Sustainable Growth Advisers (SGA), an investment management company, released its first-quarter 2026 investor letter for its “Global Growth Strategy.” A copy of the letter can be downloaded here. The SGA Global Growth Portfolio returned -13.6% (Gross) and -13.8% (Net) compared to the MSCI ACWI return of -3.2% and the MSCI ACWI Growth return of -7.7%. AI disruption narratives significantly affected markets in the first two months of the quarter, leading to declines in software, information services, payments, and insurance brokers. In March, geopolitical tensions in the Middle East caused a spike in oil prices, contributing to market volatility and prompting investors to adopt a more cautious stance. The firm believes prioritizing high-quality businesses with strong balance sheets, durable cash flows, and diversified end markets provides resilience against short-term geopolitical shocks. In addition, you can check the Strategy’s top 5 holdings for its best picks for 2026.
In its first-quarter 2026 investor letter, SGA Global Growth Strategy highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On June 15, 2026, Microsoft Corporation (NASDAQ:MSFT) closed at $399.76 per share. One-month return of Microsoft Corporation (NASDAQ:MSFT) was -5.64%, and its shares lost 17.61% over the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a market capitalization of $2.97 trillion.
SGA Global Growth Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) was a detractor from performance during the quarter as investor expectations around cloud acceleration and AI driven upside moderated. While revenue grew 15% and EPS was up 21% in constant currency, Azure growth modestly missed elevated expectations, and management commentary suggested cloud growth is being actively managed through capital allocation rather than demand constrained. This shift reduced confidence in near-term upside, particularly as guidance implied a more stable, but less surprising, growth trajectory. Investor sentiment was further pressured by rising capital intensity tied to AI investments. We believe Microsoft’s entrenched enterprise position, recurring revenue base, and deep integration across productivity, cloud, and security provide significant long-term advantages that are difficult to replicate. As clarity improves around AI returns and cloud growth reaccelerates, we remain confident in Microsoft’s ability to generate strong double-digit earnings and revenue growth over the long-term.”
