| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.32% | 17.05% | 16.94% |
Fidelity Dividend Growth Fund returned 17.05% in Q2 2026, outperforming the S&P 500's 15.20% gain. The fund's outperformance was driven primarily by stock selection in information technology, particularly large overweight positions in AI infrastructure beneficiaries. Western Digital and Seagate Technology were top contributors, gaining 140% and 147% respectively on surging demand for storage solutions in AI-capable data centers. SK Hynix, an out-of-benchmark position, gained 216% on record revenue from high-bandwidth memory demand. The manager maintains conviction in AI's transformative impact and holds Taiwan Semiconductor Manufacturing as the largest active position. Beyond technology, the fund emphasizes commercial aerospace recovery through a major Boeing overweight and onshoring-driven industrial activity via Allison Transmission Holdings. Energy exposure was reduced during the quarter to book profits following oil price spikes from U.S.-Iran conflict, with capital redeployed to consumer and healthcare sectors. The manager remains optimistic about identified themes despite market concerns about AI investment durability and the prospect of higher interest rates. Key underweights include Apple, Amazon, Tesla, and Microsoft.
The fund seeks capital appreciation through a diversified portfolio of large- and mid-cap dividend growth stocks, with current emphasis on AI infrastructure beneficiaries, commercial aerospace recovery, and onshoring-driven industrial activity.
The manager remains optimistic about previously identified themes, particularly artificial intelligence and its massive implications for developed economies. Within cyclically driven earnings, commercial aerospace is expected to strengthen as production recovers to pre-pandemic levels. The fund continues to emphasize AI infrastructure beneficiaries, mission-critical energy infrastructure providers, and companies benefiting from federal infrastructure and onshoring support. The manager expresses some caution about the durability of higher oil prices and AI infrastructure investment sustainability but maintains conviction in core positions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 5 2026 | 2026 Q2 | 000660 KS, AAPL, ALSN, AMAT, AMD, BA, INTC, LRCX, MSFT, MU, NVDA, STX, TSM, WDC | aerospace, AI, Dividend Growth, energy, large cap, Onshoring, semiconductors, technology | - | The fund outperformed by 190 basis points in Q2 2026, driven by concentrated bets on AI infrastructure. Western Digital, Seagate, and SK Hynix delivered exceptional returns on exploding data center storage demand. Taiwan Semiconductor remains the largest active position. The manager trimmed energy profits post-Iran conflict and maintains conviction in commercial aerospace recovery through Boeing. Technology underweights include Apple, Amazon, and Microsoft. |
| Mar 31 2026 | 2026 Q1 | AAPL, GEV, GOOGL, OWL, STX, TSM, WDC | aerospace, AI, dividends, energy, large cap, technology, value | - | Fidelity Dividend Growth Fund outperformed during Q1 market volatility through strong tech stock selection and energy overweight. Manager maintains conviction in AI transformation theme and energy sector fundamentals. Key positions include data storage leaders Western Digital and Seagate, power generation via GE Vernova, and aerospace recovery play Boeing as largest overweight. |
| Feb 8 2026 | 2025 Q4 | 000660.KS, AAPL, ALSN, AMZN, BA, BN, EPD, GEV, GOOGL, LLY, META, MSFT, MU, NFLX, NVDA, ORCL, PAYC, TSLA, TSM, WDC | aerospace, AI, dividends, energy, large cap, semiconductors, technology |
GOOGL 000660 KS PAYC AAPL GEV |
Fidelity Dividend Growth Fund outperformed with 5.09% Q4 returns driven by AI beneficiaries Alphabet and memory chip leader SK Hynix. Manager Zach Turner maintains conviction in generative AI's transformative impact while positioning for commercial aviation recovery through Boeing overweight. Energy transition plays like GE Vernova benefit from electrification trends and AI power demands. |
| Nov 5 2025 | 2025 Q3 | AAPL, ALSN, AMZN, AVGO, BA, BAC, BRK.A, BRK.B, EPD, ET, GEV, GOOGL, META, MSFT, NVDA, OWL, PAYC, TSLA, TSM, WDC | dividends, energy, industrials, large cap, Quality, technology, value | - | Fidelity Dividend Growth Fund outperformed in Q3 2025 through strong industrials and technology stock selection, particularly Taiwan Semiconductor and Western Digital. Manager Turner focuses on dividend-growing companies in industrials and energy sectors while maintaining cautious consumer discretionary positioning. Key overweights include Boeing and GE Vernova, positioned for aerospace recovery and electrification trends respectively. |
| Jul 31 2025 | 2025 Q2 | AAPL, ALSN, AMZN, AVGO, BA, BAC, BRK.A, BRK.B, EPD, ET, GEV, GOOGL, META, MSFT, NVDA, OWL, PAYC, TSLA, TSM, WDC | aerospace, AI, dividends, energy, industrials, large cap, Quality, technology | - | Fidelity Dividend Growth Fund outperformed in Q3 2025 through strong industrials and technology stock selection, particularly Taiwan Semiconductor and Western Digital. The dividend-focused strategy maintains overweights in aerospace and energy transition plays like Boeing and GE Vernova while underweighting Apple on tariff concerns. Manager Turner remains cautiously optimistic despite economic headwinds. |
| Mar 31 2025 | 2025 Q1 | AAPL, ALSN, AMZN, AVGO, BA, BAC, BN, BRK.B, EME, EPD, ET, GEV, GOOGL, META, MRVL, MSFT, NVDA, TSLA, V, WFC | aerospace, AI, dividends, energy, industrials, large cap, value | - | Fidelity Dividend Growth Fund underperformed in Q1 2025 as AI enthusiasm cooled and policy uncertainty rose. Manager Turner pivoted from semiconductors to industrial AI plays like GE Vernova while maintaining energy overweights for attractive valuations and capital returns. Aerospace exposure through Boeing reflects supply chain recovery. Portfolio emphasizes dividend-growing quality companies despite macro headwinds from inflation and policy shifts. |
| Sep 30 2024 | 2024 Q3 | AAPL, ABBV, ALSN, AMZN, APO, AVGO, BA, BN, BRK-A, CMCSA, CVX, EPD, ET, EXC, GEV, GOOGL, HD, JNJ, JPM, META, MRVL, MSFT, MU, NVDA, QCOM, TSLA, VST, XOM | aerospace, AI, dividends, energy, large cap, technology, Utilities, value | - | Fidelity Dividend Growth Fund pivoted from defense to offense in Q3, overweighting AI-beneficiary utilities, energy infrastructure, and select semiconductors while maintaining dividend growth focus. Qualcomm and Boeing detracted on sector rotation and operational issues, while GE Vernova and Allison Transmission contributed strongly. Manager targets idiosyncratic growth drivers disconnected from macro uncertainty. |
| Jun 30 2024 | 2024 Q2 | 005930.KS, AAPL, ALSN, AMZN, AVGO, CI, EIX, GOOGL, GPN, HD, JNJ, MRK, MU, NEE, NVDA, QCOM, TER, TSLA, TSM, VST | aerospace, AI, dividends, energy, large cap, semiconductors, technology, Utilities | - | Fidelity Dividend Growth Fund outperformed in Q2 2024 with a 5.45% return, driven by AI beneficiaries like Nvidia and strong sector allocation. The fund emphasizes dividend-growing companies while positioning for AI-driven upgrade cycles through semiconductor overweights. Additional overweights in energy, aerospace, and utilities target sectors with favorable fundamentals and capital return characteristics despite potential economic slowdown. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager views AI as having massive implications for developed economies and maintains it as a key area of interest. The fund holds significant positions in AI infrastructure beneficiaries including Taiwan Semiconductor Manufacturing (largest active position), Western Digital, and Seagate Technology, all of which benefited from surging demand for AI-capable data centers and storage solutions. The manager explicitly states continued belief in the transformative impact of large language models and other AI breakthroughs. |
Data Centers Semiconductors Storage Infrastructure |
Semiconductor CycleThe fund is heavily positioned in memory and semiconductor companies experiencing strong demand from AI infrastructure buildout. SK Hynix reported record revenue with high-bandwidth memory demand outstripping supply, supporting sustained pricing strength. Western Digital and Seagate both raised guidance on brisk AI-related storage demand. The manager maintains conviction despite June market concerns about AI infrastructure investment durability. |
Memory Storage HBM Foundries | |
AerospaceCommercial aerospace is identified as a key theme representing one of the few end markets not yet recovered to pre-pandemic production levels despite robust air travel recovery. Boeing is a major overweight position, with the manager anticipating better times ahead as the company works through production issues and benefits from a backlog that declined from 17.2 years to 10.6 years. |
Commercial Aviation Production Recovery Backlog | |
OnshoringThe fund holds a meaningful overweight in Allison Transmission Holdings, which has benefited from accelerating industrial activity driven by federal support for infrastructure and onshoring. The company completed a major acquisition of Dana's Off-Highway Drive & Motion Systems business, which the manager views favorably for future prospects. |
Infrastructure Spending Industrial Activity Federal Support | |
OilEnergy was one of the fund's biggest sector overweights but was reduced during Q2. The sector benefited from oil price spikes following U.S.-Iran conflict and Strait of Hormuz closure, but the manager was unsure about price durability and elected to book profits by selling some positions and reducing others. The fund remains focused on mission-critical infrastructure providers and E&P firms with low decline rates and predictable capital spending. |
Exploration & Production Midstream Infrastructure | |
DividendsThe fund's core investment philosophy centers on companies with favorable prospects to sustainably pay and grow dividends over time. The manager believes companies with a history of growing dividends demonstrate superior risk-adjusted returns over a market cycle. This dividend growth focus is integrated into the fund's quality and valuation assessment framework. |
Dividend Growth Capital Return Quality | |
| 2026 Q1 |
AIManager remains optimistic about generative AI, believing current breakthroughs in large language models will have massive implications for developed economies, comparable to the transistor or World Wide Web. Key AI-positioned holdings include Taiwan Semiconductor Manufacturing, Alphabet, Western Digital, and Seagate Technology Holdings. |
Generative AI Large Language Models Data Storage Hyperscalers |
EnergyFund maintains largest sector overweight in energy due to reasonable valuations, capital return policies through dividends and buybacks, and expected growth in global energy consumption driven by AI applications. Focus on mission-critical infrastructure providers and E&P firms with low decline rates. |
Energy Infrastructure Capital Returns Oil Gas | |
AerospaceKey theme focused on strengthening commercial aerospace, one of few end markets not yet recovered to pre-pandemic production levels despite robust air travel recovery. Boeing is the fund's largest overweight position despite ongoing production issues, with backlog declining and balance sheet strengthened. |
Commercial Aerospace Boeing Air Travel Recovery | |
DividendsCore investment philosophy centers on companies with history of growing dividends, which the manager believes demonstrate superior risk-adjusted returns over market cycles. Energy sector holdings particularly valued for dividend and buyback policies. |
Dividend Growth Capital Returns Risk-Adjusted Returns | |
Data CentersGE Vernova positioned to benefit from surging electricity demand driven by power-hungry AI data centers. The power generation business reported solid results and raised guidance citing favorable trends in electricity demand. |
Power Generation Electricity Demand AI Infrastructure | |
| 2025 Q4 |
PharmaceuticalsHealth care holdings including pharmaceutical and biotechnology companies added meaningfully to returns. Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions. |
Pharmaceuticals Biotechnology Healthcare |
Defense SpendingDefense-related holdings such as BAE Systems and Rheinmetall had been standout performers for much of the year but fell back in Q4. While these businesses currently benefit from secular growth in defense spending around the world, share prices have moved ahead of underlying fundamentals, prompting modest position trimming. |
Defense Aerospace Military | |
ValueThe gap in valuation between US and non-US equities remains quite significant and should serve the funds well going forward given their non-US-centric postures. The funds remain well positioned in financially sound enterprises where company stock prices are more than collateralized by underlying intrinsic value. |
Value Valuation Undervalued | |
AIMarket enthusiasm has led to high valuations across most asset categories, particularly US equities, driven by excitement around artificial intelligence and its ability to dramatically impact productivity. However, the managers note that even the most profound technological revolutions aren't one-way streets to prosperity. |
AI Technology Productivity | |
| 2025 Q3 |
AIAI-driven demand for electricity to power data centers boosted utilities sector performance. Strong demand for AI processors supported Taiwan Semiconductor Manufacturing's 23% quarterly gain. Tech firms continued spending on building data centers amid AI-related growth. |
Data Centers Semiconductors Electricity Processors Infrastructure |
AerospaceCommercial aerospace supply chains have eased and demand for widebody jets has picked up, reflecting global recovery in air traffic. Boeing remains the fund's largest overweight despite ongoing production issues, with improved quality and on-time deliveries noted by airline customers. |
Commercial Aviation Supply Chains Air Traffic Production Airlines | |
Energy TransitionGE Vernova is well positioned amid global push toward electrification and decarbonization, including supplying increased power needs due to generative AI. The company is a global leader in electric power industry with gas turbines for electricity generation. |
Electrification Decarbonization Power Generation Gas Turbines Electric Power | |
DividendsFund focuses on companies with favorable prospects to sustainably pay and grow dividends over time. Investment philosophy believes companies with history of growing dividends demonstrate superior risk-adjusted returns over market cycles. |
Dividend Growth Sustainable Payments Risk-Adjusted Returns Capital Return Income | |
| 2025 Q2 |
AIThe fund benefited from AI-driven demand across multiple sectors. Taiwan Semiconductor Manufacturing gained 23% amid strong demand for AI processors as tech firms continued spending on data centers. The utilities sector was boosted by AI-driven demand for electricity to power data centers. The transformative potential of generative artificial intelligence drove outperformance in technology and communication services sectors. |
Data Centers Semiconductors Technology Processors Infrastructure |
DividendsThe fund's core strategy focuses on companies with favorable prospects to sustainably pay and grow dividends over time. The manager believes companies with a history of growing dividends demonstrate superior risk-adjusted returns over market cycles. Energy sector positioning emphasizes corporate policies about returning capital to shareholders through dividends and stock buybacks. |
Dividend Growth Capital Return Buybacks Sustainable Risk-Adjusted | |
AerospaceThe fund maintains significant exposure to commercial aerospace, particularly Boeing as the largest overweight position. Supply chains have eased and demand for widebody jets has picked up reflecting global air traffic recovery. Boeing is working to resolve production issues while airline customers report improved quality and on-time deliveries. The company raised $24 billion in capital to strengthen its balance sheet. |
Boeing Commercial Aviation Supply Chain Air Traffic Production | |
Energy TransitionGE Vernova represents a meaningful overweight as a global leader in electric power industry making gas turbines for electricity generation. The company appears well positioned amid the global push toward electrification and decarbonization, including supplying increased power needs due to generative AI advent. The positioning reflects the ongoing energy transition dynamics. |
Electrification Decarbonization Gas Turbines Power Generation Grid | |
SemiconductorsTaiwan Semiconductor Manufacturing was a key contributor gaining 23% over three months, rallying amid strong AI processor demand. The world's largest contract chipmaker raised full-year revenue growth forecasts but expressed caution about tariff policies. The fund maintains overweight positioning in semiconductors & semiconductor equipment while underweighting technology hardware overall. |
Contract Manufacturing AI Processors Revenue Growth Foundries Equipment | |
| 2025 Q1 |
AIManager views generative AI as a transformative long-term trend but has tempered enthusiasm for the AI space in the short term due to cyclical weakness. The fund reduced semiconductor exposure after DeepSeek's release raised questions about AI infrastructure spending and valuations of chipmakers. |
Artificial Intelligence Semiconductors Infrastructure Valuations Cyclical |
EnergyEnergy remains a significant overweight based on low valuations, corporate policies about returning capital through dividends and buybacks, and steady global energy consumption growth. The fund focuses on mission-critical infrastructure providers and E&P firms with low decline rates. |
Valuations Capital Return Infrastructure Production Consumption | |
AerospaceThe fund likes commercial aerospace within industrials, reflected in capital goods exposure. Supply chains have eased and demand for widebody jets has picked up reflecting global air traffic recovery. Boeing is the fund's top overweight with improved quality and deliveries. |
Commercial Supply Chain Demand Recovery Quality | |
DividendsThe fund's core mandate focuses on companies with favorable prospects to sustainably pay and grow dividends over time. The manager believes companies with dividend growth history demonstrate superior risk-adjusted returns over market cycles. |
Growth Sustainability Risk-Adjusted Returns History | |
| 2024 Q3 |
AIThe fund sees explosive growth of AI as a key advantage in semiconductors and semiconductor equipment. AI's influence was reflected in the roughly 19% advance for the utilities sector, which benefited from its key role in providing electricity needed to power massive data centers used for AI. The fund maintains notable overweights in AI-related semiconductor names like Qualcomm, Marvell Technology and Micron Technology. |
Data Centers Semiconductors Utilities Power Computing |
DividendsThe fund invests in companies with favorable prospects to sustainably pay and grow dividends over time. The manager believes companies with a history of growing dividends demonstrate superior risk-adjusted returns over the course of a market cycle. Utilities sector is highlighted as a defensive sector known for its stable earnings growth and generous dividend yields. |
Dividend Growth Income Yield Capital Return Sustainable | |
EnergyThe energy sector remains an overweight based on low valuations, companies' policies about returning capital to shareholders through dividends and stock buybacks, and steady albeit slow growth in global energy consumption. The fund focuses on mission-critical infrastructure providers and exploration & production firms with low decline rates and predictable capital spending policies. |
Oil Natural Gas Pipelines Exploration & Production Infrastructure | |
AerospaceThe fund likes the commercial aerospace area of industrials, reflected mainly in the capital goods segment. Supply chains in the group have eased and demand for widebody jets has picked up, reflecting a global recovery in air traffic. Boeing is a key holding despite recent struggles, as the manager believes the company could see better times once it works through regulatory issues. |
Commercial Aviation Boeing Air Traffic Supply Chains Capital Goods | |
UtilitiesUtilities is another sector the fund overweighted during the quarter, viewed as a defensive sector known for stable earnings growth and generous dividend yields. The sector has attracted attention because of projected rise in demand for power required by computing involved in generative AI. Vistra and Exelon were the fund's largest overweights in utilities. |
Power Generation Defensive Electricity Grid Stable Earnings | |
| 2024 Q2 |
AIThe fund is focused on following the implications of the generative AI revolution for the U.S. economy, believing it could result in an expanded upgrade cycle for PCs and smartphones that incorporate new AI capabilities. The explosive growth of AI is seen as a key advantage for chip-related stocks, with positions in companies like Nvidia, Micron Technology, Qualcomm, and Samsung Electronics to leverage this opportunity. |
Generative AI Semiconductors Upgrade Cycle Computing Chips |
SemiconductorsThe semiconductors & semiconductor equipment segment was a significant overweight in the portfolio despite a slight underweight in the broader information technology sector. The fund sees the explosive growth of AI as providing key advantages for chip-related stocks, with notable overweights in Marvell Technology, Micron Technology, Broadcom and Nvidia. |
Chip Equipment Memory Graphics Chips Foundries Semi Equipment | |
AerospaceThe fund likes the commercial aerospace area of industrials and carried a meaningful overweight as of June 30. Although aerospace has lagged in recovering from COVID-19, supply chains have eased and demand for wide-body jets has picked up, reflecting a global recovery in air traffic. Notable holdings include Boeing, GE Aerospace, Spirit AeroSystems Holdings and Howmet Aerospace. |
Commercial Aviation Wide-body Jets Supply Chains Air Traffic Recovery | |
EnergyThe portfolio had a large overweight in energy at quarter end, with individual positions including Exxon Mobil, Energy Transfer and Tidewater. The investment thesis centers on global demand for crude oil and natural gas continuing to grow while supply is constrained, with new sources most likely coming from deep-water projects. Energy firms are also appreciated for their proactive capital return through dividends and stock buybacks. |
Crude Oil Natural Gas Deep-water Capital Return Supply Constraints | |
UtilitiesUtilities was another sector the fund overweighted during the quarter, viewed as a defensive sector with stable earnings growth and generous dividend yields. The sector has attracted attention due to projected rise in power demand required by computing involved in generative AI. Largest positions included Vistra, NextEra Energy and Edison International. |
Power Demand Defensive Dividend Yields AI Computing Stable Earnings | |
DividendsThe fund's core investment philosophy centers on companies with favorable prospects to sustainably pay and grow dividends over time. The manager believes companies with a history of growing dividends demonstrate superior risk-adjusted returns over the course of a market cycle, with energy firms particularly noted for being proactive about returning capital through dividends and stock buybacks. |
Dividend Growth Capital Return Risk-adjusted Returns Sustainable Payments Market Cycle |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | Zach C Turner | GOOGL | Alphabet Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cashflow, cloud, monetization | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | 000660 KS | SK Hynix Inc | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, Capacity, Memory, Pricing, semiconductors | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | PAYC | Paycom Software Inc | Industrials | Human Resource & Employment Services | Bull | New York Stock Exchange | AI, HCM, Margins, Recurring, Software | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | AAPL | Apple Inc | Information Technology | Technology Hardware, Storage & Peripherals | Neutral | NASDAQ | Competition, consumer, Hardware, services, valuation | Login |
| Feb 8, 2026 | Fund Letters | Zach C Turner | GEV | GE Vernova Inc | Industrials | Heavy Electrical Equipment | Bull | New York Stock Exchange | backlog, cashflow, Decarbonization, Electrification, Grid, infrastructure, Margins, services, Turbines | Login |
| TICKER | COMMENTARY |
|---|---|
| WDC | A sizable overweight in Western Digital (+140%) topped the list of relative contributors. In late April, the data-storage maker reported better-than-expected quarterly financial results, including higher earnings and gross profit margin. In its report, management said brisk demand for the firm's storage solutions for AI capabilities contributed to the solid quarter. Also, the company raised its financial guidance. Western Digital and Seagate Technology, both highlighted earlier as contributors, were also large overweights as of June 30. |
| STX | Shares of Seagate Technology gained about 147% the past three months. Seagate is one of the world's largest producers of digital storage and, along with Western Digital, one of two dominant makers of hard-disk drives. Exploding demand for HDDs used in AI-capable data centers has led to surging sales and strong pricing power for the company. In its most recent quarterly filing in April, Seagate reported revenue, earnings and profitability that all exceeded consensus expectations, while raising financial guidance. Western Digital and Seagate Technology, both highlighted earlier as contributors, were also large overweights as of June 30. |
| 000660.KS | We'll also mention SK Hynix, an out-of-benchmark position that gained about 216% in the fund. Management of the South Korean semiconductor manufacturer and memory chip provider reported standout Q1 financial results, including record revenue, reassuring market participants that the AI-related semiconductor boom remained firmly intact. Demand for high-bandwidth memory continued to outstrip supply, supporting management's expectation for sustained pricing strength and profit growth. |
| MU | Micron Technology Inc was listed among the largest contributors versus benchmark with a relative contribution of 64 basis points and an average relative weight of 0.52%. |
| TSM | Among companies positioned to benefit from AI, Taiwan Semiconductor Manufacturing – an out-of-benchmark holding – was the fund's largest active position at quarter end. Top individual overweights at midyear were Taiwan Semiconductor Manufacturing, Western Digital and Boeing. In addition to Taiwan Semi, the largest non-benchmark positions included SK Hynix, Allison Transmission Holdings and British American Tobacco. |
| AMD | Advanced Micro Devices (+186%) was the largest relative detractor for the period. AMD competes in many markets with Nvidia, which we preferred and has outperformed AMD in many recent quarters. Also, AMD pays no dividend, whereas Nvidia does. The past three months, though, AMD had by far the better return, aided by better-than-expected earnings for Q1 that were driven by accelerating demand for AI infrastructure. Other tech underweights of note included Apple, Advanced Micro Devices, Intel, Applied Materials and Lam Research. |
| BA | A key holding here is Boeing, a major overweight at quarter end. Although the company is still working to resolve some longstanding production issues, Boeing's backlog was down to 10.6 years at the end of 2025, from 17.2 years in 2024. All told, we are anticipating better times for Boeing. Top individual overweights at midyear were Taiwan Semiconductor Manufacturing, Western Digital and Boeing. |
| ALSN | Allison Transmission Holdings was another meaningful overweight at the end of June. This provider of automatic transmissions for medium- and heavy-duty vehicles has continued to benefit from accelerating industrial activity, driven by federal support for infrastructure and onshoring. In January, the company completed a major acquisition with the purchase of the Off-Highway Drive & Motion Systems business of Dana Incorporated, a leading provider of drivetrain and propulsion solutions. We like the prospects for this acquisition. In addition to Taiwan Semi, the largest non-benchmark positions included SK Hynix, Allison Transmission Holdings and British American Tobacco. |
| MSFT | Within technology, the portfolio held a relatively light representation in the software & services industry, where Microsoft was a noteworthy underweight. |
| AAPL | Other tech underweights of note included Apple, Advanced Micro Devices, Intel, Applied Materials and Lam Research. The three biggest underweights were Apple, Amazon.com and Tesla. |
| NVDA | AMD competes in many markets with Nvidia, which we preferred and has outperformed AMD in many recent quarters. Also, AMD pays no dividend, whereas Nvidia does. |
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