The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
In 4Q25, the growth market gained 1.1% amid concerns over the Fed, economic stability, and the return on massive AI spending. The Sawgrass Large Cap Quality Growth portfolio outperformed, returning 3.2% (beating the Russell 1000 Growth Index by 2.1%). Strong contributors included non-Mag7 tech stocks (AMD, Applied Materials) and healthcare picks (Eli Lilly, United Therapeutics, Danaher) as market rotation broadened. Conversely, performance was hampered by weakness in defensive stocks (AutoZone, Comcast, Zoetis) and software names (ServiceNow, Workday) impacted by fears of AI-driven threat to subscription models. Looking forward, with the S&P 500 trading at an elevated forward P/E of 22.1, the manager expects a shift in 2026 towards fundamental earnings delivery and balance-sheet strength, which should benefit the fund's quality-focused positioning.
Long-term outperformance is achieved by positioning the portfolio in attractively valued, high-quality companies with strong balance sheets and solid earnings delivery, particularly as the market transitions away from momentum-driven trades and multiple expansion toward fundamental business strength.
Following three consecutive years of double-digit market gains, forward S&P 500 valuations are historically elevated at 22.1x forward P/E. As the momentum trade cools, market returns in 2026 are expected to become more dependent on fundamental earnings delivery and balance-sheet strength rather than multiple expansion or macro-driven optimism, setting up attractively valued high-quality companies to perform well.
As of Dec 31, 2025
Portfolio Manager and primary investment lead for Sawgrass Asset Management - Large Cap Quality Growth.
Neutral / Balanced
Market Conviction
The manager demonstrates moderate conviction through their willingness to maintain quality growth positioning despite underperformance and resist chasing momentum stocks. Specific holdings are named (Broadcom, Netflix, ServiceNow, Oracle) and the manager explicitly discusses what they don't own (Tesla, Palantir, underweights in Microsoft, Meta, Amazon). However, no position sizing is provided, and the portfolio appears diversified across multiple sectors. The conviction is evident in the consistency of approach but limited by the lack of concentration or explicit sizing details. Score reflects moderate conviction with clear positioning but without the concentration or specificity that would push it higher.
Growth Outlook
The manager expresses caution about market conditions, noting that valuations are at elevated levels with the S&P 500 trading at a 2.8% premium to historical averages. Market concentration has reached levels not seen since the 1990s dot-com era. While the manager states further gains are possible, they hedge this by saying it may not be reasonable without earnings growth and broader participation. The language is cautious rather than bearish, acknowledging risks while not forecasting a collapse.
Risk Appetite
The portfolio maintained its quality growth focus and remained invested throughout the quarter, but the positioning was relatively defensive compared to the benchmark. Underweight positions in mega-cap momentum stocks and not owning high-flying names like Tesla and Palantir indicate a more selective, risk-aware approach rather than aggressive risk-taking. The manager stayed true to their quality mandate rather than chasing momentum, suggesting a neutral to slightly positive risk appetite.
Capital Deployment
No information is provided about cash levels, changes in cash position, or net deployment activity during the quarter. The letter discusses relative performance and positioning but does not indicate whether capital was added or reduced. The manager appears to have maintained existing positions rather than making significant deployment or de-risking moves. Without cash level data or explicit deployment language, the score defaults to neutral.
Forward Guidance
The manager's forward guidance is cautious and conditional. They state that further market gains are possible but may not be reasonable without earnings growth and broader participation. There is no indication of aggressive deployment or scaling into positions. The tone suggests a wait-and-see approach, monitoring for valuation compression and market breadth rather than actively deploying capital into the current environment.
Language Signal
The letter contains more cautionary language than bullish language. Terms like elevated valuations, concentration risk, dot-com era comparisons, premium to historical averages, and may not be reasonable dominate the forward-looking sections. While the manager discusses successful positions, the overall directional language leans toward caution and risk awareness rather than opportunity. The balance tilts modestly negative.
Perceived Risk
The manager identifies multiple specific risks with meaningful discussion: market concentration at dot-com era levels, valuations at a 2.8% premium to historical averages, and the sustainability of gains without earnings growth. These are named, quantified concerns that occupy a significant portion of the market outlook section. However, the manager does not use alarmist language or predict a collapse, instead framing these as factors that may limit future returns. The risk discussion is substantive but measured, placing it in the moderate range.
Opportunity Density
The manager found selective opportunities in quality names outside the mega-cap momentum trade (Broadcom, Netflix, ServiceNow, Oracle) but the overall tone suggests a challenging environment for their strategy. The emphasis on market concentration, elevated valuations, and the need for broader participation implies that the opportunity set is somewhat constrained. The manager is finding ideas but characterizes the environment as requiring selectivity and patience rather than being rich with opportunities.
Time Horizon
The manager demonstrates a multi-year perspective by discussing 10-year concentration cycles and comparing current conditions to historical averages and the 1990s dot-com era. The quality growth mandate implies a longer-term investment approach focused on fundamentals rather than near-term momentum. However, the letter is quarterly in nature and discusses near-term performance drivers. The time horizon appears to be in the 2-4 year range based on the cyclical language and fundamental focus, placing it in the medium-to-long-term category.
Top Conviction Themes
Key Catalysts
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