| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.6% | 3.8% | 23.8% |
| 2025 | 2024 |
|---|---|
| 23.8% | 9.4% |
The Hotchkis & Wiley Global Value Fund outperformed benchmarks in Q4 2025, returning 3.8% versus 3.1% for the MSCI World Index. The fund's core thesis centers on exploiting valuation disparities between highly concentrated market leaders and the broader opportunity set. While the MSCI World trades at nearly 23x forward earnings in the 89th percentile since 1995, the portfolio trades at 13x forward earnings. The fund increased exposure to software companies like Workday and Salesforce, viewing AI as a tailwind rather than headwind for application software vendors. Healthcare remains overweight given its 14% discount to the broad market despite historically trading at a premium. The fund reduced financials exposure after strong performance, particularly in non-US markets where the sector returned 60% in 2025. Key contributors included Alphabet, Warner Bros. Discovery, and Ericsson, while F5 Inc. faced headwinds from a cybersecurity breach. Management remains optimistic about positioning relative to an expensive broad market.
The fund focuses on attractive value opportunities outside the highly concentrated market leadership, trading at 13x forward earnings while the broad market trades at elevated multiples with little margin of safety.
We remain optimistic about the portfolio's positioning and prospects, particularly relative to the broad market which we view as expensive.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 29 2026 | 2025 Q4 | AIG, BNP.PA, CMCSA, CRM, ELV, ERIC, FFIV, FISV, GEHC, GOOGL, UNH, USB, WBD, WDAY | AI, financials, global, healthcare, software, technology, valuation, value | - | The portfolio trades at 13x forward earnings and less than 10x normal earnings, representing attractive valuations relative to the broad market. The fund focuses on… |
| Oct 28 2025 | 2025 Q3 | CMCSA, ELV, GOOG, JDEP NA, WBD, WPP LN | Cloud Computing, Communication Services, Growth Stocks, semiconductors, tariffs | - | AI: AI infrastructure spending in semiconductors, hardware, and cloud drove earnings and performance leadership. Trade: Global equities advanced despite tariff risks and policy uncertainty, with… |
| Jul 27 2025 | 2025 Q2 | BAB LN, ELV, JPED NA, KHC, NOV, UNH | Balance Sheets, Discipline, free cash flow, valuation, value | - | The commentary highlights global value opportunities amid market volatility and growth-stock concentration. Attractive valuations, strong balance sheets, and sustainable free cash flow are emphasized as… |
| Mar 31 2025 | 2025 Q1 | BAB LN, CVS, GOOG, SEI GR, WDAY, WPP | - | - | - |
| Dec 31 2024 | 2024 Q4 | 005930 KS, CVS, ELV, FFIV, GM, GOOGL | - | - | - |
| Sep 30 2024 | 2024 Q3 | 005930 KS, FFIV. ERIC, GOOG, QAN AU, WLN FP | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Trade |
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ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| AIG | Property and casualty insurer American International Group (AIG) reported better-than-expected earnings, with strong expense management and share repurchases offsetting a weakening pricing environment. Shares also benefited from reports that fellow insurer Chubb is exploring a potential acquisition of the company. |
| BNP.PA | Paris-based bank serving commercial, retail, investment, private and corporate banking services internationally |
| CMCSA | Within the portfolio, stocks like AutoZone, Comcast, and Zoetis were all punished for having perceived headwinds to already lowered expectations for growth. |
| CRM | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| ELV | The holdings in Applied Materials, Elevance Health, LVMH and Anheuser-Busch InBev were exited |
| ERIC | Ericsson is one of the largest vendors of hardware and software needed to operate wireless networks outside China. Ericsson's earnings are below normal as demand for wireless equipment is low in Japan and India. Management is turning around its mismanaged Cloud Software and Services business. We believe valuation is attractive even if Ericsson's competitors do not lose market share due to political or scale problems, but there is substantial additional upside if these possible outcomes occur. Ericsson's stock outperformed as the company signaled a pivot towards returning more capital to shareholders and 3Q25 results were modestly better than expected: company gross margins and the Cloud Software and Services business continued to improve. |
| FFIV | F5 Inc. is a global provider of application delivery, security, and performance solutions that help enterprises run and protect applications across hybrid and multi-cloud environments. Shares fell after the company disclosed that state-backed hackers from China had breached its networks and gained access to certain files from the company's BIG-IP application services. While the direct impact of the breach has been limited – no sensitive customer data was leaked and F5's operations were not impacted – management expects a modest impact to new bookings in the near term as customers are currently focused on evaluating the security posture of existing IT assets rather than buying new products. In response to the breach, F5 offered weak guidance for next quarter, and consensus earnings expectations have declined 7% for 2026 relative to pre-breach levels. While the breach may have a near-term impact on profit growth, our research suggests that the impact of security breaches at similar IT vendors have been short-lived and have very rarely led to impairment of long-term earnings power. Also, F5's strong free cash flow, net cash balance sheet, and high switching costs should help protect the company from any near-term impacts to bookings that may occur this year. We believe F5 should be able to grow revenue in the high-single-digits for many years given the strong tailwinds the company is seeing related to data center modernization and application traffic growth and limited competition in its core markets. Now trading at about 10x our estimate of next year's normal operating profit, F5's shares offer a very attractive risk/reward outlook, in our opinion. |
| FISV | Fiserv is a financial technology company that provides payments and other solutions to merchants and financial institutions. The company's scale, diversification, and ability to compound earnings at a double-digit rate make current valuation attractive. There was a sharp reset in Q3, with the FY25 outlook cut materially after a large miss versus expectations concentrated in the Financial Solutions segment, where both topline growth and profitability disappointed. While 2026 guidance has not been formally introduced, the new CEO framed FY26 as a transition year that resets the long-term growth algorithm to a lower baseline. Once earnings stabilize, we believe Fiserv offers a combination of strong topline growth, margin expansion, and cash generation. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| UNH | We also added back a full position in UnitedHealth |
| USB | Select holdings in banking (US Bank) detracted from returns |
| WBD | Warner Bros Discovery (WBD) was the top contributor during the quarter. The U.S.-headquartered media company's stock price surged as multiple parties submitted offers to acquire all or part of the business. Following several rounds of bidding, WBD announced an agreement to sell its Streaming and Studios business to Netflix, while spinning the Global Networks business to shareholders. Paramount Skydance subsequently made a direct $30 per share offer to shareholders for the entire company. We are pleased with the steps the WBD board has taken thus far to unlock shareholder value. We will continue to closely monitor developments as this bidding war unfolds. |
| WDAY | Finally, we have exited our relatively small position in Workday. The company's growth has decelerated the past few quarters and the Financials segment of the business (~25% of sales) is growing slower than we believe it should be. This is a company we may revisit at a later date but, for now, feel that we have better opportunities in other areas of the portfolio. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
