The Navigator® International Equity/ADR strategy delivered annualized gains of 8.53% gross (5.34% net) versus the gains of 4.45% for the MSCI All Country World ex-USA Index over the ten years ending September 30, 2019. For the third quarter of 2019, the strategy had a loss of -2.68% gross (-3.41% net) versus the -1.80% loss in the MSCI All Country World ex-USA Index. For the 10 years ending June 2019, International Equity/ADR remains in the top 1% of Morningstar peer group managers in the U.S. Foreign Large Blend category and received its second consecutive PSN Top Guns Manager of the Decade Award from Informa Solutions for its performance for the 10-year period ending 2018.

Our positioning in Consumer Discretionary and Healthcare helped relative performance while positioning in Consumer Staples and Real Estate acted as a drag. Our holdings in Sekisui House Ltd and Sony Corporation helped performance in the quarter as positions in Grupo Financiero Galicia SA and Rio Tinto plc dampened performance.

From a country perspective, the portfolio benefited from strong performance in our positions in Japan and China while performance in the United Kingdom and Argentina lagged. The value characteristics of the strategy remain more compelling than both its U.S. and international benchmarks as the current P/E of 14.7 is less than that of the S&P 500 (18.9) and EAFE (16.3) with similar quality and business growth characteristics.

Top 5 Contributors

Ticker Quarter Ending June 30, 2019 Average Weight (%) Contribution to Return (%)
SKHSY Sekisui House, Ltd. Sponsored ADR 3.18 0.64
SNE Sony Corporation Sponsored ADR 2.21 0.3
MDT Medtronic Plc 2.3 0.27
NXPI NXP Semiconductors NV 1.6 0.19
IBDRY Iberdrola SA Sponsored ADR 2.55 0.17

Top 5 Detractors

Ticker Quarter Ending September 30, 2019 Average Weight (%) Contribution to Return (%)
GGAL Grupo Financiero Galicia SA Sponsored ADR Class B 0.79 -0.81
RIO Rio Tinto plc Sponsored ADR 1.99 -0.37
SWRAY Swire Pacific Limited Sponsored ADR Class A 1.19 -0.37
LVMUY LVMH Moet Hennessy Louis Vuitton SE Unsponsored ADR 1.7 -0.36
NGLOY Anglo American plc Sponsored ADR 1.66 -0.36
Source: Factset. For illustrative purposes only. Past performance does not guarantee future results. The holdings identified do not represent all of the securities purchased, sold or recommended for advisory clients. In the chart above, “weight” is the average percentage weight of the holding during the period, and “contribution” is the contribution to overall performance during the period. To obtain the calculation methodology and a list showing every holding’s contribution to the overall composite during the period, contact: PortfolioAnalytics@ccmg.com.

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