Chautauqua Global Growth Strategy

OVERVIEW

The Chautauqua Global Growth Strategy invests in equity securities of both U.S. and non-U.S. companies with large market capitalizations. The strategy will normally be diversified among at least three different countries, including the United States. The strategy invests primarily in developed markets but may invest in emerging and less developed markets. The portfolio contains high-quality companies that employ better governance and disclosure, more conservative accounting, less financial leverage and “best-in-class” management. This reduces the risk of negative surprises and mitigates the risk of loss, which is a primary concern. In addition to generating high risk-adjusted returns, the approach creates upside market participation and downside protection.

Portfolio Construction

  • Concentrated portfolio of generally 35–45 stocks
  • Positions are typically 1–6% at the time of purchase 
  • Market caps in excess of $5 billion at the time of purchase 
  • Sector weights limited to 50% of portfolio 
TEAM

For more information, contact David Lubchenco or the Intermediary Specialist in your region.

COMMENTARY

Q2 2017 International and Global Growth Equity Strategies

The second quarter market action resembled the common experience of taking off from the west towards Denver International Airport. During the first 12 weeks of the quarter, as politics, economies and markets became more benign, financial markets were on a gentle glide upward. However, during the final week of the quarter, as when flights begin to cross over the mountains (and descend into DIA), we experienced turbulence. Whether the markets were abruptly spooked in the thirteenth week by somewhat misconstrued comments made by Mario Draghi and Mark Carney, or simply after such a widespread advance, participants took profits and the market's internals turned upside down. Bond prices fell, the price of oil reversed and Chautauqua Capital's managed portfolios sold off.

In this environment, the Chautauqua Capital International Growth Equity composite, which had led the benchmark for much of the quarter, appreciated 5.66%, but gave up the entire lead during the final week of the quarter to underperform the MSCI ACWI ex-U.S. Index®, which appreciated 5.99%, and underperfom the MSCI EAFE Index®, which appreciated 6.37%. The Chautauqua Capital Global Growth Equity composite appreciated 7.86%, outperforming the MSCI ACWI Index®, which appreciated 4.45%.

For the MSCI ACWI ex-U.S. Index®, growth style outperformed value style. Emerging markets performed a little better than developed markets. Large capitalization stocks outperformed small capitalization stocks. For the MSCI EAFE Index®, growth style outperformed value style, and large capitalization stocks slightly outperformed small capitalization stocks. Emerging markets outperformed developed markets.

Read Full International and Global Commentary