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Secular Growth Drives Public Cloud

December 12, 2019 | News

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William Blair Large Cap Growth Strategy Co-Portfolio Manager Jim Golan, CFA, discussed his team's stock-picking philosophy in interviews with Business Insider and Morning Trade Live on the TD Ameritrade Network. Two key takeaways are the importance of secular growth and the potential of the public cloud.

Golan says markets have been driven higher recently by Fed easing and an anticipated China trade deal, resulting in shifting market dynamics in the short term, but William Blair's U.S. growth equity team is focused on the long term.

Investors who buy heavy cyclicals in today's low-growth environment, he says, are betting that there will be a reacceleration of global growth, higher inflation, and higher yields. “We're not in that camp,” he says, noting that the sustained low-growth environment is likely the result of longer-term trends, such as an aging population in the developed world.

For the William Blair Large Cap Growth team, picking the right stocks begins with picking the right industries—those where profits are growing at least as quickly as the overall the economy.

For the William Blair Large Cap Growth team, picking the right stocks begins with picking the right industries—those where profits are growing at least as quickly as the overall the economy. “We want to invest in industries where there is secular growth,” he says. One example is in information technology, where the team is seeing significant growth in digital security and the public cloud.

Golan finds the public cloud particularly compelling, the key selling points being that companies can lower their capex spending by buying less equipment and can better control IT labor costs.

“Today public cloud spending is probably a little bit less than $200 billion overall, and we think over the next five to six years that could reach over $500 billion,” Golan says.

Only after looking at industry trends such as these does the team evaluate specific companies. Since the stocks are typically held for three to five years, the team works to identify structurally advantaged companies that are taking share of growing industry profit pools.

Read the Business Insider article
Watch Jim Golan's “Morning Trade Live” interview on the TD Ameritrade Network


The statements opinions expressed are those of each individual as of the date of publication. This information is subject to change at any time based on market and other conditions and should not be construed as a recommendation of any specific security. The securities discussed do not represent all of the Fund's holdings. Not all securities held in the portfolio performed as favorably as those discussed, and there is no guarantee that these securities will continue to perform favorably in the future. There is no guarantee that the Fund will continue to hold any one particular security or stay invested in any particular sector. Holdings are subject to change at any time. There can be no assurance that the Fund will achieve its objectives or provide positive returns over any period of time.

The holdings mentioned comprise the following percentages of the William Blair Large Cap Growth Fund's total net assets as of 10/31/2019: Microsoft Corporation 9.1%, Inc. 7.0%, Alphabet Class A 5.0%, Unitedhealth Group Incorporated 4.5%, Accenture PLC 3.6%, Alphabet Class C 2.2%. For a complete list of the Fund's holdings, please visit

Standardized Performance (Period ended 9/30/19)

QTD YTD 1 YR 3 YR 5 YR 10 YR
William Blair Large Cap Growth Fund (Class I) 1.14% 25.67% 10.02% 19.54% 15.10% 15.18%
Russell 1000 Growth Index 1.49% 23.30% 3.71% 16.89% 13.39% 14.94%
S&P 500 Index 1.70% 20.55% 4.25% 13.39% 10.84% 13.24%


Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Returns shown assume reinvestment of dividends and capital gains. Periods greater than one year are annualized. Investment returns and principal will fluctuate with market and economic conditions and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call +1 800 742 7272, or visit our Web site at Class I shares are available to investors who meet certain eligibility requirements.

Expense ratio (gross/net): 0.80%/0.65%. The Fund's Adviser has contractually agreed to waive fees and/or reimburse expenses to limit fund operating expenses until 4/30/20.

The Russell 1000® Growth Index consists of large-capitalization companies with above average price-to-book ratios and forecasted growth rates. The S&P 500 Index indicates broad larger capitalization equity market performance. Indices are unmanaged, do not incur fees or expenses, and cannot be invested in directly.

The Fund's returns will vary, and you could lose money by investing in the Fund. The Fund invests most of its assets in equity securities of large cap domestic growth companies where the primary risk is that the value of the equity securities it holds might decrease in response to the activities of those companies or market and economic conditions.  Individual securities may not perform as expected or a strategy used by the Adviser may fail to produce its intended result.  Different investment styles tend to shift in and out of favor depending on market conditions and investor sentiment, and at times when the investment style used by the Adviser for the Fund is out of favor, the Fund may underperform other equity funds that use different investment styles. The Fund is not intended to be a complete investment program. The Fund is designed for long-term investors. Diversification does not ensure against loss.