PSN Top Guns 4Q 2020 2 stars

We are proud to report that our three innovation-focused portfolios, Beagle Leading Innovators, Humboldt Global Innovators and Darwin Emerging Innovators, continue to deliver considerable value on both a relative and absolute basis for our clients. All three strategies won PSN 2 Star (meaning trailing one-year) Top Guns awards for the period ending December 31, 2020, including multiple first place rankings.

While the awards were for the one-year period, we also are proud to announce our flagship Beagle Leading Innovators strategy recently reached its three-year track record with similarly strong results.
2020.12 ETree PSN Top Gun Awards Section-1

Despite the exceptionally difficult investment environment in 2020, our strategies outperformed, with returns that were well above what one would normally expect in a given year. We believe that the theme of innovation was the primary reason for our strong performance; innovation is becoming the solution for many challenges across the economy.

In addition to innovation being a solution to the pandemic itself, innovation-focused investment strategies were validated as a way to weather storms. Innovative businesses were shown in this crisis to be more resilient than traditional or less-innovative businesses. When the US economy (using GDP data) was shrinking during the first and second quarters, the businesses held in Evolutionary Tree client portfolios grew revenue, on average, over 30% year over year in each quarter. These innovative companies, in aggregate, experienced resiliency in their businesses despite the recessionary environment, with positive and even accelerating revenue growth throughout the year. *See important information below on gross and net performance.

2020.12 ETree PSN Beagle Strategy2020.12 ETree PSN Large Cap US Growth Universe Tables-1

One of the primary reasons we focus on innovation versus worrying about the economy or the markets is that leading innovators rely more on the power of innovation to sustain long-term growth than the state of the general economy. It turns out that this also means that during economic slowdowns, or even crises, this internal engine — innovation — allows portfolio holdings to drive forward and in many cases continue growing even during recessions. Crises also accelerate secular trends — essentially accelerating the future — and thus can benefit many of the companies we own which are leaders in these areas.

Our Global Equity offering, Humboldt Global Innovators, has seen similar success versus its benchmark and peers as the same trends discussed above also played out on the global stage. The strategy ranked #2 within the PSN Global Equity universe for the 2020 calendar year. Its strong results validate the strength of our global research capability, which we believe every equity manager must possess in this fast-changing world economy.
2020.12 ETree PSN Humboldt Strategy

2020.12 ETree PSN Global Equity Universe Table-1

Lastly, our small-to-mid cap offering, Darwin Emerging Innovators, also took home PSN Top Gun honors, ranking #1 in the Mid Cap Growth universe and #2 in the entire U.S. Growth universe. We believe this validates our team’s ability to identify emerging innovators across the market cap spectrum.

2020.12 ETree PSN Darwin Strategy-1


2020.12 ETree PSN Mid Cap Growth Universe Table-1



The Outlook For Innovation - Recorded on November 17, 2020

The content of this call is presented for educational and informational purposes only. Forward-looking statements are not recommendations to buy or sell any security and reflect our own opinions and estimates. Investing in equity securities involves risk and principal loss is possible. Past performance does not guarantee future results.

 

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The information and views expressed herein are provided for informational purposes only and do not constitute investment advice. If performance is shown, it is based on a composite of actual trading in client accounts, but is not necessarily reflective of the performance of any individual client account. Differences in account size, timing of transactions, and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Differences in the methodology used to calculate performance may also lead to different performance results than those shown. Past performance does not guarantee future results. Any projections, outlooks, or estimates contained herein are forward looking statements based on specific assumptions that are current as of the date indicated, subject to change without notice, and should not be construed as indicative of any actual events that have occurred or may occur. The inclusion of particular investments is not intended to represent, and should not be interpreted to imply, a past or current specific recommendation to purchase or sell a security and should be considered in the context of an overall portfolio. Investing in equity securities involves risk and principal loss is possible. Nothing contained herein constitutes investment, legal, tax, or other advice and should not be relied upon in making an investment or other decision. Investors should always obtain and read up-to-date investment services material before deciding whether to appoint an investment advisor.