Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.2% | 1.0% | 15.3% |
| 2025 |
|---|
| 15.3% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.2% | 1.0% | 15.3% |
| 2025 |
|---|
| 15.3% |
Next Century Growth Investors delivered positive absolute returns in Q4 2025 but underperformed benchmarks as quality factors worked against active managers throughout the year. The firm's Large Cap Growth strategy returned 0.96% in Q4 and 15.30% for the full year, trailing the Russell 1000 Growth Index. Active management faced significant headwinds in 2025, with low-quality stocks dramatically outperforming high-quality names. The firm experienced particular challenges from biotech and speculative areas that drove index returns but fall outside their investment mandate. Despite near-term performance pressures, the managers remain committed to their philosophy of investing in high-quality growth companies with proven business models. They see improving conditions ahead, particularly for small caps, driven by pro-growth policies, Fed rate cuts, and positive earnings momentum. The portfolio maintains overweight positions in technology and industrials, with exposure to AI infrastructure and secular growth drivers. Management believes their disciplined approach will continue generating long-term outperformance as demonstrated by their since-inception track record.
Next Century Growth Investors maintains their conviction in owning a portfolio of high-quality growth companies with proven business models and sustainable growth drivers, believing this approach will lead to long-term outperformance despite near-term headwinds from quality factors working against active managers.
The firm believes the environment could be improving for small cap stock performance and sees potentially significant positives in the current environment including pro-growth policies and Fed rate cuts. They remain focused on their core investment philosophy of owning high-quality growth companies.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 21 2026 | 2025 Q4 | AAPL, AMD, GE, GHI, GOOGL, HOOD, KNSL, MDB, MSFT, NFLX, ORCL, PGR, ROKU, SAIA, SPOT | active management, growth, Outperformance, Quality, small caps, technology | - | The firm emphasizes investing in high-quality growth companies with proven business models and sustainable growth drivers. They note that quality factors worked against active managers in 2025, with low-quality stocks significantly outperforming high-quality names. Small cap earnings growth turned positive during 2025 and is expected to stay positive and potentially accelerate in 2026. Small caps continue to trade at a relative discount to large caps, presenting an opportunity for this discount to narrow. The firm maintains significant exposure to AI infrastructure and sees an accelerated pace of innovation happening across various industries. Their technology holdings are diversified across AI infrastructure among other areas. |
| Oct 24 2025 | 2025 Q3 | - | AI, Fintech, industrials, innovation, technology |
NVDA AAPL APP MDB ORCL GEV HOOD |
NCGs large-cap growth portfolio gained 8.4% in Q3, led by Nvidia, Applovin, and Apple, but lagged the benchmark as speculative AI names dominated returns. Managers maintained high tech exposure while adding to diversified growth areas such as industrials, fintech, and AI infrastructure plays. The team views disciplined growth exposure as key amid valuation excesses. |
| Aug 7 2025 | 2025 Q2 | - | Balance Sheets, Compounding, earnings visibility, Large Cap Growth, scalability | - | The commentary focuses on large-cap growth leaders with scalable business models and consistent revenue expansion. Management emphasizes earnings visibility, balance-sheet strength, and downside resilience. Large-cap growth is positioned as a core compounding allocation. |
| Mar 31 2025 | 2025 Q1 | - | - | - | |
| Dec 31 2023 | 2023 Q4 | ADBE, KNSL, WDAY | - | - |
| 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 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 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 |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management | |
Innovation |
||
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 24, 2025 | Fund Letters | Tom Press | NVDA | NVIDIA Corporation | Information Technology | Semiconductors | Bull | NASDAQ | AI, Computing, data centers, FCF, GPUs, hyperscalers, innovation, Margins, semiconductors, Software | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | AAPL | Apple Inc. | Information Technology | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | buybacks, cashflow, Consumer tech, Ecosystem, growth, Hardware, innovation, Margins, recurring revenue, services | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | APP | AppLovin Corporation | Communication Services | Interactive Media & Services | Bull | NASDAQ | adtech, advertising, AI, Data, growth, Margins, Mobile, monetization, Software, valuation | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | MDB | MongoDB Inc. | Information Technology | Application Software | Bull | NASDAQ | cloud, Databases, Developers, FCF, growth, infrastructure, recurring revenue, Retention, SaaS, Software | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | ORCL | Oracle Corporation | Information Technology | System Software | Bull | NYSE | AI, backlog, buybacks, cloud, enterprise, growth, infrastructure, Margins, Partnerships, Software | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | GEV | GE Vernova | Industrials | Electrical Equipment | Bull | NYSE | AI, backlog, Decarbonization, Electrification, energy, Grid, growth, infrastructure, Margins, renewables | Login |
| Oct 24, 2025 | Fund Letters | Tom Press | HOOD | Robinhood Markets Inc. | Financials | Capital Markets | Bull | NASDAQ | Crypto, Engagement, expansion, financials, Fintech, growth, Interest income, platform, profitability, Trading | Login |
| TICKER | COMMENTARY |
|---|---|
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| AMD | AMD was mentioned as an example of businesses that already make money, have shown they can do so through cycles and are priced so that we do not need everything to go right. |
| GE | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Electric |
| GHI | We added 4 new positions in Q4: one each in health care (Guardant Health) |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| HOOD | Robinhood Markets, Inc. is a digital brokerage platform serving retail investors. Shares detracted during the quarter following robust performance over the first nine months of the year. While overall activity levels remain strong, Robinhood experienced some softening in customer engagement in November, with cryptocurrency trading volumes in particular declining on both a month-over-month and year-over-year basis. |
| KNSL | Shares of specialty insurer Kinsale Capital Group, Inc. fell during the quarter due to concerns about moderating growth amid a cyclical slowdown for the property and casualty insurance industry. While third-quarter revenue growth improved sequentially, the pace of improvement was more modest than suggested by monthly data from state insurance commissioners. |
| MDB | Top 3 contributors to absolute performance: GOOGL, AAPL, MDB |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| PGR | Cadence, Linde, United Rentals, and Progressive rounded out the top-five detractors in the quarter. |
| ROKU | We added 4 new positions in Q4: one each in telecommunications (Roku) |
| SAIA | We sold 5 positions to zero in Q4: one in industrials: Saia |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||