Since Inception, the Navigator® International Equity/ADR strategy delivered annualized gains of 6.06% gross (2.93% net) vs. the gains of 1.88% for the MSCI All Country World ex-USA Index. For the fourth quarter of 2019, the strategy had a gain of 10.90% gross (10.10% net) versus the 8.92% gain in the MSCI All Country World ex-USA Index.

For the 10 years ending June 2019, International Equity/ADR remains in the top 2% of Morningstar peer group managers in the U.S. Foreign Large Blend category. Additionally, the International Equity/ADR Strategy 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 Energy helped relative performance while positioning in Information Technology and Utilities acted as a drag.

Our holdings in Vipshop Holdings Ltd and Companhia Paranaense de Energia Spd helped performance in the quarter as positions in Publicis Groupe SA and Swire Pacific Limited dampened performance. From a country perspective, the portfolio benefited from strong performance in our positions in Brazil and Canada while performance in France and Spain lagged. The value characteristics of the strategy remain more compelling than both its U.S. and international benchmarks as the current P/E of 16.8 is less than that of the S&P 500 (20.6) and EAFE (18.5) with similar quality and business growth characteristics.

Top 5 Contributors

Ticker Quarter Ending December 31, 2019 Average Weight (%) Contribution to Return (%)
VIPS Vipshop Holdings Ltd Sponsored ADR 2.58 1.25
ELP Companhia Paranaense de Energia Sponsored ADR Pfd Class B 1.9 0.74
TSU TIM Participacoes S.A. Sponsored ADR 1.77 0.64
LUKOY Oil company LUKOIL PJSC Sponsored ADR 1.95 0.47
SNE Sony Corporation Sponsored ADR 2.64 0.39

Top 5 Detractors

Ticker Quarter Ending December 31, 2019 Average Weight (%) Contribution to Return (%)
PUBGY Publicis Groupe SA Sponsored ADR 1.05 -0.46
SWRAY Swire Pacific Limited Sponsored ADR Class A 0.6 -0.07
ADRNY Royal Ahold Delhaize N.V. Sponsored ADR 0.38 -0.05
ETN Eaton Corp. Plc 0.37 -0.05
IBDRY Iberdrola SA Sponsored ADR 2.77 -0.04
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.

The views expressed are those of the author(s) and do not necessarily reflect the views of Clark Capital Management Group. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. There is no guarantee of the future performance of any Clark Capital investments portfolio. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing herein should be construed as a solicitation, recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. For educational use only. This information is not intended to serve as investment advice. This material is not intended to be relied upon as a forecast or research. The investment or strategy discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances. Past performance does not guarantee future results.
This document may contain certain information that constitutes forward-looking statements which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology (or the negative thereof). Forward looking statements cannot be guaranteed. No assurance, representation, or warranty is made by any person that any of Clark Capital’s assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future.
The volatility (beta) of a client’s portfolio may be greater or less than its respective benchmark. It is not possible to invest in these indices.
Index returns include the reinvestment of income and dividends. The returns for these unmanaged indexes do not include any transaction costs, management fees or other costs. It is not possible to make an investment directly in any index.
The S&P 500 measures the performance of the 500 leading companies in leading industries of the U.S. economy, capturing 75 of U S equities.
The S&P SmallCap 600 seeks to measure the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 3000 Index measures the performance of the 3 000 largest U S companies based on total market capitalization, which represents approximately 98 of the investable U.S. equity market.
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For each separate account with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a separate account’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of separate accounts in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a separate account is derived from a weighted average of the performance figures associated with its three-, five- and ten-year Morningstar Rating metrics.
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The PSN universes were created using the information collected through the PSN investment manager questionnaire and use only gross of fee returns. Mutual fund and commingled fund products are not included in the universe. PSN Top Guns investment managers must claim that they are GIPS compliant. Products must have an R-Squared of 0.80 or greater relative to the style benchmark for the ten year period ending December 31, 2017. Moreover, products must have returns greater than the style benchmark for the ten year period ending December 31, 2017 and also Standard Deviation less than the style benchmark for the ten year period ending December 31, 2017 At this point, the top ten performers for the latest 10 year period ending December 31, 2017 become the PSN Top Guns Manager of the Decade. This designation may not be representative of any one client’s experience because the rating reflects an average of all, or a sample of all, the experiences of investors in the strategy. Though the strategy was in the top ten, it was not ranked first in the top ten category for each period. Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment.
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment.
Clark Capital Management Group, Inc. reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The information provided in this report should not be considered a recommendation to purchase or sell any particular security, sector or industry. There is no assurance that any securities, sectors or industries discussed herein will be included in an account’s portfolio. Asset allocation will vary and the samples shown may not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions, holdings or sectors discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
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