compressed to near-record discounts versus the benchmark."
SGA's International Growth portfolio returned 7.6% net in Q2 2026, underperforming the MSCI ACWI ex USA's 14.5% return as extreme momentum leadership and AI infrastructure spending drove parabolic rallies in memory and semiconductor stocks the portfolio does not own. Despite the challenging environment, portfolio fundamentals remained strong with median revenue and EPS growth of 10% each and 60% of holdings beating consensus expectations. The portfolio now trades near its steepest discount to the benchmark since inception, with an Enterprise Yield of 3.4% supporting double-digit absolute return potential. ARM Holdings and TSMC were top contributors, combining for 6.6% of portfolio returns, while Alibaba, AIA Group, and Yum China detracted on China-related concerns. New positions were initiated in Schneider Electric and Disco to capture long-term growth in electrification and advanced semiconductor packaging. The portfolio is positioned to deliver approximately 12% revenue growth and 17% earnings growth annually over three years from predictable, non-cyclical businesses. As the AI CapEx cycle matures and memory cyclicality reasserts itself, SGA believes conditions are building for meaningful rotation toward quality international compounders trading at historically attractive valuations.
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