International and Global Growth Equities Commentary & Market Outlook


Equity markets started off strong in the third quarter, reaching year-to-date highs in July. However, an amalgamation of factors, with perhaps the most important being the growing acceptance of higher rates for longer, led equity markets lower in August and September. International developed, U.S., and emerging equity markets all finished negative in the quarter, and in that order from worst to best performing. Additionally, growth style stocks significantly underperformed value style stocks in international developed and emerging markets, but the same effect was less pronounced in the U.S. market.

Our investment philosophy emphasizes businesses that benefit from secular trends and possess strong competitive advantages and market positions. Additionally, we purposefully select portfolio companies that earn attractive profit margins, carry strong balance sheets, and generate cash on a consistent basis. We believe these attributes hold tack even if the macro backdrop is deteriorating. For these reasons, portfolios have the ability to outgrow market growth rates over the long-term.

In this inflationary environment, we have made ongoing adjustments to emphasize holdings that we believe are well-suited to transmit pricing power or are valued more attractively. These attributes should help protect against two of the most pernicious effects of inflation for equity investors, namely the compression of profit margins and the compression of valuation multiples.

Thank you for entrusting us to invest your precious capital and to navigate this increasingly uncertain market environment.