| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.0% | 3.0% | 16.0% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 16.0% | 12.6% | 39.4% | -34.2% | 19.5% | 41.4% |
Emerald's Growth Equity Strategy returned 16.0% net in 2025, driven primarily by semiconductor equipment holdings including Applied Materials, ASML, and Tokyo Electron, which benefited from improving industry outlooks and attractive valuations. The manager navigated growing AI bubble concerns by maintaining strategic positioning in infrastructure companies with defendable moats, believing we may be approaching a Barnes & Noble moment of widespread business adoption. Following extensive research including a China field trip, they re-entered Chinese technology through Alibaba and Tencent, capitalizing on the regulatory shift from crackdown to active support. Key portfolio moves included reducing Nvidia underweight while favoring Broadcom's ASIC strategy, and adding back to Fortinet following significant underperformance. The manager acknowledges rising risks from passive investing proliferation causing larger momentum-driven distortions, but believes their bottom-up research approach focused on quality assets with strong fundamentals is well-suited for the challenging environment ahead, balancing AI opportunities with appropriate risk management.
The manager maintains strategic positioning in AI infrastructure and semiconductor companies while selectively re-entering Chinese technology markets, believing that bottom-up research focused on quality companies with strong moats will capitalize on long-term AI transformation despite near-term market volatility and bubble concerns.
The manager believes AI will have a profound long-term impact requiring careful balance of risks and opportunities. They expect momentum-driven price distortions to occur more frequently due to passive investing proliferation, necessitating firmer asset valuations and greater pain tolerance. The investment approach focused on bottom-up research, long-term view, and quality assets is viewed as particularly suited for the challenging road ahead.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 14 2026 | 2025 Q4 | 0700.HK, 6857.T, 8035.T, AAPL, AMZN, ASML, AVGO, AZN.L, BABA, FTNT, GOOGL, META, MSFT, NOW, NVDA, ORCL, TMO, TSM | AI, China, Cloud, cybersecurity, growth, infrastructure, semiconductors, technology | - | AI continues to show rapid progress with Google's Gemini 3 representing a significant leap in capabilities. The manager believes we may be nearing a Barnes… |
| Sep 30 2025 | 2025 Q3 | - | - | - | - |
| Jun 30 2025 | 2025 Q2 | - | - | - | - |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| 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 |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
CybersecurityCybersecurity companies are using AI in core algorithms to better identify anomalies and block malicious traffic. CrowdStrike is seeing reacceleration in growth with new Falcon Flex offering, while Netskope continues gaining SASE market share with strong competitive win rates. |
Security AI Detection Enterprise Cloud Protection | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 6857.T | Advantest is a leading provider of semiconductor test equipment. Results exceeded expectations, with management meaningfully raising guidance, citing sustained demand tied to artificial intelligence data center investment and improved visibility. Held in the Fund since the second quarter of 2024, Advantest has been a top contributor to performance, reflecting its mission-critical role in advanced testing and deep customer relationships - attributes that should support attractive growth as semiconductor complexity rises. |
| 8035.T | Tokyo Electron did well in the quarter as related semiconductor production equipment companies also did well. |
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| AVGO | The primary contributors to its performance were our exposures to Broadcom |
| AZN.L | AstraZeneca was one of the top performing holdings this quarter. |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| FTNT | After previously trimming Fortinet in Q2, we have now added back a portion of what we sold, following more than 40% underperformance since the reduction. |
| 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. |
| 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. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| 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. |
| TMO | Thermo Fisher Scientific was a strong contributor with 8.69% ending weight and 1.47% contribution. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
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