| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 22.61% | 14.26% | 6.48% |
The 1290 Avantis U.S. Large Cap Growth Fund delivered a strong absolute return in Q2 2026 but underperformed its Russell 1000 Growth Index benchmark. The fund invests in large-cap U.S. growth companies identified by high book-to-price ratios or Russell 1000 Growth Index membership, with an emphasis on profitability and valuation metrics. During the quarter, U.S. stocks rebounded strongly from a weak first quarter, with growth stocks outperforming value across all capitalization categories and small-cap growth leading performance. However, the fund's overweight to companies with the strongest valuation metrics detracted from relative performance, as companies with weaker valuation characteristics meaningfully outperformed during the period. This created a headwind for the fund's value-oriented approach within its growth mandate. The fund maintained its disciplined focus on profitability and book-to-market characteristics despite the near-term performance drag. Key risks include market volatility, equity fluctuations, large-cap responsiveness challenges, investment style risk, and concentration risk from the fund's non-diversified approach.
The fund seeks to invest in large-cap U.S. growth companies with strong valuation characteristics, specifically targeting securities with relatively high book-to-price ratios or Russell 1000 Growth Index membership that are expected to deliver higher returns through superior profitability and valuation metrics.
No explicit forward outlook provided in the letter.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 22 2026 | 2026 Q2 | - | growth, large cap, United States, valuation, value | - | The fund underperformed its benchmark in Q2 2026 despite strong absolute returns as its emphasis on valuation metrics backfired. While growth stocks broadly outperformed, companies with weaker fundamentals led the rally, creating a headwind for the fund's quality-focused approach. The manager maintained overweight positions in high book-to-market and profitability names, staying disciplined despite near-term underperformance in a momentum-driven market favoring lower-quality growth. |
| May 13 2026 | 2026 Q1 | - | Book-to-market, energy, growth, large cap, value | - | The fund outperformed its benchmark despite declining 6.81% in Q1 2026, benefiting from energy sector overweights driven by its book-to-market and profitability screening approach. Mixed results across quality quartiles created some headwinds, but avoiding the lowest-quality growth stocks helped relative performance as value outperformed growth broadly. |
| Jan 30 2026 | 2025 Q4 | - | Book-to-market, growth, large cap, Mega Cap, Outperformance, value | - | The fund outperformed in Q4 by overweighting large-cap growth companies with strong book-to-market and profitability metrics, which led the quarter. However, underweight exposure to mega-cap stocks detracted from both quarterly and annual performance as the largest companies significantly outperformed smaller segments throughout 2025. |
| Nov 5 2025 | 2025 Q3 | - | growth, large cap, US, valuation, value | - | The fund delivered strong 9.33% absolute returns in Q3 but lagged its benchmark as weaker-quality growth stocks outperformed higher-quality names. The strategy's emphasis on book-to-market and profitability metrics detracted when the market favored lower-quality growth companies, while an underweight to mega-caps also hurt relative performance during the quarter. |
| Jul 27 2025 | 2025 Q2 | - | growth, large cap, Performance, Underweight, valuation | - | The fund posted strong 15%+ returns in Q2 but lagged its benchmark due to underweights in low-quality, mega-cap stocks that led the market rally. The disciplined valuation-focused approach created headwinds as momentum favored companies with weaker fundamentals, though healthcare underweight and REIT exclusion provided modest offsets. |
| Mar 31 2025 | 2025 Q1 | TSLA | Book-to-market, growth, large cap, profitability, value | - | The fund outperformed in Q1 by systematically underweighting low-quality growth stocks with poor book-to-market and profitability metrics. Tesla's underperformance was the largest contributor given the fund's underweight position. The strategy's focus on fundamental quality over momentum proved effective as value characteristics outperformed within the large-cap growth universe. |
| Dec 31 2024 | 2024 Q4 | - | Book-to-market, growth, large cap, profitability, value | - | The fund delivered 5% returns in Q4 but underperformed due to its systematic avoidance of the lowest-quality growth stocks, which paradoxically outperformed. The strategy's focus on higher book-to-market and profitability characteristics within growth stocks created headwinds as markets favored the weakest fundamental metrics during the quarter. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
GrowthGrowth stocks outperformed value stocks across all capitalization categories in Q2 2026, with small-cap growth stocks being top performers. The fund invests primarily in large-cap U.S. growth companies identified by high book-to-price ratios or Russell 1000 Growth Index membership. However, the fund's emphasis on valuation metrics detracted from performance as companies with weaker valuation metrics meaningfully outperformed those with stronger metrics during the period. |
Growth stocks Valuation metrics Book-to-market Profitability |
ValueThe fund maintains an overweight to companies with the highest book-to-market and profitability characteristics, which are traditional value metrics. This positioning detracted from relative performance during the quarter as companies with the weakest valuation metrics outperformed. The fund's value-oriented approach within the growth mandate created a headwind in an environment favoring lower-quality growth names. |
Book-to-market Profitability Valuation Value metrics | |
| 2025 Q4 |
Small CapsSmall-cap equities ended 2025 on a positive but volatile note with the Russell 2000 Value returning 3.3% for Q4 and 12.6% for the full year. The manager sees an increasingly constructive outlook for small-cap value entering 2026, driven by Federal Reserve monetary easing, improving earnings momentum, and attractive relative valuations. Small caps trade at approximately 16x forward earnings compared to 21x for large caps, representing a 30% discount. |
Russell 2000 Valuations Earnings Volatility Value |
ValueThe manager emphasizes that value-oriented stocks remain attractively positioned within small caps. Growth stocks continue to trade at a meaningful premium to value across most valuation measures. Historically, periods of accelerating profits have favored value leadership, particularly within smaller-cap universes. The current portfolio trades at 12.2x forward earnings versus 15.0x for the Russell 2000 Value. |
Growth Premium Valuations Leadership Earnings Premium | |
RatesThe Federal Reserve's shift toward monetary easing represents an important inflection point for smaller companies, which tend to be more sensitive to changes in interest rates and credit conditions. The Fed cut rates twice in Q4 to the current range of 3.50% to 3.75%. Lower borrowing costs should support refinancing activity, capital investment, and margin recovery for small-cap companies. |
Federal Reserve Monetary Policy Credit Borrowing Refinancing | |
EarningsConsensus expectations point to a meaningful acceleration in small-cap earnings in 2026, with growth projected in the low-to-mid teens and exceeding that of large-cap companies. This anticipated rebound reflects easier year-over-year comparisons, improving operating leverage, and broadening demand across cyclical and value-oriented sectors. Earnings growth is no longer narrowly concentrated in mega-cap AI companies but is beginning to broaden across the market. |
Growth Acceleration Operating Leverage Broadening Cyclical | |
EnergyStrong stock selection and favorable allocation within Energy made the sector the second-largest contributor to relative performance. Helmerich & Payne led gains benefiting from improving drilling activity, disciplined capital allocation, and strong operational execution. Cottera Energy also added meaningfully, supported by stable production levels and favorable commodity pricing dynamics. |
Drilling Capital Allocation Production Commodity Pricing Operational | |
| 2025 Q3 |
GrowthThe fund focuses on large-cap growth companies with high book-to-market ratios. Growth stocks significantly outperformed value stocks among large caps during the quarter, though companies with stronger valuation metrics underperformed the broad large-cap growth index. |
Growth Large Cap Valuation |
ValueThe portfolio emphasizes valuation metrics including book-to-market and profitability characteristics. Companies with weaker valuation metrics outperformed those with stronger metrics during the quarter, causing the fund's value-oriented approach to detract from relative performance. |
Value Book-to-market Profitability | |
| 2025 Q1 |
ValueValue stocks outperformed growth counterparts across the capitalization spectrum during the quarter. Returns in the large-cap growth segment favored companies with the highest book-to-market characteristics, which delivered slight gains while lower book-to-market companies declined. |
Book-to-market Value Profitability Growth |
| 2024 Q4 |
GrowthThe fund focuses on large-cap growth stocks, specifically targeting companies with high book-to-market ratios and membership in the Russell 1000 Growth Index. Growth stocks outperformed value counterparts across the capitalization spectrum during the quarter. |
Growth Stocks Russell 1000 Large Cap Book-to-Market Profitability |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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| TICKER | COMMENTARY |
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