Section Banner
Seeking
long-term growth

Growth Fund - Commentary

Growth Fund

1Q17 Commentary1

 

Financial markets performed relatively well in the first quarter of 2017. Global equity markets extended gains that began in earnest last November in reaction to the GOP sweep in U.S. elections. Though apparent enthusiasm about better growth prospects may explain gains in the prices of shares and industrial commodities, these gains occurred amid sideways action for bond yields and the U.S. dollar. A Federal Reserve interest-rate tightening in late March was well telegraphed and presented as a benign result of Fed confidence in the economy, and had little adverse effect on markets. Indications of improving fundamentals in Europe and Japan also contributed to improving confidence in economic expansion going forward

.
In the U.S., the job market remained reasonably healthy. Economic performance in the services sector firmed for the quarter, evidenced by upbeat news from surveys and decent gains for services jobs. In addition, manufacturing signals continued to improve, signaling an end to the pressures emanating from the 2015 dollar rebound and plunge for oil prices. 

For the quarter the S&P 500 Index2 rose by 6.07% and the Nasdaq Composite Index2 was up 10.13%. The MSCI Euro Index2 also advanced, climbing 8.46%. Emerging economy equity markets did quite well, with the benchmark MSCI Emerging Markets Index2 up 11.45%. Sovereign debt markets largely moved sideways. Yields on both German and U.S. ten year notes jumped early in March, and then reversed course, ending the quarter little changed. Oil prices ultimately changed little as West Texas Intermediate (WTI) oil prices finished the quarter a bit lower than where they began at around $50 per barrel. Similarly, the dollar bounced around during the quarter and ended with a mild decline.


In terms of market capitalization, large cap stocks gains were more than double that of small cap stocks, as the Russell 10002 and Russell 20002 indexes posted quarterly returns of 6.03% and 2.47%, respectively. As for investment style, growth stocks took the reins in the quarter as the Russell 1000 Growth Index2 and the Russell 1000 Value Index2 posted quarterly returns of 8.91% and 3.27%, respectively.


The Marsico Growth Fund posted a return of 9.96% for the first quarter, outperforming its benchmark, the S&P 500 Index, which returned 6.07%.


Primary Contributors4: Stock selection and an overweight allocation in the Information Technology sector3, strongest-performing sector of the benchmark index, was the largest driver of performance during the period. The Fund’s lack of exposure to the Energy sector, the weakest-performing sector of the benchmark index, also aided performance. The Fund benefitted from stock selection and an overweight allocation to the Consumer Discretionary sector as well.


Primary Detractors4: Stock selection in the Health Care sector was the largest detractor from performance, as several of the Fund’s Health Care Equipment & Services positions failed to match the benchmark return during the period.

 

For more information, please click here for the Marsico Growth Fund Quarterly Investment Update.


1 Performance data quoted represents past performance. Past performance is no guarantee of future results. A Fund's performance, especially for short time periods, should not be the sole factor in making an investment decision. Please keep in mind that our views on investments discussed herein are subject to change at any time and the holdings represented here do not represent all of the securities purchased, sold, or recommended by Marsico Capital Management, LLC ("MCM"). Certain less-material factors may not be presented.

2 The S&P 500 Index is a registered trademark of S&P and is an unmanaged broadly-based index of the common stock prices of 500 large U.S. companies, and includes the reinvestment of dividends. The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000 Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership, and includes the reinvestment of dividends. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership, and includes the reinvestment of dividends. The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values, and includes the reinvestment of dividends. The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values, and includes the reinvestment of dividends. The Nasdaq Composite Index is the market capitalization-weighted index of approximately 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. The MSCI Emerging Markets Index captures large and mid cap representation across 23 Emerging Markets (EM) countries*. With 833 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI Euro Index captures large cap representation across the 10 Developed Markets (DM) countries in the EMU*. With 127 constituents, the index covers approximately 70% of the free float-adjusted market capitalization of the EMU. The indexes mentioned above are unmanaged and not available for direct investment. For comparison purposes, it should be noted that the indexes do not charge fees and have no expenses.

3 Sector and industry weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s (“S&P”), and is licensed for use by MCM. Neither MSCI, S&P, MCM, nor any third party involved in compiling GICS makes any express or implied warranties or representations with respect to such standard or classification (or the results from use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any such standard or classification. MSCI, S&P, and MCM, and any of their affiliates or third parties involved in compiling GICS shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

4Source: UMB Fund Services, Inc., FactSet and Marsico Capital Management, LLC (“MCM”). Data shown such as portfolio holdings, percentages, country, and sector weightings generally applied on the date shown above, and may have changed substantially since then. References to specific securities and sectors are not recommendations to buy or sell such securities or related investments.