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 Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return for Alphabet Inc. (NASDAQ:GOOG) was -1.44%, and its shares gained 64.61% over the last 52 weeks. On December 31, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $313.80 per share, with a market capitalization of $3.78 trillion.
SGA U.S. Large Cap Growth Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) was a contributor during the quarter. In September, Alphabet secured a favorable outcome in its key antitrust case, removing a major overhang for the stock, with remedies that were less severe than feared and allowed Alphabet to retain its core assets and business model. The company also reported strong Q2 results earlier in the quarter, with 13% constant currency revenue growth, normalized margins increasing, and accelerated paid click growth. Cloud backlog growth was particularly notable, rising from 27% to 37%, and the number of cloud deals over $250 million doubled year-over-year. The Gemini app also reached number one in the U.S. App Store, surpassing competitors including ChatGPT. Alphabet’s leadership in AI, search, and cloud is translating into tangible financial results, with management increasing the CapEx budget to support further innovation. While regulatory risks remain, the company’s diversified revenue streams, margin discipline, and strategic investments in AI and cloud position it well for continued growth. We believe Alphabet remains a compelling long-term investment due to its resilient business model, innovation leadership, and ability to monetize secular trends in digital information, advertising, and cloud computing. We raised the position target to an average weight.”
