| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
The first quarter of 2026 was marked by significant market volatility as geopolitical tensions in the Middle East led to a closure of the Strait of Hormuz and a 70% surge in oil prices. The S&P 500 declined 4.3%, but this masked important underlying dynamics as market leadership shifted dramatically toward smaller companies and value stocks. The equal-weight S&P 500 and Russell 2000 both gained nearly 1%, demonstrating the benefits of diversification. Rising oil prices, combined with already firming inflation, led markets to completely reprice Federal Reserve expectations from rate cuts to potential hikes. Additionally, artificial intelligence evolved from being viewed as a productivity tool to a potential disruptor of entire professional service categories, causing software stocks to decline 30% from their peak. Despite the market volatility, corporate earnings estimates continued to rise and profit margins remained healthy, suggesting the decline reflected external uncertainty rather than fundamental deterioration. The quarter reinforced the importance of maintaining diversified portfolios across company sizes, styles, and geographies.
Despite Q1 market volatility driven by geopolitical tensions and oil price spikes, the underlying economic fundamentals remain healthy with earnings estimates continuing to rise, suggesting the market decline reflects uncertainty around external factors rather than deteriorating business conditions.
The key development to watch in Q2 is the situation in the Middle East and its impact on oil prices, with negotiations ongoing regarding the Strait of Hormuz closure. The connection between oil prices, inflation, and Federal Reserve policy will shape the outlook for interest rates and the broader economy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 1 2026 | 2026 Q1 | - | AI, diversification, energy, Fed policy, Geopolitical, inflation, Market Rotation, oil | - | Q1 2026 saw oil prices surge 70% due to Middle East tensions, driving S&P 500 down 4.3% while smaller companies outperformed. AI disruption fears hammered software stocks down 30%. Federal Reserve rate cut expectations evaporated amid inflation concerns. Despite volatility, earnings estimates continued rising, suggesting market decline reflects geopolitical uncertainty rather than fundamental weakness. |
| Jan 1 2026 | 2025 Q4 | - | AI, Economic Data, Fed policy, Government Shutdown, Market Leadership, Rate Cuts | - | Markets ended Q4 near all-time highs despite government shutdown disruptions and Fed policy uncertainty. The S&P 500 gained 18% for the year, but AI themes matured toward selectivity and profitability focus. With expensive valuations and high expectations already priced in, 2026 faces a higher bar with less margin for error despite continued positives. |
| Oct 1 2025 | 2025 Q3 | - | AI, earnings, Federal Reserve, Labor Market, rates, small caps, technology | - | Markets hit new highs in Q3 driven by Fed rate cuts and AI investment boom. Small caps outperformed dramatically while technology spending reached fastest pace since late 1990s. Fed signals gradual easing with two more cuts expected by year-end. Market positioned for soft landing scenario despite labor market softening and expensive AI valuations creating potential headwinds. |
| Jul 1 2025 | 2025 Q2 | - | earnings, Fed policy, inflation, Market Volatility, Risk Appetite, tariffs, Trade Policy | - | Trade policy volatility defined the first half of 2025, creating dramatic market swings from Q1 escalation to Q2 de-escalation. Despite extreme volatility, markets ended largely unchanged with the S&P 500 recovering fully from 15% losses. The Federal Reserve paused rate cuts due to uncertainty while inflation expectations rose despite subdued actual data. Focus remains on long-term discipline amid ongoing policy uncertainty. |
| Apr 1 2025 | 2025 Q1 | - | AI, diversification, growth, Markets, Optimism, technology, Valuations | - | Financial Synergies maintains optimistic market outlook despite elevated valuations, citing declining rates, controlled inflation, and steady growth. AI offers significant opportunities with established profitable companies leading innovation. While Shiller P/E at 38x appears expensive, strong earnings growth and business fundamentals support current levels. Diversified portfolios across market segments can manage risk while capturing long-term growth opportunities. |
| Jan 2 2025 | 2024 Q4 | - | Estate Planning, financial planning, Market Highs, Wealth management | - | Financial Synergies' quarterly newsletter covers their internship program, estate planning guidance, and market education. They present data showing investing at S&P 500 all-time highs historically produced solid returns, with only 9% probability of 10%+ declines. The firm emphasizes wealth management's emotional aspects beyond numbers, focusing on client goals and legacy planning. |
| Oct 1 2024 | 2024 Q3 | META | AI, Data centers, infrastructure, Investment, returns, technology, value | META | Hundreds of billions in AI infrastructure spending continues despite limited corporate adoption. Meta exemplifies the challenge, needing 4% additional revenue growth to justify $40+ billion in extra data center investments. Companies with clear monetization paths and internal execution capabilities have better odds than those dependent on external factors for returns. |
| Jul 1 2024 | 2024 Q2 | 000660.KS, 005930.KS, 1299.HK, 2330.TW, 2912.TW, 300012.SZ, 300124.SZ, 3690.HK, 9999.HK, BBCA.JK, BCH, FMX, HDB, NTCO3.SA, RADL3.SA, UL | AI, Brazil, China, emerging markets, Indonesia, Quality, semiconductors, valuation | - | Aikya's emerging markets fund underperformed in October due to minimal semiconductor exposure during AI-driven rallies. The fund maintains quality and valuation discipline, benefiting from Indonesian bank holdings and defensive Chinese positions while facing headwinds from Latin American consumer slowdowns. Management prioritizes long-term absolute returns over benchmark tracking. |
| Apr 2 2024 | 2024 Q1 | 7318.T, HOLO | AI, deployment, energy, private equity, Take-privates, value creation | - | BXPE delivered 3.9% Q3 returns through record $1.3 billion deployment across high-conviction themes including AI, energy transition, and digitization. Strong portfolio fundamentals drove broad-based performance with 80% of investments appreciating. Major take-privates of TechnoPro and Hologic showcase deal sourcing capabilities while young portfolio composition indicates significant upside potential ahead. |
| Jan 1 2024 | 2023 Q4 | 004800.KS, 005930.KS, 009540.KS, 090430.KS, CDI.PA, NWSA, REA.AX, VI.PA | asset value, discount, Holdings, Korea, NAV, value | NWSA | AVI Global Trust focuses on discount-to-NAV opportunities, building Korean exposure to 9.5% of portfolio amid corporate governance reforms. Korean holdings delivered 25% weighted returns despite widespread discounts persisting. News Corp remains largest detractor but family trust resolution may catalyze value realization. Manager sees compelling environment for fundamental investors in underresearched, undervalued markets. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilOil prices rose over 70% in Q1 due to escalating geopolitical tensions and the closure of the Strait of Hormuz, a chokepoint for roughly 20% of global oil flows. The surge sent crude oil trading at the highest level since mid-2022, with prices near $100 per barrel by quarter-end. |
Energy Geopolitical Inflation Supply Commodities |
AIAI shifted from being viewed as a productivity tool to a potential replacement for entire categories of professional services. This change in perception led to a significant sell-off in the software industry, which declined nearly 30% from its peak, representing one of the largest non-recessionary drawdowns in over 30 years. |
Technology Software Disruption Professional Services Productivity | |
DiversificationMarket leadership shifted dramatically with smaller companies outperforming large caps. The equal-weight S&P 500 and Russell 2000 each gained nearly 1% while the market-cap weighted S&P 500 declined 4.3%, demonstrating the benefits of diversified exposure across company sizes and styles. |
Small Caps Value Market Leadership Portfolio Risk Management | |
InflationRising oil prices combined with already firming inflation led to a complete repricing of Federal Reserve rate cut expectations. Core PCE remains near 3% and producer-level price inflation has been rising, with gasoline prices already up nearly $1.00 per gallon since late February. |
Fed Policy Energy Consumer Prices Monetary Policy Economic Data | |
| 2025 Q4 |
AIEdgewood views AI as creating significant opportunities, particularly through Draft One which generates police reports in minutes with 50%+ time savings. The AI Era Plan is their fastest booked product to date, expanding software value per officer and driving higher attach rates across hardware and software products. |
AI Draft One LLMs Software Automation |
SemiconductorsThe firm maintains significant exposure to semiconductor companies including NVIDIA, Broadcom, and ASML. They note AI servers require greater connector/interconnect content versus traditional servers, driving healthy organic growth in related segments. |
Semiconductors AI Infrastructure Data Centers Memory Connectivity | |
GrowthEdgewood focuses on high-quality growth companies with estimated long-term EPS growth rates of 10-21%+. Their portfolio delivered 29% YoY earnings growth in the most recent quarter, significantly outpacing broader market indices. |
Growth EPS Growth Quality Compounding Fundamentals | |
Data CentersThe projected incremental 100GW of data center capacity necessary through 2030 creates large opportunities for portfolio companies. AI data centers drive structurally higher interconnect content with dense GPU racks requiring far more high-speed copper, fiber, and power interconnects. |
Data Centers Infrastructure GPU Connectivity Power | |
| 2025 Q3 |
AITechnology-related investment grew 14% year-over-year in Q2, the fastest pace since the late 1990s, driven by AI industry buildout with billions spent on chips, cloud architecture, and data centers. Management teams report strong demand with spending plans in the hundreds of billions and order backlogs spanning years. AI enthusiasm has fueled outsized gains in technology and semiconductor stocks, though some question whether spending is outpacing revenue growth. |
Data Centers Semiconductors Cloud Technology |
RatesThe Federal Reserve cut interest rates by 0.25% in September after a 9-month pause, framing it as risk management to keep economic expansion on track. The central bank updated its forecast to include two more rate cuts before year-end with potential for more in 2026. Treasury yields fluctuated but ended the quarter lower, causing bonds to trade higher with longer-maturity bonds outperforming. |
Federal Reserve Treasury Monetary Policy | |
Small CapsSmall-cap stocks rallied sharply in anticipation of the Fed's rate cut, with the Russell 2000 surpassing its previous high from 2021 and returning nearly 12%. Small caps posted their biggest quarter of outperformance over the S&P 500 since Q1 2021. Like emerging markets, small caps are viewed as more sensitive to rate cuts and shifts in global financial conditions. |
Russell 2000 Rate Sensitivity | |
| 2025 Q2 |
Trade PolicyTrade policy uncertainty dominated the first half of 2025, with escalating tariffs in Q1 followed by de-escalation in Q2. The administration implemented targeted tariffs on China, Canada, and Mexico, then announced sweeping global tariffs before shifting toward de-escalation with trade agreements. Policy uncertainty remains fluid with court challenges and upcoming deadlines creating ongoing volatility. |
Tariffs China Trade War Policy Uncertainty |
InflationTariff uncertainty caused inflation expectations to rise sharply despite actual inflation remaining subdued. Consumer expectations diverged significantly from trailing inflation data, with the University of Michigan survey showing rising expectations while the Consumer Price Index continued drifting lower. The debate continues whether companies will pass through tariff costs or absorb them to remain competitive. |
Expectations Consumer Prices Tariffs Fed Policy Pricing | |
RatesThe Federal Reserve held interest rates steady due to trade policy uncertainty, adopting a wait-and-see approach before deciding on rate cuts. Markets expect gradual rate cuts beginning in September, with approximately 1.25% in cuts anticipated over the next 18 months. Long-term Treasury yields remained volatile but ended the first half largely unchanged. |
Fed Policy Rate Cuts Treasury Monetary Policy Uncertainty | |
Risk AppetiteMarket sentiment shifted dramatically from cautious in Q1 to renewed optimism in Q2 as trade tensions eased. The transition created two distinct market environments, with defensive low volatility stocks outperforming in Q1 before high beta cyclical stocks led the Q2 rebound. Growth and technology stocks experienced the most dramatic reversal. |
Sentiment Volatility Growth Technology Cyclicals | |
EarningsCompanies posted stronger than expected Q1 earnings, contributing to the Q2 market rebound. The upcoming corporate earnings season will provide crucial insight into how companies are navigating tariffs and policy uncertainty, including updates to pricing strategies and earnings guidance for coming quarters. |
Corporate Guidance Pricing Strategy Outlook | |
| 2025 Q1 |
AIAI represents incredible potential from curing diseases to improving productivity to reshaping how we live and work. The rapid rise of artificial intelligence is unsettling at times but offers endless opportunities. Current AI-related companies are well established with strong profitability and healthy balance sheets, unlike unprofitable dot-com companies of the past. |
Technology Innovation Productivity Growth Disruption |
ValuationsCurrent market valuations are high with the Shiller P/E ratio at 38x versus historical average of 27x. While stocks appear expensive by historical standards, valuations don't reliably predict near-term returns. Strong business fundamentals and earnings growth have justified some elevated expectations in recent quarters. |
Price-to-earnings Expensive Fundamentals Earnings Historical | |
| 2024 Q3 |
AIMassive investments in AI infrastructure continue despite skepticism about returns. The manager analyzes whether hundreds of billions in AI spending will generate adequate returns, comparing it to historical technology adoption cycles. Early corporate adoption remains limited but infrastructure investments by major players suggest confidence in eventual productivity gains. |
Data Centers Infrastructure Productivity Technology Investment |
| 2024 Q2 |
AIThe market's continued excitement for AI potential led semiconductor stocks materially higher, with Taiwanese and Korean markets at record highs. While the fund believes in AI's long-term potential, they maintain quality and valuation discipline rather than chasing momentum. |
Semiconductors Taiwan Korea Technology |
QualityAikya's investment approach relies on two key pillars: Quality and Valuation. They invest exclusively in high-quality companies when available at sensible valuations, maintaining this discipline despite market momentum in other areas. |
Valuation Investment Discipline Companies | |
| 2024 Q1 |
AIBlackstone continues to focus on the picks and shovels of AI through infrastructure investments such as chips and data centers, while the market's maturation has opened the door for measured exposure to the application layer. BXPE invested in OpenAI and Anthropic — two category-defining AI research labs with complementary strategies in consumer and enterprise use cases. |
Data Centers OpenAI Anthropic Infrastructure Applications |
Energy TransitionAfter two decades of stagnation, US electricity demand is projected to rise by 40% over the next 10 years. One key reason is data centers, where over 80% of hyperscalers and operators cite power availability as their top growth constraint. Electrification and reshoring of manufacturing are also fueling this secular trend. |
Electricity Demand Data Centers Electrification Power Infrastructure | |
DigitizationDigitization — investments tied to the global shift online — was a top contributor, accounting for 21% of Q3 performance. This theme represents the ongoing digital transformation across various industries and business models. |
Digital Transformation Online Technology Business Models | |
| 2023 Q4 |
South KoreaBuilding exposure to Korea due to ongoing corporate governance reform agenda and rich array of deeply undervalued companies. Korean names have contributed +1.1% to NAV with weighted average total return of +25%. 68% of KOSPI index still trading below book value and 61% without sell-side coverage. |
Corporate Governance Value Discount Reform |
ValueFocus on companies trading at discount to estimated underlying net asset value. News Corp trading at significant discount with REA stake accounting for 75% of market cap. Amorepacific Holdings trading on widest ever discount of 52%. |
Discount NAV Undervalued Asset Value |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 21, 2025 | Fund Letters | Provident Financial Articles | META | Meta Platforms Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising technology, Artificial Intelligence, capital expenditure, cash flow generation, data centers, digital advertising, social media, user monetization | Login |
| Oct 31, 2025 | Fund Letters | Provident Financial Articles | NWSA | News Corp | Communication Services | Publishing | Bull | NASDAQ | Asset Unlock, Australia, discount, Dow Jones, Family Trust, information services, media, Publishing, REA Group, Value | Login |
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