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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
Kovitz Core Equity returned 2.7% in Q3 2025, lagging the S&P 500's return of 8.1%. This underperformance is attributed to a massive market rally heavily concentrated in high-momentum AI stocks, where the fund remains underweight. Kovitz actively managed risk during the quarter by completely exiting Oracle (ORCL) and PPG (PPG) on high-valuation and risk-concentration concerns. Capital was reallocated to four new high-quality holdings suffering from transitory sell-offs of 20% or more: Alcon (ALC), Cooper Companies (COO), Ryan Specialty Holdings (RYAN), and Waters Corp (WAT). In fixed income, Kovitz remains defensively positioned due to compressed yields and credit spreads, advocating for direct private credit to harvest the illiquidity premium.
Long-term stock performance is driven by sustainable earnings growth. Investing in strong businesses with consistent profit margins, low debt, and robust returns on capital at reasonable valuations will successfully win the race, acting as a veteran marathoner pacing strategically rather than chasing short-term momentum.
Kovitz remains cautious but disciplined, noting that while markets trade near record valuation multiples and the S&P 500 displays active-fund-like concentration in AI, sticking to a diversified asset allocation plan is the best way to avoid overreactive blunders. They emphasize quality and patience across both equity and fixed income, advocating for selective allocations like private credit to secure excess returns.
As of Sep 30, 2025
Mitchell Kovitz leads the investment team as primary portfolio manager since the strategy's inception in December 1997, providing nearly three decades of consistent leadership and investment approach execution. Joel Hirsh joined as co-manager in 2006, bringing additional depth and experience to investment decision-making processes. The team was strengthened in 2024 with the addition of Matt Hayner, CFA, as co-manager, demonstrating the firm's commitment to maintaining investment talent continuity. The management team's long tenure and stability reflects deep institutional knowledge and consistent application of the value-oriented investment philosophy. This continuity in leadership has been instrumental in delivering the strategy's long-term performance track record and maintaining disciplined investment processes across different market environments.
Quality Value / Growth
Lead Portfolio Manager
High Conviction Bullish
Market Conviction
High-conviction positioning: Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Growth Outlook
Market outlook remains moderate conviction: Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Risk Appetite
Risk appetite posture is moderate conviction: Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Forward Guidance
Forward guidance signal: Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Language Signal
Tone analysis indicates above average conviction language: Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Perceived Risk
Perceived risk level is evaluated as above average conviction. Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Opportunity Density
Opportunity density index indicates moderate conviction actionable entry points. Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Time Horizon
Investment time horizon reflects a high conviction orientation. Kovitz lagged the momentum-driven Q3 market, choosing instead to trim risk by exiting Oracle and redeploying capital into high-quality, undervalued health care and specialty financ...
Top Conviction Themes
Key Catalysts
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