| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 4.7% | 8.4% |
| 2025 |
|---|
| 4.8% |
Macquarie Large Cap Growth Fund delivered positive returns in 3Q25 but underperformed the Russell 1000 Growth Index as AI-related stocks drove market gains. The fund was positioned for AI exposure but maintained discipline by favoring only high-quality AI companies rather than participating in the broader rally of market extremes. Key detractors included not owning Tesla, and positions in Intercontinental Exchange and Intuit, while contributors included underweight positions in Meta and not owning Netflix or Eli Lilly. The fund added AMD and Vulcan Materials while eliminating Equinix. Looking forward, the manager draws parallels to the internet bubble, noting that while AI will be transformative, many aspects remain uncertain including business models and applications. Significant risk has built up as investors believe nothing can stop the AI momentum. The fund maintains its quality-first approach, believing this discipline will deliver benefits as markets cycle, providing exposure to the strongest growth businesses that should perform across economic environments.
The fund maintains a quality-first investment approach focused on dominant growth businesses that can thrive in various economic environments, while selectively participating in the AI theme through high-quality exposures rather than chasing market extremes.
The manager draws comparisons between the ongoing AI boom and the internet bubble, noting both similarities and differences. While they cannot predict the timing of a reset and do not expect a period as tumultuous as the dot-com bubble, they believe many aspects of AI remain to be figured out including business models, applications, regulation, power consumption, and hardware requirements. They maintain that their quality-first approach will continue to provide benefits as the market cycles.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 12 2025 | 2025 Q3 | AAPL, AMD, AMZN, DHR, EQIX, GOOGL, ICE, IDXX, INTC, INTU, LLY, MA, META, MSFT, NFLX, NVDA, ORCL, TSLA, TSM, V, VMC | AI, growth, large cap, Quality, semiconductors, technology |
ICE INTU VMC AMD EQIX |
Macquarie Large Cap Growth Fund underperformed in 3Q25 despite positive returns as AI stocks drove market extremes. The fund maintained quality discipline rather than chasing volatile AI plays, adding AMD and Vulcan Materials while trimming lower-conviction positions. Management sees parallels to the dot-com bubble with significant risks building, but believes their quality-first approach will benefit as markets cycle. |
| Jul 22 2025 | 2025 Q2 | AAPL, AMZN, AVGO, DHR, GOOGL, HD, ICE, INTU, LLY, MA, MC.PA, MSFT, NVDA, TSM, UNH, V, WCN | AI, growth, healthcare, large cap, Quality, technology, underperformance | - | Macquarie Large Cap Growth underperformed in 2Q25 due to poor stock selection, particularly in healthcare and financials. The fund believes current market momentum and narrow breadth are unsustainable, creating opportunities in overlooked quality companies with valuable data assets. They maintain conviction in their quality-focused approach for long-term compounding returns. |
| Mar 31 2025 | 2025 Q1 | AAPL, AMZN, AVGO, CRM, EA, GOOGL, ICE, IDXX, KO, LLY, META, MSFT, NVDA, TSLA, TSM, UNH, V, WCN | AI, financials, growth, large cap, Quality, risk management, technology, volatility |
ICE V EA IDXX |
Fund outperformed during volatile quarter as market leadership shifted away from AI and big tech toward quality businesses. Policy uncertainty and tariff threats created challenging environment favoring the fund's quality-focused approach. Manager believes current conditions represent early innings of quality outperformance cycle, with stable growth businesses commanding premiums during uncertain periods. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q3 |
AIAI stocks have been the primary driver of market returns, accounting for roughly 75% of market gains. The fund has significant exposure to companies already benefiting from AI, as well as future beneficiaries. However, many aspects remain uncertain including business models, applications, regulation, power consumption, and hardware requirements. |
Artificial Intelligence Machine Learning Technology Innovation Growth |
QualityThe fund maintains a quality-first approach, focusing on companies with attractive net margins, return on assets, and dominant competitive positions. This discipline has thrived through similar periods before and aims to provide exposure to the strongest growth businesses that should perform in both good and bad economic environments. |
Quality Investing Fundamentals Margins ROA Competitive Moats | |
SemiconductorsThe fund added AMD to the portfolio, believing it is positioned to supply competitive AI chips for inference and training to complement NVIDIA. The total addressable market for AI chips is vast and needs a second supplier beyond NVIDIA. |
Chips Hardware AI Hardware Computing Technology | |
| 2025 Q2 |
AIThe fund believes companies owning unique and valuable data are poised to play a critical role in the AI ecosystem. While hardware and AI models may eventually become commoditized, proprietary data remain irreplaceable. The portfolio includes many data-rich companies positioned to benefit from AI's long-term potential. |
Data Hardware Cloud Proprietary Ecosystem |
QualityThe fund maintains confidence in their quality without compromise approach, which they believe has potential to drive consistent, compounding returns over the long term. They remain steadfast that a focus on quality provides inherent advantages and have positioned the portfolio accordingly. |
Compounding Discipline Philosophy Consistency Value | |
| 2025 Q1 |
QualityThe fund emphasizes investing in stable high-quality growth businesses that can maintain strong fundamentals during uncertain periods. These companies command a premium for consistency and should favor their investment style as market conditions become more challenging. |
Quality Fundamentals Stability Premium Consistency |
Risk AppetiteThe market has been progressively extending risk exposure, creating vulnerability as conditions become uncertain. Risk factors like beta and momentum remain elevated, having outsized negative impact on stocks characterized by these risks. |
Beta Momentum Risk Factors Volatility Uncertainty | |
AIThe DeepSeek event caused significant disruption in the AI realm during the quarter. Big tech and AI-related stocks were hit hardest after experiencing outsized returns as the investment community had been singularly focused on the AI narrative. |
DeepSeek Technology Disruption Narrative Returns |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 12, 2025 | Fund Letters | Bradley Klapmeyer | INTU | Intuit Inc. | Information Technology | Application Software | Bull | NASDAQ | AI, Diy-tax, FCF, Margins, Mid-market, Software, switching costs | Login |
| Oct 12, 2025 | Fund Letters | Bradley Klapmeyer | VMC | Vulcan Materials Company | Materials | Construction Materials | Bull | NYSE | aggregates, backlog, infrastructure, Margins, oligopoly, Pricing power, resilience | Login |
| Oct 12, 2025 | Fund Letters | Bradley Klapmeyer | AMD | Advanced Micro Devices, Inc. | Information Technology | Semiconductors | Bull | NASDAQ | accelerators, AI, data center, inference, market share, Roadmap, Training | Login |
| Oct 12, 2025 | Fund Letters | Bradley Klapmeyer | EQIX | Equinix, Inc. | Real Estate | Data Center REITs | Bear | NYSE | AFFO, CapEx, data centers, Interconnection, Pricing, Supply, Utilization | Login |
| Oct 12, 2025 | Fund Letters | Bradley Klapmeyer | ICE | Intercontinental Exchange, Inc. | Financials | Financial Exchanges & Data | Bull | NYSE | Data, Derivatives, Exchanges, Mortgage-tech, operating leverage, Pricing power, Volumes | Login |
| Mar 31, 2025 | Fund Letters | Macquarie Large Cap Growth Fund | EA | Electronic Arts Inc. | Communication Services | Interactive Media & Services | Bear | NASDAQ | Digital Transition, exit, Franchises, Mobile Gaming, monetization, Quality Decline, Sports Gaming, Video Game Developer | Login |
| Mar 31, 2025 | Fund Letters | Macquarie Large Cap Growth Fund | V | Visa Inc. | Financials | Financial Services | Bull | NYSE | Cash-to-Card, Durable, financial technology, growth, International, Payments, Profitable, Value Add Services | Login |
| Mar 31, 2025 | Fund Letters | Macquarie Large Cap Growth Fund | ICE | Intercontinental Exchange Inc. | Financials | Capital Markets | Bull | NYSE | Data Provider, Diversified, Energy Futures, ETF, Financial Exchange, fixed income, Monopoly, Mortgage Technology, NYSE | Login |
| Mar 31, 2025 | Fund Letters | Macquarie Large Cap Growth Fund | IDXX | IDEXX Laboratories Inc. | Health Care | Health Care Equipment & Supplies | Bull | NASDAQ | Aging Pets, Animal Health, Companion Pets, Consumables, Installed base, Pandemic Normalization, Razor Razorblade Model, Veterinary diagnostics | Login |
| TICKER | COMMENTARY |
|---|---|
| TSLA | The Fund has never held Tesla as it does not meet our quality standards. It frequently emerges as either a top contributor or detractor each quarter, reflecting its volatile nature and the cycle of missed earnings and deferred expectations that has persisted for years. The company tends to miss expectations regularly, yet the market habitually buys shares based on fantastical multiyear aspirations. |
| ICE | ICE, which operates wide moat commodity exchanges, mainly futures and options for energy, as well as a mortgage technology business, fell out of favor during the quarter. Trading volumes slowed in several areas, particularly energy, which offset strength in equities. However, we focus on the long-term structural aspects of the energy market that favor sustained commodity volatility, supporting long-term volume growth. We believe ICE maintains a defendable, industry-leading position across multiple business lines with the potential for favorable long-term trends. |
| INTU | Intuit, operator of TurboTax and QuickBooks, faced several headwinds in 2025, though its business fundamentals remain solid. During the quarter, the stock declined when OpenAI announced a new, more advanced large language model, which the market perceived as a threat to application software broadly. We have not seen evidence that this poses a near- or medium-term threat to Intuit's business; in fact, it may present new opportunities. Key growth drivers, such as the shift to take market share from the assisted tax preparation category and also penetration into the mid-market accounting market, are going extremely well despite downbeat market sentiment due to unfounded AI threats. |
| META | Meta Platforms Inc., parent company of Facebook, is a new but still underweight position in the portfolio. We recognize the company has quality characteristics – like its large user base and technology advantages – plus, not owning it presents risk management challenges relative to the benchmark given its significant benchmark weight. Nevertheless, we believe Meta still has valuation and quality hurdles to clear before becoming a full position, particularly providing more clarity on its use of capital. |
| NFLX | Netflix Inc. is not held in the portfolio; while it is a good business, its quality level does not justify the current valuation in our opinion. |
| LLY | Not owning Eli Lilly & Co., a large pharmaceutical company with a GLP-1 franchise, also helped relative performance. |
| VMC | We initiated a position in Vulcan Materials Co., one of two major aggregates companies in the US. Vulcan holds a dominant position in many regions, allowing for high market share and pricing power, which is exercised through annual price increases. With abundant infrastructure projects in the US, public contracts are accelerating and offsetting weakness in residential construction. |
| AMD | Advanced Micro Devices Inc. (AMD), a US semiconductor company, was also added to the portfolio. The total addressable market for AI chips is vast and in need of a second supplier to complement NVIDIA. We believe AMD is now positioned to supply a competitive, and possibly superior, chip for inference on a price/performance basis. Additionally, its next-generation chip for AI training should be a viable option to supplement NVIDIA supply. |
| EQIX | Equinix Inc., a data center operator, was eliminated from the portfolio. The company has unique assets in urban areas critical for reducing latency, especially as AI applications become more prevalent. However, as new locations open in second- and third-tier cities, Equinix has not been able to monetize these assets as we had expected. We believe there will be a better opportunity to own the stock in the future. |
| INTC | The third quarter saw new entrants into the AI ecosystem, notably Intel and Oracle, whose joint ventures and long-term deals propelled their stock prices higher. |
| ORCL | The third quarter saw new entrants into the AI ecosystem, notably Intel and Oracle, whose joint ventures and long-term deals propelled their stock prices higher. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| No Recent Buys Data | |||||
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