Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st March 2026
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 16.8% | 3.73% | 3.73% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 16.8% | 3.73% | 3.73% |
The Invenomic Fund returned 0.38% in March versus -4.98% for the S&P 1500, with the short portfolio contributing 6.81% while longs detracted 5.87%. The fund maintains 108.1% long and 91.4% short exposure across 154 long and 123 short positions. The manager believes markets are building toward an inflection point, with two primary catalysts identified: hyperscalers reducing AI capital expenditures as they approach negative free cash flow with no visible ROI, and upcoming IPOs of SpaceX, Anthropic and OpenAI with nearly $4 trillion collective valuation facing insufficient market demand. The long portfolio focuses on high-quality software companies deemed resistant to AI displacement, while shorts target overvalued companies expected to face substantial corrections when hype fades. Momentum factor volatility reached extreme levels with the fourth strongest rally in 21 years, historically indicating market instability. The manager expresses excitement about current opportunities despite acknowledging the volatile path ahead.
Long high-quality software companies at attractive valuations while shorting overvalued companies benefiting from unsustainable AI hype, positioning for market inflection driven by hyperscaler capital expenditure reduction or major tech IPOs.
Manager expects continued market volatility and believes markets are building toward an inflection point. Anticipates substantial price corrections for overvalued companies when hype fades, though acknowledges the path to fair valuation will be volatile.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 29 2026 | 2026 Q1 | - | AI, financials, industrials, Long/Short, momentum, Overvaluation, software | - | Long/short equity fund positioning for AI bubble deflation through quality software longs and overvalued shorts. Manager expects hyperscaler capex cuts and massive tech IPOs to trigger market inflection. Strong March performance driven by short book gains amid extreme momentum volatility signaling instability. |
| Jan 29 2026 | 2025 Q4 | BIVIX | Equity, Factor, Long/Short, momentum, small caps, value | - | Invenomic Fund's long/short equity strategy delivered 4.58% returns in 2025 despite significant factor headwinds from value underperformance and small-cap weakness. The fund maintains disciplined value-oriented positioning with small-cap bias, expecting mean reversion in momentum and value factors. Management sees tremendous opportunity ahead given stretched market conditions and record margin debt levels. |
| Oct 28 2025 | 2025 Q3 | - | AI, Bubble, Long/Short, momentum, risk, Valuations |
NVDA TSLA NVDA TSLA |
Invenomic Fund lost 5.63% in September as extreme momentum conditions cost 4.5%. Market valuations hit bubble-like levels with Shiller CAPE at 40x, approaching dotcom peaks. AI narrative drives unprecedented risk appetite despite weak fundamentals. Fund maintains defensive 19.8% net exposure, proceeding cautiously amid negatively skewed risk/reward dynamics. |
| Jun 30 2025 | 2025 Q2 | - | Factor, Long/Short, momentum, positioning, retail, risk, value | - | Invenomic Fund faced historic momentum headwinds in Q2 2025, returning -6.14% as value underperformed growth by 13% and retail trading hit all-time highs. Despite current challenges, the manager maintains confidence in their long/short positioning, expecting eventual factor normalization to reward their contrarian strategy as market imbalances and momentum crowding reach unsustainable levels. |
| Mar 31 2025 | 2025 Q1 | - | Factor, Long/Short, momentum, Trade Policy, value, volatility | - | Invenomic Fund outperformed significantly in March with strong short book performance amid market volatility. Factor volatility has reached extreme levels due to trade policy uncertainty, creating a large disconnect between stock prices and fundamentals. The manager sees compelling long opportunities emerging from momentum-driven selling despite strong earnings growth, expecting continued volatility but excellent buying opportunities ahead. |
| Dec 31 2024 | 2024 Q4 | - | Factor Investing, Long/Short, momentum, risk management, value, volatility | - | Long/short equity fund capitalizing on extreme value/growth imbalances. December outperformance driven by short book as momentum factor finally declined. Management sees compelling opportunities from stretched valuations with S&P 500 at 26.5x forward P/E. Portfolio positioned for eventual reversal of 25-year momentum extremes through concentrated value longs and growth shorts. |
| Sep 30 2024 | 2024 Q3 | - | Election, Long/Short, momentum, US, Valuations, value | - | Invenomic Fund lost 2.13% in September as momentum-driven markets hurt their long/short value strategy. With stretched valuations, weak employment, and historically high household equity exposure, the manager maintains low net exposure while positioning for potential momentum reversal following the Presidential election. The fund continues finding compelling shorts despite challenging conditions. |
| Jun 30 2024 | 2024 Q2 | - | AI, Drawdown, growth, Long/Short, momentum, value | - | Invenomic Fund's value-driven long/short strategy faced severe headwinds in Q2 2024, returning -12% YTD as value underperformed growth by historic margins and momentum surged. Despite AI narrative pressures, the fund maintains conviction in their process with attractive valuations at 9.8x P/E for longs versus 38.5x for shorts. |
| Mar 31 2024 | 2024 Q1 | - | Exposure, Factor, Long/Short, momentum, risk management, volatility | - | Invenomic Fund navigated Q1 2024's challenging momentum rally by reducing net exposure to 15%, demonstrating disciplined risk management. While the quarter was difficult with a 6.43% decline, the fund outperformed in March and maintains focus on attractively priced companies with strong cash flows while shorting over-earning cyclicals and overvalued securities. |
| Dec 31 2023 | 2023 Q4 | - | Elections, Geopolitical, growth, Long/Short, rates, Valuations, value, volatility | - | Invenomic Fund delivered 16.56% returns in 2023 despite value's historic underperformance versus growth. The long/short equity manager has reduced net exposure to 10.1% ahead of 2024, citing elevated valuations, high rates, election uncertainty, and geopolitical risks. They view the challenging environment as creating opportunities for their cash flow-focused stock selection process. |
| Sep 30 2023 | 2023 Q3 | - | - | - | Performance summary showing Invenomic Fund's 14.13% year-to-date return through Q3 2023, outperforming benchmarks. Document contains only performance data and regulatory disclosures with no investment commentary or strategic insights provided. |
| Jun 30 2023 | 2023 Q2 | - | - | - | |
| Mar 31 2023 | 2023 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIManager believes hyperscalers are approaching negative free cash flow with no visible ROI on AI investments. Expects eventual reduction in AI capital expenditures as a potential market catalyst. Views current AI hype as unsustainable. |
Artificial Intelligence Hyperscalers Capital Expenditures ROI Technology |
MomentumMomentum factor experienced extreme volatility in March, falling 6.17% then rallying 12.05% in 13 days - the fourth strongest momentum rally in 21 years. Manager views sharp momentum moves as historically occurring during periods of market instability. |
Factor Investing Volatility Market Instability JPM Pure Momentum | |
| 2025 Q4 |
E-commerceCarvana was the top performer as a vertically integrated e-commerce platform for used cars. The company eliminates traditional dealerships and has competitive advantages in the enormous used-car industry with less than 2% market share and a long runway for profitable growth. |
Used Cars Vertical Integration Digital Platform Market Share |
Energy TransitionTalen Energy was a major contributor for the third consecutive year as an independent power producer owning nuclear facilities. The company expanded its relationship with Amazon Web Services to provide carbon-free energy for data centers and acquired gas-fired power plants. |
Nuclear Power Data Centers Carbon Free Power Generation | |
AIAI was mentioned as a major market theme driving performance, with South Korea's semiconductor industry benefiting from the AI boom. However, the manager notes market crowding around the tech/AI theme as a challenge for active managers. |
Semiconductors Market Theme Technology | |
| 2025 Q3 |
MomentumSeptember was the strongest month for momentum in over 20 years, with the Bloomberg US Pure Momentum Index returning +2.92%. Momentum was the biggest detractor to fund performance, costing approximately 4.5% during the month. |
Momentum Factor Performance |
Risk AppetiteRisk appetite is as strong as the manager has ever seen it. Market participants seem intent on blowing the biggest bubble in history, driven by the AI narrative that has captured the imagination of the investing public. |
Risk Bubble Exuberance AI | |
AIThe AI narrative driving market exuberance is extremely strong and has captured the imagination of the investing public. However, economic reality is starting to catch up with the narrative as capital expenditures deliver low incremental returns and revenue from AI investments remains anemic. |
AI Narrative CapEx Returns | |
| 2025 Q2 |
MomentumThe fund faced significant headwinds from the historic momentum rally that began in February 2023, representing the strongest 29-month momentum period in history. The Bloomberg Pure Momentum Index returned 3.86% in Q2 2025, making it the second strongest calendar quarter since the fund's inception. |
Momentum Factor Rally Crowding Reversal |
ValueValue underperformed growth by 13.0% during Q2 2025, representing the second widest margin since the fund began managing the strategy. This value/growth disparity created considerable headwinds for the investment approach. |
Value Growth Underperformance Factor Disparity | |
Risk AppetiteRetail investor activity reached all-time highs in Q2 2025, with retail flows particularly strong since President Trump announced tariffs in April. Retail share of individual stock trading volume surpassed previous peaks from the 2020-2021 meme-stock period. |
Retail Trading Volume Activity Flows | |
| 2025 Q1 |
MomentumFactor volatility continues to increase with the Bloomberg Pure Momentum Index experiencing significant swings. Standard deviation has risen to over 2% in 2025, a level only seen during Covid and the 2022 correction. Market participants are actively trading momentum while largely ignoring fundamentals. |
Factor Volatility Price Momentum Trading |
ValueThe Goldman Sachs Low Momentum basket shows EPS growth of 17.7% while performance has fallen 12.5%, creating a large disconnect between stock prices and fundamentals. This presents compelling long opportunities as the market ignores fundamentals in favor of momentum trading. |
Fundamentals EPS Growth Disconnect | |
Trade PolicyU.S. trade policy uncertainty continues to grow as the new administration seeks to make material changes. This is expected to keep market volatility elevated and shake up the status quo for global trade over the next several months. |
Policy Uncertainty Global Trade Administration | |
| 2024 Q4 |
MomentumThe Bloomberg Pure Momentum Factor had its second strongest year in the last quarter century, up 9.70%. The momentum rally that started on February 3rd, 2023, is almost twice as strong as any similar period since July 2008. Momentum was a significant headwind in 2024, with December representing only the second month of 2024 in which the factor posted a negative return. |
Factor Investing Momentum Factor Market Anomalies Quantitative Style Factors |
ValueThe spread between value and growth has been building over the past 24 months, creating extreme imbalances in capital markets. Growth performed considerably better than value during December, as seen in the 7.72% spread between the Russell 1000 Value and Growth Indices. The long portfolio returned 8.85% compared to the Russell 3000 Value Index up 13.61%, resulting in trailing by 4.76%. |
Value Investing Growth vs Value Factor Spreads Market Imbalances Style Rotation | |
VolatilityLarge-cap stocks fared the best during the period, with mid and small caps falling considerably more, down 7.04% and 8.26%, respectively. The massive divergences between value/growth and momentum in 2024 created a challenging environment for our strategy. These market anomalies created extremely stretched valuations that we are excited to take advantage of in our portfolio. |
Market Volatility Size Factor Dispersion Risk Management Market Stress | |
| 2024 Q3 |
MomentumMomentum remains the dominant factor in markets this year, with the fund experiencing the second strongest momentum period in 25 years outside of 2000. The manager notes that strong momentum years have historically been followed by weak years, and expects the U.S. Presidential election could serve as a turning point for the current momentum cycle. |
Momentum Factor Cycle |
ValueValue underperformed growth during September, contributing to the fund's difficulties. The manager continues to lean into their value-oriented investment process despite challenging market conditions that favor momentum over value strategies. |
Value Growth Underperformance | |
| 2024 Q2 |
ValueThe fund employs a value-driven investment strategy seeking undervalued companies with strong forward free cash flow. Value has underperformed growth by over 30% in the last 18 months, creating significant headwinds. The long portfolio has a P/E ratio of 9.8x compared to the short portfolio's 38.5x. |
Value Growth Free Cash Flow P/E Ratio Undervalued |
AIThe prevailing narrative driving equity markets is the influence of Artificial Intelligence. Companies believed to be disadvantaged by AI have performed poorly in 2024, as seen by the -12.66% return for the Goldman Sachs AI At Risk Basket. The fund notes these baskets are constructed without fundamental insight. |
Artificial Intelligence AI At Risk Technology Market Narrative | |
MomentumMomentum has been on one of its strongest runs in the last decade, creating harsh headwinds for the fund's strategy. The fund is counter exposed to the momentum factor, which has worked against their value-driven approach over the last 18 months. |
Momentum Factor Investing Market Trends Performance | |
| 2024 Q1 |
MomentumThe fund experienced significant headwinds from momentum factors in Q1 2024, with the Bloomberg US Pure Momentum Index creating challenges for their long/short strategy. The manager notes this was the strongest momentum rally since fund inception, requiring careful risk management to minimize drawdowns while maintaining discipline. |
Factor Rally Volatility Dispersion Risk Management |
| 2023 Q4 |
ValueThe fund focuses on value investing in an environment where value has significantly underperformed growth. The Russell 1000 Value Index has underperformed the Russell 1000 Growth Index by 104.40% since fund inception, with 2023 showing the second biggest divergence in 44-year history. Despite this headwind, the fund has delivered competitive returns through stock selection. |
Value Growth Russell Underperformance Stock Selection |
VolatilityThe manager expects 2024 to be a tumultuous year with high volatility driven by the presidential election, geopolitical conflicts, elevated market valuations, and high interest rates. They view uncertainty and volatility as creating opportunities for their investment process. |
Volatility Uncertainty Election Geopolitical Opportunity |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 28, 2025 | Fund Letters | Ali Motamed | NVDA | NVIDIA Corp. | Information Technology | Semiconductors | Bear | NASDAQ | — | Login |
| Oct 28, 2025 | Fund Letters | Ali Motamed | TSLA | Tesla Inc. | Consumer Discretionary | Automobiles | Bear | NASDAQ | — | Login |
| Oct 28, 2025 | Fund Letters | Ali Motamed | NVDA | NVIDIA Corp. | Information Technology | Semiconductors | Bear | NASDAQ | — | Login |
| Oct 28, 2025 | Fund Letters | Ali Motamed | TSLA | Tesla Inc. | Consumer Discretionary | Automobiles | Bear | NASDAQ | — | Login |
| TICKER | COMMENTARY |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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