| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.0% | 1.0% | 9.7% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 9.7% | 5.7% | 17.8% | -16.5% | 23.7% | 13.6% |
Aristotle Capital's Value Equity strategy underperformed in Q4 2025, returning 0.95% net versus 3.81% for the Russell 1000 Value Index, as security selection in Information Technology, Consumer Discretionary and Materials detracted from performance. The portfolio benefited from strong performance in Parker Hannifin, which gained from aerospace strength and the Meggitt acquisition integration, and Capital One Financial, which reported strong results following its Discover acquisition. However, Sony declined due to a one-time gaming segment charge, and Uber faced margin pressure from autonomous vehicle investments and regulatory concerns. The manager sold Commerce Bancshares, Constellation Brands, and Sony Financial during the quarter. Despite mixed economic signals including a 43-day government shutdown and AI revenue circularity concerns, corporate earnings remained robust with 13.6% S&P 500 growth. Value stocks outperformed growth by 2.69% in the quarter, though growth maintained full-year leadership. The manager maintains focus on long-term business fundamentals rather than macro timing, believing this disciplined approach best serves clients across market cycles.
Focus on individual businesses and their long-term fundamentals rather than reacting to macro headlines or timing short-term market moves, believing this careful fundamental approach remains the most reliable way to add value across a wide range of market environments.
The manager expects markets and economic conditions to continue evolving in ways that are difficult to anticipate. They maintain a cautious tone heading into 2026, noting that both the Fed and corporate management teams have adopted more cautious stances. The manager believes it remains prudent to focus on individual businesses and their long-term fundamentals rather than react to macro headlines or try to time short-term market moves.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 30 2026 | 2025 Q4 | AMGN, CBSH, COF, LEN, MRK, MSFT, PH, SONY, STZ, TDY, UBER, USB, WFC | AI, earnings, large cap, rates, Trade Policy, US, value |
SONY UBER PH COF CBSH |
Artificial intelligence continued to be a major theme with more than 300 S&P 500 companies mentioning AI on earnings calls. This enthusiasm helped propel mega-cap… |
| Oct 14 2025 | 2025 Q3 | AMP, CTVA, MLM, SNPS, WFC, XEL | Artificial Intelligence, financials, Quality, Trade, value |
SNPS US WFC US |
The fund emphasizes valuation discipline amid renewed market exuberance fueled by AI infrastructure spending and fiscal stimulus. It compares the current AI cycle to past… |
| Jul 22 2025 | 2025 Q2 | ALC SW, AMGN, MCHP, MSFT, UBER | Discipline, Margin Of Safety, normalized earnings, valuation dispersion, value |
MSFT US MCHP US AMGN US ALC SW UBER US |
The letter highlights classic value opportunities created by market concentration in growth stocks and neglect of asset-heavy businesses. Management emphasizes normalized earnings power, balance sheet… |
| Apr 10 2025 | 2025 Q1 | 6758 JP, ADBE, APD, GOOG, HON, ML FP, MRP | - | - | - |
| Jan 30 2025 | 2024 Q4 | AMP, COF, LEN, MCHP | - | - | - |
| Sep 30 2024 | 2024 Q3 | ADSK, AIG, BX, MCHP, VZ | - | - | - |
| Jul 10 2024 | 2024 Q2 | AWK, CCI, LEN, MSFT, OSK, QCOM, VLTO | - | - | - |
| Apr 15 2024 | 2024 Q1 | ADBE, CTVA, LOW, MLM, PSX, TOT CN, XEL | - | - | - |
| Jan 13 2024 | 2023 Q4 | CTVA, LEN, TDY, USB | - | - | - |
| Oct 19 2023 | 2023 Q3 | - | - | - | - |
| Jul 28 2023 | 2023 Q2 | ATVI, CCI, MLM | - | - | - |
| Mar 31 2023 | 2023 Q1 | ANSS, CFR, PYPL | - | - | - |
| Jan 31 2023 | 2022 Q4 | MRK, SUI, SYY | - | - | - |
| Feb 12 2022 | 2022 Q3 | ADBE, CFR, SONY, XYL | - | - | - |
| Jun 30 2022 | 2022 Q2 | ADSK, AMG GR, KO, MCHP, MLM | - | - | - |
| Mar 30 2022 | 2022 Q1 | ATO, BX, CORTVSR BZ, EWBC, LEN, OSK, XEL | - | - | - |
| 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 |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
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 | |
| 2025 Q3 |
AI Capex |
|
Value Investing |
||
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 30, 2026 | Fund Letters | Howard Gleicher | CBSH | Commerce Bancshares, Inc. | Financials | Regional Banks | Bull | NASDAQ | banking, capital discipline, Credit, dividends | Login |
| Oct 14, 2025 | Fund Letters | Howard Gleicher | SNPS US | Synopsys, Inc. | Information Technology | Semiconductor Design Software | Bull | NASDAQ | AI, Ansys, Eda, growth, Ip, Margins, recurring revenue, semiconductors, Simulation, Software | Login |
| Oct 14, 2025 | Fund Letters | Howard Gleicher | WFC US | Wells Fargo & Co. | Financials | Diversified Banks | Bull | NYSE | Banks, buybacks, Capital, Credit, dividends, efficiency, growth, Regulation, valuation | Login |
| Jul 22, 2025 | Fund Letters | Howard Gleicher | MSFT US | Microsoft Corporation | Information Technology | System Software | Bull | NASDAQ | AI, cloud, enterprise, Margins, Software, Subscriptions | Login |
| Jul 22, 2025 | Fund Letters | Howard Gleicher | MCHP US | Microchip Technology Inc. | Information Technology | Semiconductors | Bull | NASDAQ | cashflow, Industrials, Margins, Mcu, semiconductors, turnaround | Login |
| Jul 22, 2025 | Fund Letters | Howard Gleicher | AMGN US | Amgen Inc. | Health Care | Biotechnology | Bull | NASDAQ | Biotech, cashflow, Obesity, pharma, Pipelines, valuation | Login |
| Jul 22, 2025 | Fund Letters | Howard Gleicher | ALC SW | Alcon Inc. | Health Care | Health Care Equipment | Bull | Swiss Exchange | Demographics, innovation, lenses, Medtech, Ophthalmology | Login |
| Jul 22, 2025 | Fund Letters | Howard Gleicher | UBER US | Uber Technologies Inc. | Information Technology | Passenger Ground Transportation | Bull | NYSE | cashflow, delivery, Logistics, mobility, network effects | Login |
| Jan 30, 2026 | Fund Letters | Howard Gleicher | SONY | Sony Group Corporation | Communication Services | Entertainment | Bull | New York Stock Exchange | Content, entertainment, Gaming, Ip, Margins | Login |
| Jan 30, 2026 | Fund Letters | Howard Gleicher | UBER | Uber Technologies, Inc. | Industrials | Passenger Transportation | Bull | New York Stock Exchange | Autonomy, Free Cash Flow, mobility, network effects, Regulation | Login |
| Jan 30, 2026 | Fund Letters | Howard Gleicher | PH | Parker-Hannifin Corporation | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Aerospace, Automation, cashflow, Industrials, Margins | Login |
| Jan 30, 2026 | Fund Letters | Howard Gleicher | COF | Capital One Financial Corporation | Financials | Consumer Finance | Bull | New York Stock Exchange | buybacks, creditcards, Margins, Payments, scale | Login |
| TICKER | COMMENTARY |
|---|---|
| AMGN | Our best-performing stocks in the quarter were Merck (MRK), Amgen (AMGN), and American Express (AXP). For the 2025 full year the best-performing stocks were eBay (EBAY), Amgen Inc (AMGN), and American Express (AXP). |
| COF | We added to Capital One Financial Corporation, which was a core new addition in the prior quarter. |
| LEN | LEN: $5B authorized January 2024; $4B completed |
| MRK | Top gainers in the Fund this quarter included Merck (+26%) |
| 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. |
| PH | The provider of monitors and sensors highlighted an increase in orders across its business, supported by stronger aerospace and HVAC (heating, ventilation and air conditioning) demand. |
| SONY | Japan's Sony, whose diversified media, entertainment and technology businesses are headlined by its PlayStation franchise, traded lower after the spinout of its Sony Financial Group. Additionally, the sharp rise in DRAM prices created uncertainty around margin pressure in the company's gaming division, further weighing on the share price. |
| STZ | Examples include Tidewater, Valaris, Constellation Brands, Diageo and Trex. We have discussed TDW and VAL previously, as well as STZ and DEO here. STZ: $4B buyback announced April 2025; $600M completed |
| TDY | Teledyne Technologies, a diversified industrial technology company, declined as expectations for near-term acceleration were pushed out. |
| UBER | UBER was a detractor in the fourth quarter following its third-quarter 2025 earnings report, which delivered strong operating performance but was met with a muted market reaction. Gross Bookings and adjusted EBITDA both came in near the high end of management's guidance, driven by accelerating demand across both Mobility and Delivery. However, investor focus shifted to commentary around reduced margin expansion as the company steps up investment in growth initiatives, including autonomous vehicle partnerships, platform innovation, and commerce expansion. |
| USB | Select holdings in banking (US Bank) detracted from returns |
| WFC | and money center banks Citigroup and Wells Fargo, all following strong performance |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
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