| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.2% | -9.4% | -9.4% |
Emerald Wealth Partners' Growth Equity Strategy declined 9.4% net in Q1 2026, outperforming technology benchmarks during a challenging quarter marked by AI disruption fears and geopolitical volatility from the Iran war. The portfolio benefited from semiconductor equipment holdings while software stocks were a drag due to AI displacement concerns. The manager used volatility strategically, trimming semiconductor winners and adding to beaten-down quality names like Booking.com at attractive valuations. The firm maintains conviction that enterprise software companies with deep IT integration and mission-critical data management will benefit from AI rather than be disrupted, as meaningful Agentic AI deployment remains 1-2 years away. Key holdings include Fortinet in cybersecurity, Broadcom for AI infrastructure, and ServiceNow for IT service management. The Iran war adds near-term uncertainty but creates opportunities for patient investors focused on quality. The strategy emphasizes bottom-up research and investing in quality growth at the right price, particularly suited for the volatile environment ahead.
Focus on quality growth companies that are well-positioned to benefit from AI adoption rather than be disrupted by it, particularly those with deep enterprise integration and mission-critical data management capabilities.
The next few quarters are unlikely to give investors much respite given the growing list of disruptions. The Iran war will drive market moves short-to mid-term, but for growth investors, AI-related positioning is more important long-term. The focus will be on deepening understanding of holdings while watching financial conditions carefully.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 31 2026 | 2026 Q1 | AVGO, BKNG, FTNT, NOW, ORCL, SAP | AI, cybersecurity, Enterprise, growth, semiconductors, software, technology |
FTNT AVGO NOW ORCL SAP |
Growth equity strategy down 9.4% in volatile Q1 marked by AI fears and Iran war. Manager trimmed semiconductor winners, added beaten-down software quality at attractive valuations. Maintains conviction that enterprise software with deep IT integration benefits from AI rather than faces disruption. Focus on quality growth companies positioned for long-term AI adoption cycle. |
| Jan 14 2026 | 2025 Q4 | 0700.HK, 6857.T, 8035.T, AAPL, AMZN, ASML, AVGO, AZN.L, BABA, FTNT, GOOGL, META, MSFT, NOW, NVDA, ORCL, TMO, TSM | AI, China, Cloud, cybersecurity, growth, infrastructure, semiconductors, technology | - | Emerald delivered 16.0% net returns in 2025 led by semiconductor equipment stocks. The manager strategically positioned for AI infrastructure growth while re-entering Chinese technology through Alibaba and Tencent following regulatory environment improvements. Despite AI bubble concerns and passive investing distortions, they maintain conviction in quality companies with strong moats, believing bottom-up research will capitalize on long-term transformation opportunities. |
| Sep 30 2025 | 2025 Q3 | 1211.HK, 8035.T, AMAT, AMZN, ASML, AVGO, CRM, DDOG, ENTG, FTNT, GOOGL, INTU, LSEG.L, MDT, MSFT, NOW, ORCL, SAP, TMO, ZS | AI, Bubble, Cloud, growth, infrastructure, semiconductors, technology | - | Growth Equity Strategy gained 4.3% in Q3 driven by AI infrastructure winners Oracle, Broadcom, and ASML. Oracle's transformational cloud growth positions it among tech giants with $455B contracted revenue. AI bubble risks are rising with 40-100% gains across tech plays, but long-term adoption opportunities continue expanding. Portfolio rebalanced through trimming winners and adding Medtronic and BYD. |
| Jun 30 2025 | 2025 Q2 | - | AI, earnings, Economic Growth, Fed policy, rates, small caps, technology | - | Markets hit new highs in Q3 driven by Fed rate cuts, AI investment momentum, and broadening leadership to small caps. The Russell 2000 surpassed 2021 highs while technology spending grew 14% year-over-year on AI buildout. Looking ahead, markets are positioned for a soft landing scenario though tight credit spreads and expensive AI valuations present risks. |
| Mar 31 2025 | 2025 Q1 | - | Fed policy, inflation, Market Commentary, tariffs, Trade Policy, volatility | - | Trade policy volatility dominated 2025's first half, driving dramatic market swings between Q1 selloff and Q2 rebound. Despite tariff uncertainty causing inflation expectations to rise, actual inflation remained subdued. The S&P 500 ended the half up 6.1% after fully reversing Q1 losses, suggesting markets view tariff impacts as modest and temporary. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI presents both disruptive risk and opportunity for software players, with selectivity being crucial. Enterprise AI adoption remains at an early stage with meaningful deployment unlikely before 2027-2028. Software deeply integrated into IT systems and managing mission-critical data will benefit from AI agents rather than be disrupted. |
Enterprise Software Agentic AI Software Integration AI Adoption Mission Critical |
CybersecurityGrowing cybersecurity risks and increasing complexity create a push towards security platforms. Fortinet's integrated product approach is resonating with customers, particularly in the SMB segment and increasingly with larger enterprises. AI enhances threat detection capabilities. |
Security Platforms SMB Enterprise Security Threat Detection Network Effects | |
SemiconductorsSemiconductor equipment stocks were the best performers in Q1. The fund trimmed positions in Applied Materials and Tokyo Electron after steep rallies in late January and February. Broadcom delivered strong AI revenue guidance well above expectations. |
Semi Equipment AI Revenue Position Trimming Performance Guidance | |
Enterprise SoftwareValuations across enterprise software have roughly halved over the past six months despite healthy business results and solid growth outlooks. This represents a valuation dislocation driven by investor fears rather than fundamentals, creating entry points into high-quality names. |
Valuation Dislocation SaaS Enterprise IT Growth Outlooks Quality Names | |
| 2025 Q4 |
AIManager believes market's assessment of AI risk differs from their own, with approximately 60% of underperformance attributed to positions where AI impact concerns drove stock declines. They view AI-impacted investments as having vast addressable markets and sustainable competitive advantages, expecting valuations to expand as market perspective aligns with theirs. |
Artificial Intelligence Disruption Valuation Software Analytics |
QualityFund exclusively invests in businesses with superior characteristics including high barriers to entry, sustainable competitive advantages, and durable growth prospects. Manager notes their focus on leading businesses has been foundation of strategy since inception, though this approach was out of favor in 2025 as investors sold higher-quality investments for riskier stocks. |
Earnings Quality Competitive Advantages Margins Cash Flow | |
Small CapsStrategy of owning competitively advantaged small and medium-sized businesses remained out of favor for most of the quarter. Fund observed improvement in early December as investors showed renewed enthusiasm for high-quality small-cap stocks, with significant outperformance potential when their style comes back into favor. |
Small Cap Growth Russell 2000 Style Rotation | |
| 2025 Q3 |
AIThe AI arms race among technology companies is in full flight with massive investments in AI infrastructure. The long-term opportunity in Generative AI keeps growing as adoption rates increase and usage broadens, with 77% of companies using AI for automation patterns. However, risks are rising with more signs of an AI bubble forming. |
Infrastructure LLMs Automation Bubble Investment |
CloudOracle's cloud infrastructure growth guidance was upgraded dramatically, with Oracle Cloud potentially becoming equal to or larger than Google Cloud Platform by FY29-30. Microsoft's Azure accelerated growth to 39% driven by AI demand and digital transformation. |
Infrastructure Hyperscaler Growth Azure OCI | |
SemiconductorsASML's High NA EUV technology is key for future growth with strong competitive positioning for the next 10-15 years. Broadcom is gaining share with XPU customers and is positioned as a prime beneficiary of AI infrastructure buildout through AI chips, networking, and corporate software. |
EUV Lithography XPU Networking Equipment | |
Electric VehiclesBYD's vertically integrated supply chain provides a 15-25% cost advantage over legacy OEMs while maintaining gross margins comparable to Toyota. The company stands out as the most complete and defensible EV platform globally with expertise in electronics and batteries. |
Integration Batteries Cost Platform China | |
| 2025 Q2 |
AITechnology-related investment grew 14% year-over-year in Q2, the fastest pace since the late 1990s, driven by AI industry buildout including high-performance computer chips, cloud architecture, and data centers. Management teams across the AI supply chain report strong demand with spending plans in the hundreds of billions and order backlogs spanning years. AI enthusiasm has fueled outsized gains in technology and semiconductor stocks, though some question whether spending is outpacing potential revenue growth. |
Data Centers Semiconductors Cloud Technology |
RatesThe Federal Reserve cut interest rates by 0.25% in September after a 9-month pause, framing it as a risk management cut to keep economic expansion on track. The central bank updated its policy forecast to include two more rate cuts before year-end with potential for more in 2026. The rate cut marked a shift toward policy support and fueled optimism for a soft landing scenario. |
Monetary Policy Fed Policy Interest Rates | |
Small CapsSmall-cap stocks rallied sharply in anticipation of the Fed's rate cut, with the Russell 2000 surpassing its previous high from 2021 and returning nearly 12% in Q3. Small caps posted their biggest quarter of outperformance over the S&P 500 since Q1 2021 as investors bet that rate cuts would benefit smaller companies. |
Russell 2000 Rate Sensitivity Outperformance | |
| 2025 Q1 |
Trade PolicyTrade policy uncertainty dominated the first half of 2025, with escalating tariffs in Q1 followed by de-escalation in Q2. The administration moved from targeted tariffs on China, Canada, and Mexico to sweeping global tariffs, then shifted toward trade agreements and exemptions. Policy uncertainty remains fluid with court challenges and upcoming deadlines on tariff exemptions. |
Tariffs China Trade War Policy Uncertainty |
InflationTariff uncertainty caused inflation expectations to rise sharply despite actual inflation remaining subdued. Consumer expectations diverged significantly from trailing inflation data, with the University of Michigan survey showing rising expectations while Core CPI continued drifting lower. The debate continues whether companies will pass through tariff costs or absorb them to remain competitive. |
Expectations CPI Tariffs Consumer Pricing | |
VolatilityMarkets experienced dramatic sentiment shifts between Q1 and Q2, creating two distinctly different environments. The S&P 500 fell over 15% in Q1 due to policy uncertainty, then rebounded strongly in Q2 as tensions eased. Factor performance reversed completely, with low volatility outperforming high beta by 20% in Q1, then high beta reversing all underperformance in Q2. |
Sentiment Reversal Factor Beta Swings | |
RatesThe Federal Reserve held rates steady at 4.25%-4.50% due to trade policy uncertainty, adopting a wait-and-see approach. Markets expect gradual rate cuts beginning in September, with approximately 1.25% of cuts anticipated over the next 18 months. The 30-year Treasury yield ranged from 4.40% to 5.10% but ended the half unchanged near 4.80%. |
Fed Cuts Treasury Yield Policy |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Mar 31, 2026 | Fund Letters | Emerald Wealth Partners - Growth Equity Strategy | FTNT | Fortinet | Software - Infrastructure | Systems Software | Bull | NASDAQ | AI-Enhanced, compounder, cybersecurity, enterprise, network effects, platform, SMB, switching costs | Login |
| Mar 31, 2026 | Fund Letters | Emerald Wealth Partners - Growth Equity Strategy | AVGO | Broadcom | Semiconductors | Semiconductors | Bull | NASDAQ | AI, Asic, Enterprise software, hyperscalers, IT infrastructure, Margins, semiconductors | Login |
| Mar 31, 2026 | Fund Letters | Emerald Wealth Partners - Growth Equity Strategy | NOW | ServiceNow | Software - Application | Application Software | Bull | New York Stock Exchange | Acquisitions, AI agents, cybersecurity, Enterprise software, IT Systems, platform, Vertical Expansion | Login |
| Mar 31, 2026 | Fund Letters | Emerald Wealth Partners - Growth Equity Strategy | ORCL | Oracle | Software - Infrastructure | Systems Software | Bull | New York Stock Exchange | AI training, data centers, hyperscalers, Non-Cancelable Contracts, OpenAI, Rpo, Sublease | Login |
| Mar 31, 2026 | Fund Letters | Emerald Wealth Partners - Growth Equity Strategy | SAP | SAP | Software - Application | Application Software | Bull | New York Stock Exchange | AI agents, cloud migration, Enterprise software, Integrated Solution, Mission-Critical, S/4 Database, supply chain management | Login |
| TICKER | COMMENTARY |
|---|---|
| FTNT | The company is the leading platform-based cybersecurity vendor for small and medium-sized businesses which represents approx. 70% of the business volume. As Fortinet manages the whole security set-up through an operating system (FortiOS) and due to its deep entrenchment within its clients' IT networks, we view its business as being very sticky thanks to high switching costs. What's more, the company's Fortinet Security Fabric platform, with hundreds of partner companies, creates network effects from the deep integration in customers' networks and the growing volume of data analyzed. Growing cybersecurity risks and increasing complexity create a push towards security platforms as IT security teams, particularly from SMBs, increasingly look for platforms that offer a more holistic security coverage. Recent company results and channel checks indicate that Fortinet's integrated product approach is resonating with customers, not only with their core SMB customers but, more and more with larger enterprises. We are particularly encouraged by the recent strength in large enterprise demand. What's more, thanks to its deep integration with their customers' core IT systems and the vast data set of attack attempts optimizes its own AI to counter the growing number of threats, Fortinet only faces relatively low risks of disruption from AI. While some investors might have been expecting a bigger boost to growth rates from the move to the cloud and AI, we see FTNT more as a rock-solid and fairly steady compounder in the low- to mid-teens range at the OEPS level, which is a welcome feature in this volatile market, which is not adequately reflected in the stock's multiple. |
| AVGO | Broadcom delivered another strong quarter. While revenue and EPS both were only slightly above Street consensus, the real highlight was FY2027 guidance for AI revenues, which were well above expectations and have led to analysts upgrading their sales and profit estimates, some of them significantly. Additionally, at the latest analyst call management proactively and effectively countered investor concerns that have weighed on the stock such as margins risks, competition risks from hyperscalers building their own customer chips (ASICs) and software disintermediation. The combination of AI ASIC dominance, enterprise software durability (due to being right at the center of the IT infrastructure stack), and best-in-class margins reinforces our conviction in our investment case. Therefore, Broadcom remains a core holding to play the AI opportunity. |
| NOW | The sharp drop in the stock in the January-February period has opened a rare opportunity to acquire more of this high-quality IT stock at a steep discount to fair value. Various discussions with our experts and research partners have reinforced our view that ServiceNow is not only well protected from AI disruption, but well-positioned to benefit from the AI wave. Why? The ServiceNow platform is very broadly and deeply intertwined with enterprises' IT systems and thus will enable the deployment of AI capabilities and act as a command center for AI agents at scale – a very favorable position to be in, in our view. ServiceNow's recent acquisitions (e.g., Moveworks, Armis) and the rollout of AI-driven features (Pro Plus, Now Assist, AI Control Tower) are seen as strategic moves to not only enhancing its AI capabilities, but also driving expansion into new verticals such as security, IoT, CRM, data orchestration and governance, opening further avenues for future growth. As an additional benefit, the ServiceNow platform is becoming increasingly valuable to manage and protect against cyber risks, enabling end-to-end collaboration across tasks such as analyzing threat bulletins, assessing the attack surface, calculating risk posture, prioritizing threat response, and remediating exposure. Checks with our expert network covering IT security confirm the growing position of the company in that field. |
| ORCL | Oracle's investment thesis has been dominated by a sharp rise in its Remaining Performance Obligation (RPO, or future sales) from USD 104bn to USD 523bn in H2/2025 which were driven by AI training contracts — most notably with OpenAI. The stock today trades below its pre-announcement level, implying the large additional backlog has negative or zero value. This is irrational. While we will not deny that their large-scale investments in AI data centers for which they will take on approx. USD 80-100bn in new debt will increase risk, the additional business opportunities it creates and the large margin of safety more than compensate for it. Additionally, risks are mitigated by the fact that: (1) The backlog comprises non-cancelable contracts — clients are legally obligated to pay. (2) Data center capacity (contracted at $248bn over 15–19 years) can be sub-leased to hyperscalers in any excess capacity scenario; given the chronic shortage of powered data center space, Microsoft or others would be willing takers. |
| SAP | Rather than being disrupted by AI, as the market has been suggesting lately, we believe SAP is very well positioned to benefit from it. The mission critical nature of the software, the deep integration with customers' IT systems and comprehensive suite of products will allow SAP to naturally embed AI agents, both horizontally — through SAP Business AI and the Joule copilot — and vertically within each product across planning, execution, and network function. Beyond the long-term tailwind from AI, SAP will benefit in the coming years from a set of structural growth drivers that are specific to the company's businesses: The catch up in cloud-based products, the ongoing migration wave to the S/4data base and strong growth in Supply Chain Management (SCM) Geopolitical tensions, pandemic-era disruptions, and climate-related volatility have elevated the focus on supply chain management. SAP is uniquely advantaged to benefit from a structural, multi-year upgrade cycle in SCM because approximately 77% of its revenue derives from industries where supply chains are mission critical. Its end-to-end Supply Chain Management (SCM) suite provides a single-vendor, integrated-data-model solution that standalone best-of-breed vendors cannot replicate. We feel that the large-scale decline of the stock in 2026 is overdone. |
| BKNG | We re-allocated those funds into Booking.com, a beaten-down quality name in e-commerce. We were able to acquire those shares at multiples not seen in a long time. While the stock is likely to remain volatile for some time, we believe Booking.com will eventually be on the winning side of the AI revolution. |
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