| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
The ClearBridge Mid Cap Strategy underperformed its benchmark in Q4 2025 as broad market headwinds and uneven earnings reactions weighed on results, despite improving fundamentals across much of the portfolio. The challenging environment was marked by heightened dispersion, narrow investor focus on AI themes, and sentiment-driven moves that frequently outweighed fundamentals. Information technology and real estate were primary detractors, with software companies facing AI disruption concerns and Alexandria Real Estate declining on biopharma spending slowdown. Consumer discretionary provided bright spots through gaming and travel holdings including Light & Wonder, Expedia, and Churchill Downs. The managers continued reallocating capital toward businesses with durable fundamentals and recurring revenue that have been underappreciated. Looking ahead, they see an incrementally more constructive environment as improving policy clarity, accommodative rates, and supportive tax dynamics could reaccelerate business investment across wider industries. With elevated dispersion creating valuation gaps, they believe patient stock selection and balanced construction are well-positioned for the evolving opportunity set.
Mid cap equities offer attractive opportunities through active stock selection as market dispersion creates valuation gaps, with improving policy clarity and business conditions expected to benefit fundamentally sound companies that have been overlooked during the narrow market focus on AI and growth themes.
The environment for mid cap equities is becoming incrementally more constructive, though uncertainty remains. Improving clarity around policy, accommodative interest rates, and supportive tax dynamics could reaccelerate business investment across wider industries. With dispersion elevated and valuation gaps wide, patient stock selection and balanced portfolio construction are well suited to the evolving opportunity set.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 26 2026 | 2025 Q4 | APG, ARE, ARGX, BSY, CHDN, CHWY, CMPO, CPAY, CWST, DKNG, DOCS, DT, EXPE, LNW, PFGC, PTC, RBLX, RESI, TDY, TYL, XPO | AI, dispersion, fundamentals, gaming, mid cap, real estate, stock selection, technology |
LNWO EXPE CHDN ARE CWST CPAY |
AI-driven disruption concerns weighed on software businesses as investor sentiment weakened amid heightened sensitivity to earnings expectations. The market showed unusually concentrated focus on AI… |
| Oct 21 2025 | 2025 Q3 | ATS, QXO | Artificial Intelligence, Biotechnology, healthcare, Industrial Automation, Mid Caps | RBLX | The fund outperformed through strong stock selection in healthcare and consumer staples, aided by biotech names like Argenx and Alnylam. Managers added positions in Bio-Techne… |
| Aug 4 2025 | 2025 Q2 | AXON, CVNA, NET, PLTR | Capital Allocation, fundamentals, quality growth, secular trends, volatility | - | The letter underscores confidence in high-quality mid-cap growth companies benefiting from secular tailwinds and improving capital allocation. Management notes that volatility created opportunities to add… |
| Mar 31 2025 | 2025 Q1 | APP, ASH, MCHP, MRVL | - | - | - |
| Dec 31 2024 | 2024 Q4 | APP, AROC, CTRA, IP, MRVL | - | - | - |
| Sep 30 2024 | 2024 Q3 | AME, APP, CPRT, DOCS, LINE, WST | - | - | - |
| Jun 30 2024 | 2024 Q2 | CLH, RBRK, STVN | - | - | - |
| Dec 31 2023 | 2023 Q4 | MNDY, WST | - | - | - |
| Sep 30 2023 | 2023 Q3 | BKI, CASY, CMG, FERG, KEYS, SWAV, XPO | - | - | - |
| Feb 11 2022 | 2022 Q3 | AVLR, AZPN, CMG, ETSY, PCTY, TFX, WSC | - | - | - |
| 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 |
GamingGames Workshop was identified as a largest contributor in 2025 and also contributed meaningfully in 2024, demonstrating that patience pays when a business is delivering consistent results over multiple years. |
Entertainment Consumer UK Franchise | |
Real EstateAlico continues as the fund's largest position, owning nearly 50,000 acres in Florida previously devoted to citrus farming. The company is undergoing strategic transformation, converting 75% of citrus acres to other agricultural purposes and 25% to higher and better use opportunities including residential and commercial developments. |
Land Development Agriculture | |
TravelIndia's burgeoning travel sector exemplified by MakeMyTrip benefits from rising household incomes and expanding middle class. India opened more than 70 new airports last year and airlines have massive order books for new jets. The transformation of Mumbai's airport terminal from chaos to capacity constraints demonstrates the rapid growth in India's traveling class. |
Online Travel Airports Airlines Tourism Infrastructure | |
| 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 |
HealthcareFund focuses exclusively on healthcare sector with concentrated portfolio of small-cap companies. Investment approach targets special situations within healthcare including spin-offs, asset sales, business model pivots, and new product launches. Portfolio includes pharmaceutical, medical device, biotechnology, and healthcare IT companies. |
Pharmaceuticals Medical Devices Biotechnology Healthcare IT Special Situations | |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 21, 2025 | Fund Letters | Brian Angerame | RBLX | Roblox Corporation | Communication Services | Interactive Home Entertainment | Bull | NYSE | advertising, Creator economy, Engagement, growth, monetization, network effects, UGC | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | LNWO | Light & Wonder, Inc. | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | entertainment, Gaming, recurring revenue, Technicals, valuation | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | EXPE | Expedia Group, Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | consumer, Execution, Margins, Platforms, Travel | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | CHDN | Churchill Downs Incorporated | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | assets, cashflow, entertainment, Gaming, Normalization | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | ARE | Alexandria Real Estate Equities, Inc. | Real Estate | Office REITs | Neutral | New York Stock Exchange | dividends, headwinds, Leasing, lifesciences, realestate | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | CWST | Casella Waste Systems, Inc. | Industrials | Environmental & Facilities Services | Bull | NASDAQ | cashflow, consolidation, Defensiveness, Pricingpower, Wastemanagement | Login |
| Jan 26, 2026 | Fund Letters | Brian Angerame | CPAY | Corpay, Inc. | Financials | Transaction & Payment Processing Services | Bull | New York Stock Exchange | Automation, cashflow, Margins, Payments, recurring revenue | Login |
| TICKER | COMMENTARY |
|---|---|
| APG | APi Group contributed 0.41% with 3.85% ending weight. |
| ARE | Worst for the quarter was Alexandria Real Estate Inc. (ARE) at -39%, as the depth and duration of the valley for biotech real estate appeared to be expanding, and the company signaled a potential dividend cut, which is at odds with our Fund's objective. Subsequent to our sale, the company cut its dividend by 45%. |
| ARGX | argenx SE is a global immunology company focused on improving the lives of patients suffering from severe autoimmune diseases. Their stock jumped 14% due to strong progress in its Vyvgart franchise, driven by higher pre-filled syringe sales volumes for both the myasthenia gravis and chronic inflammatory demyelinating polyneuropathy indications. There are multiple catalysts over the next 12 months that could drive additional growth. |
| BSY | BSY provides infrastructure engineering software used in the design and operation of transportation, utilities, and industrial assets. The stock traded lower as revenue growth decelerated modestly and margins were affected by increased investment in product development and go-to-market initiatives. |
| CHDN | Longer-term holdings such as Churchill Downs increased, outperforming benchmark returns |
| CPAY | Corpay is a US based global technology company focused on corporate payments, expense management, and cross-border transactions with the goal of simplifying and automating business payment flows. Its customers – typically medium and large companies – utilize the Corpay platform to centralize payments, control costs, and streamline administration, all of which are time-consuming and capital-intensive tasks in traditional payment processes. The essence of this business is to replace fragmented, manual, and often nontransparent processes with a digital solution that provides companies better visibility into their cash flows and greater operational discipline. An important component of Corpay's business consists in commercial and fleet payment programs that cover specific expense categories such as those for fuels, travel expenses, tolls, and other operating outlays. These segments are characterized by a high degree of repeatability, long-term customer relationships, and relatively stable margins. Corpay benefits from its scale, data, and ability to offer customers not only payment itself but also analytics, reporting, and control mechanisms that increase their willingness to stay with a single provider. A rapidly growing pillar of the group consists in international payments and currency conversion services, where Corpay helps companies execute cross-border transactions while managing exchange rate risk. This segment benefits from the ongoing globalization of business, the growing complexity of payment flows, and companies' efforts to reduce costs associated with bank transfers. For Corpay, this is an attractive area with higher added value, where the company combines payment infrastructure with FX margins and specialized services. Overall, Corpay's business is built on a combination of recurring transactions, its technology platform, and high costs of switching between suppliers. Once a customer is integrated into the system and has its payment processes set up, switching to a competitor is complicated and unappealing. This enables the company to grow over the long term, increase efficiency, and generate strong cash flows that it can reinvest into further product expansion, acquisitions, and technological leadership. Corpay's management has many years of experience in identifying, integrating, and improving the operations of acquisitions, which, since 2009, have contributed to more than 20% annualized profitability growth. In our view, the present share price does not reflect the company's current financial metrics, efficient asset allocation, and long-term potential, which combines a structural growth trend with high-quality, recurring business and strong capital discipline. |
| CWST | The fortunes of Casella Waste Systems waxed and waned during the quarter. At the beginning of the quarter, Casella's shares slipped ahead of its fiscal quarterly report. After showing revenues and earnings higher than anticipated, along with better full-year guidance, its share price recovered and ended the quarter up 3% for this provider of solid waste collection, transfer, disposal, and recycling services for residential, commercial, municipal, and industrial customers. |
| DKNG | If you want to place some action on a college football game or an NFL team, you can do so legally in 38 states through online sportsbooks such as DraftKings, FanDuel, or Hard Rock |
| DOCS | An overweight position in Doximity, Inc. (DOCS) detracted from performance. The stock declined following a quarterly earnings report signaling cautious guidance and uncertainty after recent healthcare policy changes. |
| DT | Dynatrace detracted from relative quarterly performance |
| EXPE | Expedia, which was a recent purchase, also posted strong results and raised the outlook going forward. We added to our exposure to Expedia and continue to hold both stocks in the Fund. |
| LNW | We re-entered LNW again this year in a meaningful way as the shares dropped on the news of the company re-listing from the Nasdaq to the Australian Securities Exchange (ASX). We thought the ~30% share decline was vastly overdone and took the opportunity to make LNW a high single-digit position size. The shares have rallied over 50% since our entry, and we have trimmed the position some, though it still represents a 5% position. As a reminder, LNW is a very high-quality business that is essentially a duopoly with Aristocrat, manufacturing and distributing slot machines on a global basis. |
| 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. |
| PTC | Consider the Fund's investment in PTC, a US-based software provider whose products are used by large industrial companies to design and manufacture complex products, including in the aerospace and defence industries. Designs must conform to precise engineering specifications and physical constraints – think of the components that go into an aircraft – with no scope for ambiguity or hallucination. AI is not a substitute for this business logic. |
| RBLX | An overweight position in Roblox Corp. (RBLX) detracted from performance. The stock declined following quarterly earnings, which signaled slower profit growth and uncertainty around future bookings. |
| TDY | Teledyne Technologies, a diversified industrial technology company, declined as expectations for near-term acceleration were pushed out. |
| TYL | TYL lagged in the quarter as investor preference shifted away from software names. While the company's long-term fundamentals and recurring revenue model remain intact, near-term growth visibility and valuation considerations weighed on relative performance. |
| XPO | Rotated into XPO, the fourth-largest LTL provider in North America. Under new leadership, the company is improving service levels, pricing discipline and margins, leaving more room for outperformance should macro malaise persist. |
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