| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
U.S. markets delivered another strong year in 2025, with the S&P 500 gaining nearly 18% despite a weak December finish. The rally was driven by AI-focused companies, creating historic market concentration with just five stocks accounting for 45% of returns. International markets had a standout year, outperforming the U.S. by the widest margin since 2009, supported by a U.S. dollar that fell over 9%. The Federal Reserve cut rates 1.75% since 2024, easing financial conditions. Looking ahead to 2026, supportive policy tailwinds remain through continued Fed easing and fiscal stimulus via the One, Big, Beautiful Bill Act. However, elevated U.S. equity valuations and late-cycle dynamics present risks. The labor market shows slowing momentum, and market concentration increases vulnerability to company-specific issues having broader implications. While earnings growth is expected to broaden beyond tech companies, the combination of high valuations and optimistic investor expectations leaves markets susceptible to surprises.
Markets delivered strong returns in 2025 driven by AI leadership and Fed easing, but face elevated valuations and late-cycle risks as we enter 2026 with supportive policy tailwinds offset by concentration concerns and slowing labor market dynamics.
Looking ahead to 2026, supportive policy tailwinds remain, but valuation and late-cycle risks matter. The Federal Reserve easing combined with fiscal stimulus measures may continue to support growth. However, late-cycle dynamics are becoming more visible with labor market slowing and investor expectations remaining optimistic, leaving markets vulnerable to surprises.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 29 2026 | 2025 Q4 | - | AI, Dollar, Fed, growth, international, rates, technology, value | - | AI was a dominant market driver of U.S. stocks and continues to influence market leadership. Strong AI-related investment was the backbone of U.S. growth in 2025. The AI-driven rally led to historic levels of market concentration with just five stocks accounting for nearly 45% of the S&P 500's total return. The Federal Reserve has cut interest rates 1.75% since 2024, easing financial conditions and supporting markets. The Fed resumed rate cuts in September, delivering three reductions by year-end as labor market risks rose. Markets expect continued, though slower, easing into 2026. The U.S. dollar fell more than 9% during 2025, supporting international markets. The dollar was pressured by high starting valuation and mounting concerns about global investor concentration in U.S. assets. Narrowing interest rate differentials may drive further decline. Value rebounded relative to Growth in Q4 2025, reflecting a clear shift toward balance after years of Growth dominance. Leadership broadened meaningfully into other sectors and stocks compared with earlier phases of the bull market, marking a meaningful transition in market dynamics. |
| Nov 20 2025 | 2025 Q3 | - | AI, consumption, Macro, rates, Valuations | - | Global markets are being driven by AI investment, monetary easing, and resilient consumption, with valuations now historically elevated. The commentary stresses that AI capex is driving GDP and earnings, while rate cuts improve small-cap earnings outlooks and broaden participation. Macro conditions remain supportive but stretched, requiring balanced risk management amid high valuations and policy uncertainty. |
| Jul 21 2025 | 2025 Q2 | - | asset allocation, correlations, diversification, Macro, risk management | - | The letter emphasizes thoughtful asset allocation amid macro uncertainty and shifting correlations. Management discusses balancing equities, fixed income, and alternatives to manage risk while preserving long-term return potential. Allocation discipline is framed as more important than short-term market timing. |
| Apr 21 2025 | 2025 Q1 | - | - | - | |
| Jan 22 2025 | 2024 Q4 | - | - | - | |
| Oct 18 2024 | 2024 Q3 | - | - | - | |
| Jul 19 2024 | 2024 Q2 | - | - | - | |
| Apr 15 2024 | 2024 Q1 | - | - | - | |
| Jan 17 2024 | 2023 Q4 | - | - | - | |
| Oct 17 2023 | 2023 Q3 | - | - | - | |
| Jul 14 2023 | 2023 Q2 | - | - | - | |
| Apr 14 2023 | 2023 Q1 | - | - | - | |
| Jan 13 2023 | 2022 Q4 | - | - | - | |
| Oct 13 2022 | 2022 Q3 | - | - | - | |
| Jul 15 2022 | 2022 Q2 | - | - | - | |
| Apr 14 2022 | 2022 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 |
DollarDollar depreciated -9% against trading partners in 2025, worst year since 2017. De-dollarization trend accelerating as world shifts away from US. Reduced net dollar exposure from 25% to 8% following geopolitical tensions and superpower positioning concerns. |
Depreciation De-dollarization Reserves Geopolitical | |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
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 |
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 |
| 2025 Q2 |
Allocation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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