| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.2% | 2.5% | 13.8% |
| 2025 |
|---|
| 13.7% |
Dodge & Cox Stock Fund delivered a 13.66% return in 2025, underperforming the S&P 500's 17.88% gain as market leadership narrowed to the largest growth stocks. The fund maintains its value-oriented investment approach despite elevated U.S. equity valuations, particularly in growth sectors. Key portfolio actions included reducing exposure to cyclical banks like Wells Fargo and Bank of America while increasing positions in insurance brokers and alternative asset managers. The fund added to contrarian positions in Fiserv and Charter Communications, both trading at compressed valuations following operational challenges. Industrials holdings including RTX and FedEx were key contributors to performance, while Financials stock selection, particularly Fiserv, detracted from results. The portfolio trades at an attractive 14.6 times forward earnings versus 22.9 times for the S&P 500, providing a significant valuation discount. Management believes the diversified portfolio is well-positioned across various economic environments, continuing to find opportunities where fundamentals are not reflected in current prices.
Dodge & Cox maintains its disciplined value-oriented approach, finding opportunities in a fully valued market by investing in companies where long-term fundamentals are not reflected in current prices, while positioning the portfolio at attractive valuations relative to broader indices.
The portfolio is diversified across a broad range of investment themes, and we believe it is well positioned for a variety of economic environments.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 18 2026 | 2025 Q4 | AON, AVTR, BAC, BK, BN, CHTR, CMCSA, CVS, FDX, FI, GILD, GOOGL, GSK, JCI, MET, MSFT, OXY, REGN, RTX, SCHW, TSM, WFC, WTW | contrarian, financials, industrials, technology, valuation, value | FISV | The fund maintains its value-oriented investment approach despite a fully valued U.S. equity market. The portfolio trades at an attractive valuation of 14.6 times forward… |
| Oct 14 2025 | 2025 Q3 | - | earnings, equities, financials, valuation, Value Investing | - | Dodge & Cox emphasizes disciplined value investing amid high U.S. equity valuations and sector concentration in mega-caps. The fund added to Financials such as Fiserv… |
| Jul 17 2025 | 2025 Q2 | UNH | Discipline, fundamentals, Health Care, Valuation gap, Value Investing | - | The commentary emphasizes valuation discipline amid elevated market multiples and widening dispersion between growth and value. Management favors high-quality businesses experiencing temporary setbacks rather than… |
| Mar 31 2025 | 2025 Q1 | CVS | - | - | - |
| Dec 31 2024 | 2024 Q4 | FI, SNY | - | - | - |
| Sep 30 2024 | 2024 Q3 | - | - | - | - |
| Jul 10 2024 | 2024 Q2 | - | - | - | - |
| Apr 15 2024 | 2024 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations |
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 |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations |
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 | |
| 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 18, 2026 | Fund Letters | David Hoeft | FISV | Fiserv, Inc. | Information Technology | Data Processing & Outsourced Services | Bull | New York Stock Exchange | Fintech, Margins, Payments, turnaround, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| AON | increased exposure to insurance brokers (Aon and Willis Towers Watson) |
| AVTR | We added a partial position of Avantor to the portfolio in the second half of the year after (and then while) the company had some self-inflicted ups and downs. It is probable that the worst is in the past for Avantor after a leadership change and guidance reset, but we felt it best to exit and book a loss before year end. |
| BAC | BAC, JNJ, JPM, and XOM were held in Miller/Howard portfolios as of December 31, 2025. |
| BK | Bank of New York Mellon, the largest financial custodian in the world, advanced amid strong earnings results. America's oldest bank is an early leader in the adoption of AI, with a multiyear partnership with OpenAI. |
| BN | Leading asset-rich alternative asset manager with deep domain expertise. Owns 73% of $84bn publicly-listed asset manager (Brookfield Asset Management) with significant value derived from asset-light, recurring management fee streams. We believe that deep domain expertise and best-in-class returns position Brookfield to benefit from multi-trillion-dollar wave of AI-related infrastructure investment. |
| CHTR | Charter Communications was sold during the quarter as it was not tracking to plan. |
| CMCSA | Within the portfolio, stocks like AutoZone, Comcast, and Zoetis were all punished for having perceived headwinds to already lowered expectations for growth. |
| CVS | CVS Health represents 2.02% of top holdings |
| FDX | As strong as the banks were, parcel delivery companies were even stronger, with FedEx Corp (FDX) at +23% pacing the Fund for the quarter. FedEx delivered a sizable beat-and-raise quarterly performance, and higher contracted rates appear to be sticking, even as fuel prices have declined. |
| FI | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| GILD | Gilead Sciences contributed with 5.78% ending weight and 0.58% contribution. |
| 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. |
| GSK | Glaxo is one of the world's leading pharmaceutical companies. Its share price has been stagnant for years despite solid earnings growth, and on 10x earnings, it excites us. |
| JCI | We exited Johnson Controls, where we have seen strong datacentre sales, but where the residential segment has been impacted by oversupply, with de-stocking expected to continue into 2026 before normalising again. |
| 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. |
| OXY | The largest detractors were Lennar Corp (LEN), U-Haul Holdings (UHAL/B), and Occidental Petroleum (OXY). |
| REGN | Performance was driven by strength in large-cap longs, specifically Regeneron |
| RTX | RTX Corporation (RTX) - formerly known as Raytheon Technologies Corporation, is a major American multinational aerospace and defense company headquartered in Arlington, Virginia. It is one of the largest aerospace and defense manufacturers globally, serving commercial, military, and government customers across more than 180 countries. RTX benefits from a very large backlog of commercial and defense orders, which provides multiyear revenue visibility and supports long-term planning. Backlog levels have grown significantly, reflecting robust demand across segments and helping underpin future sales. As global air travel continues recovering toward pre-pandemic levels, demand for new aircraft and maintenance, repair and overhaul (MRO) services is increasing. Commercial aftermarket sales—parts, service contracts, and support—have been a strong driver of organic growth due to rising airline utilization. RTX's Raytheon segment benefits from rising defense budgets in the U.S. and allied countries. Growth is underpinned by demand for integrated air and missile defense systems (e.g., Patriot), counter-drone technologies, and other advanced defense programs driven by geopolitical tensions. International orders are a growing portion of the defense backlog. The entire Defense Prime complex is currently re-rating as countries around the world are committing to spend more on defense initiatives and we like RTX for the above reasons and add that the company's three distinct business segments—Pratt & Whitney (engines), Collins Defense and Aerospace (avionics and systems), and Raytheon (defense systems)—provide revenue balance across commercial and government markets. This diversification helps mitigate cyclical downturns in any single area. Valuation has increased, but we believe the defensive narrative is still early, allowing for a reasonable balance between risk and reward. |
| SCHW | We also added to The Charles Schwab Corporation, which is benefiting from positive earnings revisions, expanding margins, and higher capital returns after having repaid nearly all of its high cost funding. |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| WFC | and money center banks Citigroup and Wells Fargo, all following strong performance |
| WTW | Additionally, we exited our position in Willis Towers Watson. While we believe the company is performing fine from an operational standpoint, we couldn't justify owning two insurance brokers with the possibility of the insurance industry entering a 'soft market' period for the next few years. |
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