The Polen Capital International Growth ETF fell 2.26% (NAV) and 2.53% (market price return) during the fourth quarter of 2025, underperforming the MSCI ACWI ex. Index (up 5.05%). For the full year, the ETF was essentially flat with a return of 0.04% compared to a return of 32.39% for the Index.

Since Inception Date: 3/14/2024

Gross Expense Ratio: 0.85%  Net Expense Ratio 0.85%

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MSCI index returns source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing, or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability, or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates, or any third party involved in or related to compiling, computing, or creating the data have any liability for any direct, indirect, special, punitive, consequential, or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. Source note: Returns prior to 1999 are the MSCI ACWI ex-US GR index. Returns from 1999 onwards are MSCI ACWI ex-US NR index.

Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Market Commentary

The investment environment in 2025 proved extraordinarily challenging for our strategy. Foreign equity markets delivered their best returns in over a decade while the Polen Capital International Growth ETF finished the year essentially flat. This underperformance was not a result of deteriorating business fundamentals among our holdings, but rather a pronounced market preference for cyclically sensitive businesses.

This dynamic will be frustratingly familiar to students of market history. In late-cycle periods, investor psychology shifts toward speculative growth and economically sensitive businesses, often disregarding quality metrics. This situation has been exacerbated by the transformation of the global economy with the adoption of artificial intelligence. While AI is undoubtedly a powerful tool that will benefit many companies, exactly which companies and to what extent is still being debated. Markets must attempt to price in these technological shifts, but the transition is often volatile.

Our extensive studies of financial history have guided us to seek to invest in businesses with durable competitive advantages, strong returns on capital, and resilient earnings. Adhering to these principles is especially important when investors excitedly embrace risk and cyclicality. Investment styles cycle in and out of favor but we believe that over the long-term investors are best served by investing in quality businesses that grow without taking undue risks. While we cannot predict how long the current environment will last, we believe quality companies like the ones owned in the Fund should ultimately outperform the broader market.

As we enter 2026, we expect continued uncertainty as AI adoption accelerates and geopolitics remains volatile. We remain committed to our investment principles while staying vigilant for opportunities that meet our quality standards at attractive valuations. We see good times ahead for foreign companies able to navigate today’s difficult environment.

Fund Performance & Attribution

The top three contributors to the Fund’s relative performance in the quarter were Tokyo Electron, Alibaba Group (not owned), and ASML. The top three contributors to the Fund’s absolute performance included Tokyo Electron, ASML, and Shopify.

Tokyo Electron is a leading player in semi-conductor manufacturing equipment. Specifically, it has dominant market share in coaters (90%) and is a top 2 player in etch, in cleaning and in back-end wafer probers. The company continues to benefit from rising demand for more chip volume and more complex chips, driving investment into chip fabrication plants. We expect Tokyo Electron to remain cyclical but over the medium term should be able to grow revenues at high single-digit rate while increasing operating margins from 25% in 2024 to 35% in the medium term, driving mid-teens earnings growth.

Alibaba Group (not owned) shares declined -19% during the quarter as profitability in the core e-commerce business has been pressured by heavy investments to compete with Meituan in food and grocery delivery.

Finally, ASML delivered another solid quarter as semiconductor capital equipment (“semi-cap”) companies continue to benefit from investor optimism around AI. Simply stated, advanced chips sit at the epicenter of everything AI related and ASML’s equipment is essential to printing advanced logic and volatile memory chips. Concerns about a slowdown in the memory chip industry and about Intel’s business waned in the quarter, which helped ignite semi-cap stocks.

The Fund’s top relative and absolute detractors were Monday.com, MercadoLibre, and SAP.

Despite reporting strong results and beating expectations on the top and bottom line, Monday.com sold off on concerns that 4Q guidance implied a near-term growth slowdown. Stepping back, we continue to see revenue growth sustaining at over 20% as Monday steadily pushes up-market from SMB to enterprise customers, expands its platform reach, and makes progress on long-term vast market opportunities relative to its current size. We believe the platform could continue scaling and reach a revenue run rate of 4x today’s level within the next decade.

MercadoLibre is the largest e-commerce and payments platform in Latin America. The stock declined during the quarter primarily related to a slight decline in operating margin as the company invests in free shipping, marketing and credit products. In our view, management’s aptitude to let go of near term profitability to grow its total addressable market and expand moat has enabled the company to grow topline at 35%+ in its 26th year of existence. The company continues to benefit from low e-commerce penetration, low online payment penetration, and low credit penetration in LATAM. Over the years not only do we believe that the company has built a defensible moat but it continues to adapt to make the moat stronger and total addressable market bigger.

SAP came under some pressure in the quarter despite cloud revenue growth coming in ahead of expectations and a still-resilient accumulation in backlogs. We continue to view SAP as one of the more resilient large-scale software business models as it is mission-critical component of customers’ day-to-day operations. Given its strong market position, vast partner ecosystem, balanced growth across new and existing customers, high recurring revenues, and improving margin profile, we believe SAP is well positioned to continue delivering at least mid-teens earnings growth for many years to come.

Fund Activity

In response to the evolving market landscape, we made select changes to the Fund during the quarter. These adjustments were designed to optimize exposures and better position the Fund for future growth opportunities. While periods of relative underperformance can be difficult, we remain confident that our approach will yield positive results over time.

The only new addition in the quarter was Nintendo. However, we also added to existing positions in Tencent Holdings, Lonza Group, and MercadoLibre.

Nintendo is a globally renowned Japanese entertainment specializing in video game consoles, software, and related products. Founded in 1889, Nintendo transitioned from a playing card company to a pioneer in the gaming industry, launching iconic consoles such as the NES, Game Boy, Wii, and the Nintendo Switch. In 2025, the company released the Switch 2, its most powerful internet connected console, while leveraging its intellectual properties like Super Mario, Pokémon, and The Legend of Zelda to deliver unique gaming experiences. Nintendo maintains a strong presence in both hardware and software markets, with a focus on expanding the gaming population through accessible and family-friendly entertainment. We believe this year’s Switch 2 launch marks the beginning of a significant upgrade cycle and anticipate sales to power elevated growth of both hardware (consoles) and software (games) over the coming five years. Nintendo’s overall Switch installed base could reach 250 million in a few years – a near doubling of customers capable of downloading the next great gaming title. All in all, we expect the company to be able grow earnings at a 30% annualized for the next few years, rendering the starting valuation today reasonable if not discounted.

On the other hand, we eliminated our positions in Teleperformance and Siemens Healthineers.

We exited our position in French IT services company Teleperformance. While the company’s core business has stabilized and a recovery is taking shape, its Language Line Solutions segment continues to face underlying headwinds as non-English speakers avoid healthcare services for fear of immigration raids. The stock valuation has been unjustly punished but there is little business momentum today. Given this, we decided to use the proceeds to add to our new position in Nintendo and existing position in Tencent where we see better earnings momentum.

We have also exited our position in Germany-based Siemens Healthineers. The company remains highly advantaged and a leader in its field, however business headwinds we believed to be temporary have turned out to be longer-lasting and we foresee continued difficulties in the year ahead. The biggest issues for the company are its China business—which is hurt by negative pricing trends and weak orders—and tariffs, which will be a meaningful headwind to margins this year. As with Teleperformance, we have used the proceeds to invest in Nintendo and Tencent where we see better earnings momentum.

Outlook

We see a bright path forward for the Fund. We believe our ongoing commitment to quality growth investing positions us well to navigate market volatility and capitalize on the earnings potential of our holdings. The Fund is positioned to benefit from structural trends we see playing out including shifts in technology, increasing focus on health, and strong growth in select Emerging Markets like India. We believe the opportunities for investing outside the US are particularly attractive today. As always, we appreciate your trust and continued partnership.

Thank you for your interest in Polen Capital. Please contact us with any questions.