| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.5% | -2.8% | 1.2% |
| 2025 | 2024 |
|---|---|
| 1.2% | 18.0% |
The Akre Focus ETF returned -2.80% in Q4 2025 versus 2.66% for the S&P 500, with full-year performance of 1.23% versus 17.88% for the index. The fund's quality-focused holdings underperformed as markets favored AI-related mega caps, creating the largest performance disparity between the S&P 500 and S&P 500 Quality Index since 1999. Key detractors included software companies like Constellation Software, Roper Technologies, and CCC Intelligent Solutions, which suffered valuation compression due to AI disruption concerns. However, the manager believes these fears are overblown and that their software holdings will be enormous beneficiaries of AI, given their customer intimacy, ecosystem dominance, and proprietary data advantages. The fund successfully converted to ETF structure in October 2025, maintaining its opportunistic cash deployment approach. With earnings expectations unchanged but valuations markedly improved, the manager maintains high conviction in the portfolio's quality businesses, viewing current conditions as creating enhanced value opportunities for patient, long-term investors.
Focus on high-quality businesses with durable competitive advantages that will benefit from AI adoption, maintaining concentrated positions with long-term perspective despite short-term underperformance.
The manager expresses strong conviction in the portfolio despite recent underperformance, noting that valuations have markedly improved while earnings expectations remain unchanged. They believe their combination of high concentration, long holding periods, and fundamental analysis will continue to be advantageous in a market increasingly driven by short-term momentum.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 12 2026 | 2025 Q4 | ABNB, BN, CCC, CSGP, CSU.TO, FICO, GOOGL, KKR, MA, MC.PA, MCO, MSFT, NVDA, ORLY, ROP, TOI.TO, V | AI, Concentration, ETF, Quality, software, value | - | The manager believes AI concerns about their software holdings are overblown and that their businesses will be enormous beneficiaries of AI. They argue that much… |
| Oct 10 2025 | 2025 Q3 | CEG | AI, Compounding, ETF, software, technology | CSU CN | The fund discusses volatility from Constellation Softwares drawdown but reaffirms conviction in vertical market software and decentralized business models. Akre highlights AI as an evolutionary… |
| Jul 15 2025 | 2025 Q2 | - | Compounding, drawdowns, durability, long-term, Quality | - | The letter discusses long-term compounding driven by business quality rather than short-term valuation bounces. Management uses drawdown research to show high-quality businesses recover and compound… |
| Apr 10 2025 | 2025 Q1 | - | - | - | - |
| Jan 11 2025 | 2024 Q4 | - | - | - | - |
| Oct 14 2024 | 2024 Q3 | - | - | - | - |
| Jul 14 2024 | 2024 Q2 | - | - | - | - |
| Apr 28 2024 | 2024 Q1 | - | - | - | - |
| Oct 1 2024 | 2023 Q4 | - | - | - | - |
| Oct 19 2023 | 2023 Q3 | BN, CSGP | - | - | - |
| Nov 7 2023 | 2023 Q2 | NVDA | - | - | - |
| Apr 14 2023 | 2023 Q1 | - | - | - | - |
| Jan 2 2022 | 2022 Q4 | - | - | - | - |
| Oct 10 2022 | 2022 Q3 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
ETFsThe fund's strategy focuses on closed-end funds rather than ETFs, but operates in the broader fund ecosystem. They compare performance against closed-end fund indices and utilize various fund structures in their investment approach. |
Closed-End Funds Fund Discounts Fund Selection Alternative Structures | |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
Compounding |
||
Software |
||
| 2025 Q2 |
Compounding |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 10, 2025 | Fund Letters | John Neff | CSU CN | Constellation Software Inc. | Information Technology | Application Software | Bull | TSX | AI, compounding, growth, leadership, M&A, resilience, Software, valuation, Verticals | Login |
| TICKER | COMMENTARY |
|---|---|
| ABNB | The top five performance contributors during the fourth quarter were Airbnb |
| BN | Brookfield Corporation, headquartered in Toronto, Canada, stands as a preeminent global alternative asset manager and operator, harnessing a vast permanent capital base of over $180 billion to invest in and scale high-quality businesses across infrastructure, renewable power, private equity, real estate, and beyond. With more than $1 trillion in assets under management through its majority-owned asset management arm (Brookfield Asset Management) and a growing $135 billion insurance solutions platform, the company deploys patient, opportunistic capital into real assets that power the global economy—delivering resilient, inflation-protected returns in an era of accelerating energy transition and digital infrastructure demand. Brookfield's culture of disciplined value creation and long-term stewardship serves as its bedrock competitive moat, fostering a collaborative ecosystem where operators, investors, and entrepreneurs thrive under a unified philosophy of prudent risk-taking and operational excellence. This ethos not only attracts top-tier talent and proprietary deal flow but also amplifies the flywheel of compounding insights and relationships, positioning the firm to capitalize on market dislocations with unmatched agility and insight. We are confident that Brookfield is on track to achieve its ambitious five-year targets, supported by robust fundraising, accelerating fee-related earnings growth, and disciplined deployment of capital at attractive internal rates of return. This positions the company to deliver its stated goal of 15%+ annualized total returns for shareholders through the cycle, driven by expanding recurring fee streams, strong investment performance across its platforms, and the powerful secular tailwind of institutional investors shifting trillions of dollars into alternative assets in the coming years. Under the steady hand of CEO Bruce Flatt and a world-class management team, we are profoundly optimistic about Brookfield's positioning as a generational compounder. The company's masterful capital allocation—reinvesting float-like permanent capital into undervalued opportunities while maintaining fortress-like balance sheets—has consistently unlocked outsized value, and we believe it will continue to do so amid a favorable macro backdrop for real assets. A cornerstone of enduring quality in our portfolio, Brookfield exemplifies the rare blend of scale, sophistication, and shareholder alignment that defines exceptional businesses. |
| CCC | CCC operates a vertically integrated, mission-critical software platform for the automotive insurance ecosystem. CCC commands a monopoly like position, handling over 80% of U.S. auto claims, and leverages scale, network effects, and high customer retention to maintain its competitive edge. This enables durable high-single-digit organic growth driven by product upsells and new customer wins in a fragmented repair market. The company is also benefiting from the digitalization of more complex auto claims. We own CCC in our SMID portfolio, and we believe the market is discounting a high-quality company amid short term concerns of slower growth from new product rollouts and AI risks. In reality, CCC's AI-powered offerings have helped its core business by enhancing claims automation, accuracy, and speed. CCC implemented an accelerated share repurchase program and insiders have been buying shares in the open market to show conviction in the business. We believe the margin of safety is supported by the business's stability and a management team with a strong track record of innovation. |
| CSGP | CoStar Group is a premier information services provider to the commercial and residential real estate industries. For the last few years, we have watched the core businesses under the CoStar umbrella enjoy solid double-digit revenue growth along with consistent margin expansion. However, at the enterprise level, margins have contracted significantly due to the company's large and persistent investment in Homes.com. The results of the company's residential efforts have fallen dramatically short of its long-term expectations. |
| CSU.TO | Broad pressure on the stocks of software companies enabled us to initiate a position in Constellation Software. This is a unique business we had on our radar for a long time but were never able to purchase due to its high valuation. At its core, the company is a permanent capital vehicle designed to acquire 'vertical market software' (VMS) businesses and hold them indefinitely. |
| FICO | Notable performance detractors over the same period included Timee, Fair Isaac Corporation, and Uber Technologies. |
| GOOGL | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| KKR | Over the prior two years, KKR was one of the Fund's strongest contributors. From the end of 2022 through the end of 2024, the shares more than tripled, rising roughly 80% in 2023 and another 80% in 2024, as the market began to recognize the earnings power of its asset-management and insurance platforms. This year, the stock told a different story: in 2025 it was down about 13% and was roughly 23% below its January peak. Strip away the stock-price swings, and the business itself has continued to grow. Fee-related earnings, insurance earnings, and long-dated capital have all moved higher, even as market sentiment toward rates, credit, and capital flows into alternatives has become more cautious. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MC.PA | LVMH was supported by improving trends in Asia and the resilience of its leading brands after a period of weaker demand for luxury goods. |
| MCO | The top five performance contributors during the fourth quarter were Moody's |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| NVDA | Nvidia sits at the top of the S&P 500 as the designer in the AI ecosystem. |
| ORLY | O'Reilly Automotive Inc., a specialty retailer of aftermarket auto parts and accessories, lost -15%. Third quarter results featured better-than-expected revenues, same-store sales, and earnings; however operating expenses were higher. Do-it-for-me professional mechanic sales trends were positive while do-it-yourself (DIY) saw lower transaction levels. Management commented on tariff-driven price increases taking effect and affecting DIY demand. |
| ROP | After a decade-long partnership with Roper Technologies, we have made a strategic decision to exit our position. Roper has an exceptional track record of compounding capital. However, our decision to sell is a reflection of our commitment to maintaining a portfolio of high conviction, high growth businesses. |
| TOI.TO | Detracting from performance were holdings of Constellation Software and spinoff Topicus despite strong underlying earnings amid concerns that AI could affect their software offerings |
| V | We added to our holdings in Visa Inc. |
| 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 | |||
