Polen Capital is a Boca Raton, Florida-based global investment management firm launched back in 1979. Its CEO is a Chartered Financial Analyst, Mr. Stanely Charles Moss. The firm offers several investment strategies to its clients, focusing on long-term growth. Recently, it has released three investor letters, for its three main strategies – Polen Global Growth Strategy (you can track the letter here), Polen International Growth Strategy (download it here), and Polen Focus Growth Strategy ( a copy of which you can download below). In Polen Focus Growth’s Investor Letter, the fund reported return 17.13% gross of fees for the strategy in the first three months of 2019, compared to 13.65% for the S&P 500 and 16.11% for the Russel 1000 Growth Index.
“During the first quarter of 2019, the Polen Focus Growth Composite Portfolio (the “Portfo-lio”) returned 17.13% gross of fees compared to 16.11% for the Russell 1000 Growth Index and 13.65% for the S&P 500. Every single holding in the Portfolio posted a positive return in the quarter and nearly all of them posted double-digit total returns in the quarter.
Broad market indices snapped back after declining sharply in the fourth quarter of 2018. While always difficult to explain market gyrations, it appears the Federal Reserve’s “patience” on raising interest rates has been a primary driver of improved investor sentiment despite a significant slowing in corporate earnings growth thus far in 2019. The commentary from Fed Chairman Jerome Powell seems to imply no interest rate increases this year. There is also some belief that the Fed will not want to interfere in election politics in 2020, which could lead to an even longer period of very low rates. It is not surprising, then, that price-to-earnings multiples have expanded sharply this quarter. For 2019, the consensus earnings growth estimate for the S&P 500 is low single digits given a difficult comparable from tax-cut-aided growth in 2018. We believe even this low bar will likely prove optimistic, and we would not be surprised if S&P 500 earnings actually decline this year.”
You can download a copy of Polen Capital’s Q1 2019 Investor Letter for its Polen Focus Growth Strategy here: