| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| 2025 |
|---|
| 20.0% |
Matrix Asset Advisors delivered strong 2025 performance with their Large Cap Value strategy returning over 20% and Dividend Income strategy achieving mid-to-high teens returns, both outperforming benchmarks with lower volatility. Looking ahead to 2026, Matrix is cautiously optimistic, expecting high single-digit market returns with increased volatility and sector rotation. They anticipate Value stocks will outperform Growth after more than a decade of underperformance, driven by Fed rate cuts and investor demand for dividend income as short-term rates decline. Key risks include high market valuations, weakening employment, questions about Fed independence, and unbalanced economic growth heavily dependent on AI investment and high-income consumer spending. The firm sees opportunities in attractively valued sectors like Consumer Staples and Discretionary that lagged in 2025. Their portfolios are positioned defensively in fixed income with shorter maturities, while maintaining overweight equity exposure they plan to modestly reduce. Matrix believes their Value and Dividend strategies are well-positioned for the expected market environment.
Matrix Asset Advisors expects a rotation from expensive Large Cap Growth stocks to attractively valued Value and Dividend stocks in 2026, driven by Fed rate cuts, economic stimulus, and investor demand for income replacement as short-term rates decline.
Matrix is cautiously optimistic about the economy and market outlook for 2026. They expect the market to show a high single digit return around historic averages with higher than usual volatility and rotations. They anticipate Value will outperform Growth after more than a decade of underperformance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 30 2026 | 2025 Q4 | ACN, FI, GNRC, LMT, META, TXN | AI, dividends, Fed, financials, rates, technology, value | - | Artificial Intelligence was the most important investment theme in 2025 and is expected to be a powerful force in the real economy for years to come. AI is a tool with the potential to significantly increase economic productivity, but comes with high costs for employees being laid off and entry level workers finding it difficult to land jobs as their skills are automated. After more than a decade of Growth stocks vastly outperforming Value, Matrix expects Value will be in a period of favorable relative and absolute returns. They expect a rotation from Large Cap Growth stocks with the highest market valuations to stocks and sectors with more reasonable valuations that can show consistent earnings. Matrix expects high quality Value and Dividend stocks to perform well in an environment where investors are seeking to replace income lost due to declining short-term interest rates. Lower short term money market rates following additional Fed Fund cuts should renew the market's interest in dividend paying stocks. |
| Nov 16 2025 | 2025 Q3 | - | earnings, healthcare, Rotation, staples, value | - | The strategy highlights attractive valuations across high-quality large-cap businesses, supported by solid earnings growth and disciplined capital allocation. Despite elevated market multiples and narrow leadership from mega-cap growth, the letter argues that lagging sectors like consumer staples and health care offer compelling opportunities as economic conditions soften. The portfolios focus on fundamentally strong, reasonably priced companies positions it well for a more volatile, rotation-driven environment. |
| Aug 7 2025 | 2025 Q2 | AMAT, FI | capital returns, earnings, sector rotation, Valuation discipline, value | AMAT | The commentary highlights large-cap value stocks trading at meaningful discounts despite solid fundamentals and earnings resilience. Management points to valuation discipline, sector rotation, and selective opportunistic buying during market drawdowns. The outlook favors steady returns supported by reasonable multiples and capital returns. |
| Apr 8 2025 | 2025 Q1 | ABBV, BDX, FI, GNRC, PEP, RTX, TGT | - | - | |
| Jan 8 2025 | 2024 Q4 | AMGN, DG | - | - | |
| Sep 30 2024 | 2024 Q3 | BD, MDT | - | - | |
| Jul 31 2024 | 2024 Q2 | CVS, LOW, MDT | - | - | |
| Apr 15 2024 | 2024 Q1 | AEP, PGRE, TSN | - | - | |
| Dec 31 2023 | 2023 Q4 | - | - | - | |
| Sep 30 2023 | 2023 Q3 | RTX | - | - | |
| Aug 8 2023 | 2023 Q2 | LHX, UNH | - | - | |
| Aug 5 2023 | 2023 Q1 | PNC | - | - | |
| Mar 22 2023 | 2022 Q4 | AMZN, MS, SLB, TSN | - | - |
| 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 |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
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 |
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 |
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 7, 2025 | Fund Letters | David A.Katz | AMAT | Applied Materials Inc. | Information Technology | Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, Equipment, Fabrication, semiconductors | Login |
| TICKER | COMMENTARY |
|---|---|
| ACN | Accenture is the world's leading IT consultant, with advantages stemming from their depth and breadth across products, geographies, and industries. Over the last four years, Accenture's valuation has roughly halved. They've faced headwinds in IT spending and suffered from the perception that they are an AI loser. We believe that AI will cause deflationary pressure in parts of their business, but that it will be more than offset by the work required for enterprises to adopt AI. This is recently evidenced by partnerships with OpenAI and Anthropic. |
| FI | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| GNRC | Generac Holdings, Inc. (GNRC) was a bottom performer in the SMID Cap strategy in the fourth quarter. Generac's most profitable product group is Home Standby (HSB) generators, and in 2025, the U.S. experienced the fewest power outages (related to weather or other grid failures) since 2015. The lower demand for HSB will also create slightly lower margins for the year. The Commercial and Industrial segment is doing well with sales increasing 9% over last year. |
| LMT | We also made a name swap within our defence and security sub-theme, funding the initiation of Lockheed Martin through the sale of Kongsberg Gruppen. We preferred Lockheed as a more direct play on defence, with meaningful exposure to missiles, air defence and space, supported by a large order backlog that provides strong long-term visibility. |
| 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. |
| TXN | During the quarter, we started a position in Texas Instruments (TXN), a leading semiconductor company. TXN is very well managed with a strategy of investing through the business cycle. The company has a strong balance sheet and earnings history. Its share price was volatile in 2025, peaking at over $200 in July following strong second quarter earnings but declining in November to less than $160 after weaker fourth quarter guidance despite beating third quarter revenue and profits forecasts. The drop in the share price provided a good entry point for this high-quality company and we expect to see a nice cyclical rebound in its business and a much higher stock price over the next few years. |
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