Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Downing Fox delivered another year of solid absolute returns in 2025 but lagged relative performance due to their diversified, multi-strategy approach during a year that favored concentrated bets on mega-cap stocks and AI. The fund's commitment to small and mid-cap exposure, while providing better long-term opportunities, created headwinds as two-speed markets saw large-caps significantly outperform smaller companies. Value investing showed signs of recovery with managers like Sean Peche delivering strong returns, while quality investing faced continued challenges though valuations became more attractive. The manager maintains conviction in their fox-like diversification strategy versus hedgehog-like concentration, believing current positioning offers superior risk-adjusted returns over time. Key risks include continued large-cap dominance and market concentration, while catalysts include potential style rotation and reversal of mega-cap outperformance. The fund manages £346m in assets with healthy growth prospects, and the manager remains personally invested while planning to add more capital, expressing confidence that their approach will prove superior when market dynamics eventually shift.
Downing Fox employs a survive-first, thrive-second philosophy through intelligent diversification across multiple investment strategies, avoiding reliance on any single big trend while maintaining exposure to small and mid-cap opportunities that offer better long-term risk-adjusted returns than overvalued mega-caps.
The manager expects continued challenges if mega-caps keep outperforming but believes the fund is well-positioned for when large-cap dominance reverses. He maintains personal investment in the funds and plans to add more capital, expressing confidence in the long-term strategy despite near-term headwinds.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | NVDA | active management, diversification, global, Multi-Strategy, Quality, small caps, Uk, value | - | The fund maintains significant exposure to small and mid-cap companies, which has been a drag on relative performance as markets favored large-caps. The manager believes… |
| 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 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||