Sustainable Growth Advisers (SGA), an investment management company, recently released its third-quarter investor letter for its “Global Growth Strategy.” The portfolio returned -2.3% (Gross) and -2.5% (Net) in the third quarter, as compared to a 7.6% return for the MSCI ACWI and a 9.0% return for the MSCI ACWI Growth index. The index returns were primarily driven by excitement for artificial intelligence (AI), while factors aligned with SGA’s strategy, such as quality and sales stability, lagged behind.
SGA’s investment objective is to invest in high-quality growth businesses that are expected to achieve consistent mid-teens earnings growth, accompanied by stable revenue and cash flow. In its third-quarter 2025 investor letter, SGA Global Growth Strategy highlighted stocks like Alibaba Group Holding Limited (NYSE:BABA). Alibaba provides technology infrastructure and marketing reach, with a one-month return of -1.51% and a 52-week gain of 82.11% in its share value. As of January 2, 2026, Alibaba stock closed at $155.74 per share, with a market capitalization of $371.601 billion.
Regarding Alibaba Group Holding Limited (NYSE:BABA), SGA Global Growth Strategy stated in its investor letter, “During the quarter, we initiated a position in Alibaba Group Holding Limited (NYSE:BABA), a leading Chinese technology company with dominant platforms in e-commerce and cloud computing, and growing capabilities in artificial intelligence. Since we last owned the stock, Alibaba has undergone meaningful organizational transformation, improving its pricing power, growth visibility, and management execution. The company’s mission is now closely aligned with China’s national agenda to pursue AI leadership and transition to a consumption-driven economy.”
Alibaba Group Holding Limited (NYSE:BABA) is ranked 17th on the list of 30 Most Popular Stocks Among Hedge Funds. As per data, 130 hedge fund portfolios held Alibaba at the end of the third quarter, up from 101 in the previous quarter. In the fiscal first quarter of 2026, Alibaba reported revenue of RMB 247.7 billion. While acknowledging Alibaba’s potential as an investment, SGA believes that certain AI stocks offer greater upside potential with less downside risk.
For more insights on Alibaba Group Holding Limited (NYSE:BABA) and other investment opportunities, readers can refer to related articles and investor letters on hedge fund strategies for the third quarter of 2025. Stay informed about the latest trends in the market and discover potential investment opportunities for maximizing your portfolio growth.
Disclosure: None. This rewritten article is based on information originally published on Insider Monkey and provides an overview of Sustainable Growth Advisers’ investment strategy and their recent position in Alibaba Group Holding Limited (NYSE:BABA).
