Factors Behind SGA U.S. Large Cap Growth Strategy’s New Addition: Nike (NKE)
Sustainable Growth Advisers (SGA), an investment management company, released its third-quarter investor letter for its “U.S. Large Cap Growth Strategy.” A copy of the letter can be downloaded here. The portfolio returned -1.3% (Gross) and -1.4% (Net) in the third quarter, compared to a 10.5% return for the Russell 1000 Growth Index and an 8.1% return for the S&P 500 Index. SGA’s investment objective is to invest in high-quality growth businesses expected to achieve consistent mid-teens earnings growth, accompanied by stable revenue and cash flow. However, in Q3, the market leadership was adverse for SGA’s investment style as lower-quality stocks and cyclical industries outperformed. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, the SGA U.S. Large Cap Growth Strategy highlighted stocks such as NIKE, Inc. (NYSE:NKE). NIKE, Inc. (NYSE:NKE) is a sportswear company that designs and distributes athletic and casual footwear, apparel, equipment, accessories, and services. The one-month return of NIKE, Inc. (NYSE:NKE) was -3.01%, and its shares lost 13.52% of their value over the last 52 weeks. On December 31, 2025, NIKE, Inc. (NYSE:NKE) stock closed at $63.71 per share, with a market capitalization of $94.176 billion.
SGA U.S. Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its third quarter 2025 investor letter:
"NIKE, Inc. (NYSE:NKE) is an iconic sportswear brand that has built its business around promoting a healthier lifestyle, offering products that combine performance, utility, and durability, all driven by technology and innovation. Nike’s gear has become a staple not only for athletes but also for casual wearers, propelled by innovation and strong execution in marketing and supply chain management. The company’s pricing power is anchored in its brand strength and technology, supported by a robust supply chain and distribution network. Competitors have lower margins, so any price war would impact them more than Nike. Repeatable revenues are driven by the nature of sportswear, which wears out over time and leads to repeat purchases, with 65% of sales coming from shoes, a category known for customer loyalty and stickiness. Nike’s revenue in developed markets is growing at mid-single-digit rates, while the rest of the world is growing even faster, fueled by increasing sports participation globally, rising sports spend per capita, greater e-commerce sales, and deeper penetration into emerging markets.
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