| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.0% | 3.1% | 18.2% |
The Aristotle Core Equity Fund delivered strong performance in Q4 2025, returning 3.15% versus 2.66% for the S&P 500, driven by security selection in healthcare and consumer discretionary. The fund outperformed despite headwinds from AI infrastructure concerns that pressured technology holdings like Oracle. Key contributors included Guardant Health, which benefited from strong earnings and industry consolidation, and General Motors, which effectively managed tariff impacts while benefiting from potential EV tax credit elimination. The manager made strategic portfolio changes, adding APi Group, Coinbase Global, and Performance Food Group while exiting Alexandria Real Estate Equities due to weak lab real estate fundamentals and Chart Industries following its acquisition announcement. Looking ahead, the manager expects corporate profit growth exceeding 10% in 2026 as economic activity broadens beyond AI-focused capital spending. The investment approach remains focused on company-level fundamentals, seeking businesses with secular tailwinds or strong product cycles while navigating elevated valuations and mixed economic signals including moderating inflation and a softening labor market.
The fund focuses on investing in large-cap companies with secular tailwinds or strong product-driven cycles, maintaining a selective approach while navigating elevated market valuations and economic uncertainty.
The manager expects a moderately growing economy, softening job market, and moderate but sticky inflation. They anticipate corporate profit growth over 10% for 2026 driven by broadening economic activity beyond AI-focused capital. The focus will continue to be at the company level, seeking to invest in companies with secular tailwinds or strong product-driven cycles.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 6 2026 | Q4 2025 | AAPL, AMZN, APG, AVGO, COIN, GH, GM, GOOGL, JPM, MAR, META, MSFT, NFLX, NVDA, ORCL, ORLY, PFGC, TMO, TT, V | AI, earnings, Fed policy, growth, healthcare, large cap, technology, Trade | - | Artificial intelligence continued to be a major theme with more than 300 S&P 500 companies mentioning AI on their earnings calls during the fall. This… |
| Jul 19 2025 | 2025 Q2 | AVGO, BDX, CB, EXPE, ORCL, ZTS | AI, earnings, fundamentals, growth, security selection |
ORCL AVGO BDX CB EXPE ZTS |
The letter highlights security selection as the primary driver of outperformance in a growth-led market. Management favors companies benefiting from AI, cloud infrastructure, and product… |
| Mar 31 2025 | 2025 Q1 | ADI, AVGO, GH, ICE, NOW | - | - | - |
| Jan 30 2025 | 2024 Q4 | 8495 TT, AVGO, AVY, CI, CRWD, GTLS, MCHP, SPR | - | - | - |
| Sep 30 2024 | 2024 Q3 | AMAT, EL, HAL, ICE, TT | - | - | - |
| Jul 10 2024 | 2024 Q2 | ABT, ACN, APH, BSX, DAR, GOOG, MCHP, NSC, NVDA, TFX | - | - | - |
| Apr 15 2024 | 2024 Q1 | AAPL, DAR, NVDA, ZTS | - | - | - |
| Feb 26 2024 | 2023 Q4 | 0YXG LN, BDX, BMY, HAL, LLY, PEP, SPR, VRTX | - | - | - |
| Oct 19 2023 | 2023 Q3 | - | - | - | - |
| Jul 28 2023 | 2023 Q2 | ADPT, AVGO, CTLT, DIS, EL, GH, NFLX, SNPS | - | - | - |
| Mar 31 2023 | 2023 Q1 | CI, CTLT, EXPE, NSC, NVDA, PSX, ZTS | - | - | - |
| Jan 31 2023 | 2022 Q4 | AME, AR, AVGO, CTLT, GTLS | - | - | - |
| Sep 30 2022 | 2022 Q3 | BALL, CMCSA, CTLT, DAR, HAL | - | - | - |
| Mar 30 2022 | 2022 Q1 | PSX, PYPL, SPR | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| Q4 2025 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | ORCL | Oracle Corporation | Information Technology | Systems Software | Bull | NYSE | backlog, buybacks, cloud, infrastructure, Margins, Recurring, SaaS, Software | Login |
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | AVGO | Broadcom Inc. | Information Technology | Semiconductors | Bull | NASDAQ | AI, buybacks, diversification, dividend, Freecashflow, Margins, Networking, semiconductors | Login |
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | BDX | Becton, Dickinson and Company | Health Care | Health Care Supplies | Bear | NYSE | diagnostics, Funding, growth, guidance, Margins, Medtech, Policy, tariffs | Login |
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | CB | Chubb Limited | Financials | Property & Casualty Insurance | Bear | NYSE | Capital, Insurance, Margins, premiums, Pricing, Rotation, underwriting, valuation | Login |
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | EXPE | Expedia Group, Inc. | Consumer Discretionary | Hotels, Resorts & Cruise Lines | Bear | NASDAQ | Competition, Cyclical, Demand, Margins, recession, tariffs, Travel, Volatility | Login |
| Jul 19, 2025 | Fund Letters | Owen Fitzpatrick | ZTS | Zoetis Inc. | Health Care | Pharmaceuticals | Bear | NYSE | Animalhealth, Competition, Demand, growth, Margins, portfolio, Pricing, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| AAPL | AAPL shares rose in 4Q25 following better-than-feared iPhone 17 sell-through trends and stronger Services momentum. The company reported that early adoption of its on-device AI features exceeded internal expectations, particularly in North America and Europe, where attach rates for Pro models remained elevated. Wearables also returned to growth, helped by new health features and improved battery life. |
| AMZN | This quarter, we took profits in our hyperscaler portfolio companies (Amazon and Google) and increased our position in NVIDIA. |
| APG | APi Group Corp. (APG), a leading provider of fire and life safety, security, elevator and escalator, and specialty services, was a top contributor in the SMID Cap strategy this quarter. APG delivered record third-quarter results, with revenues up 14% (10% organic) and Adjusted EBITDA +15%. The company continued to execute its inspection-first strategy, delivering its 21st consecutive quarter of double-digit inspection growth in North America. |
| AVGO | During the quarter, we initiated a below-average weight position in leading semiconductor and infrastructure software company Broadcom. Broadcom's ongoing transformation from a provider of custom ASICs to a full rack-scale solutions vendor, including scale-up networking, marks a significant improvement in its strategic positioning compared to earlier in the year. This strategic evolution has been validated by recent product launches, such as the Scale-up Ethernet solution, and committed orders from major customers like Anthropic. |
| COIN | Coinbase (a new position) experienced extended volatility as crypto currency prices softened into December. We continued to build exposure to our financial deregulation and disintermediation of financial services theme through the purchase of Coinbase, to gain exposure to the regulated infrastructure of cryptocurrencies - particularly stablecoins - following the passage of the GENIUS Act by Congress. |
| GH | Guardant Health, a provider of blood-based diagnostic tests for cancer, performed particularly well, driven by strong Q3 results. Its core oncology business grew revenues 30% vs. 20% in the previous quarter, an acceleration driven by innovative product enhancements. Furthermore, its colon cancer screening tests continued to perform well, growing 50% sequentially from Q2. While shares were up significantly in 2025, we remain bullish on the business, as Guardant continues to lead the charge in converting oncology testing from tissue to blood. |
| GM | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Motors |
| 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. |
| JPM | JPMorgan (JPM) has identified 42 AI-related stocks in the S&P 500, which today represent 45% of the index's market cap. They estimate that these stocks have accounted for 78% of S&P 500 returns, 66% of earnings growth, and 71% of capital spending growth since ChatGPT launched in November 2022. As it relates to the impact on the U.S. economy, JPM estimates tech sector capital spending contributed 40%-45% of U.S. GDP growth through the first 9 months of the year, up from less than 5% during the same period in 2023. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| NVDA | Capital spending from Google, Microsoft, Amazon, Meta, OpenAI, and more have led to Nvidia becoming the Rrst 5 trillion market cap company. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| ORLY | O'Reilly Automotive detracted from performance in the fourth quarter of 2025. Although the company exceeded consensus expectations when the company reported its third quarter results at the end of October, comments on the weakening do-it-yourself (DIY) business were a concern. Inflation, which has largely been driven by tariffs, is weighing on the DIY portion of the business. The professional business, which is much larger than the DIY business, remains strong. The company is increasing the pace of new store openings in 2026. |
| PFGC | New to the portfolio this quarter was Performance Food Group Co., a food products distributor. Its customers include restaurants, businesses, schools, healthcare facilities, big-box retailers, theaters, and convenience stores. |
| TMO | Thermo Fisher Scientific was a strong contributor with 8.69% ending weight and 1.47% contribution. |
| TT | TT continued to be a juggernaut, in our view, as earnings and backlog remained strong. AI data center cooling was a strong contributor while its residential HVAC business is experiencing weakness as the industry changes over to a new refrigerant. |
| V | We added to our holdings in Visa Inc. |
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