| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 3.2% | 0% |
Sawgrass Asset Management's Large Cap Quality Growth portfolio returned 3.2% in Q4 2025, outperforming the Russell 1000 Growth Index by 2.1%. The portfolio benefited from broadening investor demand outside the Mag 7 and rotation into more attractively valued sectors, particularly healthcare. Strong contributors included biotech stocks Eli Lilly, Incyte, and United Therapeutics, plus chip stocks Advanced Micro Devices, Broadcom, and Applied Materials that avoided AI-related negative sentiment. Detractors included traditionally defensive stocks AutoZone, Comcast, and Zoetis, along with software names ServiceNow and Workday pressured by AI efficiency concerns. The manager notes that earnings growth rather than multiple expansion drove 2025 gains, reflecting increased market preference for fundamentals. With markets at elevated valuations after three consecutive years of double-digit gains, the portfolio's positioning in high-quality companies at attractive valuations could benefit if the fundamentals-focused trend continues into 2026.
Focus on attractively valued high-quality companies positioned to benefit from a potential shift toward fundamentals-driven returns rather than momentum or multiple expansion.
If the trend toward fundamentals continues into 2026, returns may become more dependent on earnings delivery and balance-sheet strength rather than momentum or macro-driven optimism. The portfolio's positioning in attractively valued high-quality companies could benefit from this environment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | AMAT, AMD, AVGO, AZO, CMCSA, DHR, INCY, LLY, NOW, UTHR, WDAY, ZTS | AI, Biotechnology, growth, healthcare, Quality, Rotation, semiconductors, technology | - | Portfolio outperformed on healthcare rotation and selective tech strength while avoiding AI-related software weakness. Manager sees shift toward fundamentals-driven returns benefiting their high-quality positioning despite elevated market valuations. Healthcare biotech names and select chip stocks drove gains while defensive stocks and AI-threatened software lagged in risk-on environment. |
| Jul 21 2025 | 2025 Q2 | AAPL, AMZN, AVGO, IQV, LLY, META, MSFT, NFLX, NOW, ORCL, PLTR, TSLA, UNH | AI, Concentration, growth, healthcare, large cap, momentum, Quality, technology | - | Sawgrass's quality growth strategy lagged momentum-driven markets in Q2, returning 9.4% versus the benchmark's 17.7%. AI names like Broadcom and ServiceNow outperformed while healthcare holdings struggled. Elevated valuations at 44% premium to historical averages and 1930s-level market concentration raise sustainability concerns despite potential for continued growth. |
| May 13 2025 | 2025 Q1 | ADBE, AVGO, AZO, CBOE, LULU, MCD, META, NOW, NVDA, TJX | growth, large cap, Outperformance, Quality, volatility | - | Large Cap Quality Growth outperformed by 400 basis points in Q1, declining 6% versus Russell 1000 Growth's 10% drop. Quality positioning and low volatility focus benefited from investor flight to safety amid tariff uncertainty. Consumer discretionary and financial holdings contributed while semiconductor export restrictions and communication sector underweights created headwinds. Market fundamentals remain supportive despite elevated uncertainty. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIManager draws parallels between today's AI-driven environment and the 2014-15 oil collapse, warning that AI has become a macroeconomic assumption embedded in capital expenditure plans and valuations. Physical constraints like energy intensity and grid limitations complicate AI scalability assumptions. |
Artificial Intelligence Data Centers Energy Infrastructure Valuations Technology |
EnergyAI infrastructure's profound energy intensity creates economic sensitivity to power pricing and grid reliability. Rising electricity prices in data-center regions and utility capacity constraints introduce uncertainty that complicates AI economics and scalability assumptions. |
Electricity Data Centers Grid Infrastructure Power Pricing Utilities | |
SemiconductorsSemiconductor manufacturers benefited from reinforcing AI narrative loop where demand justified capital spending and growth projections. However, many AI-exposed companies now trade at valuation multiples assuming near-flawless execution. |
Chip Manufacturers AI Infrastructure Valuations Capital Spending | |
Small CapsSMID Cap strategy faced challenging environment with significant dispersion beneath strong headline returns. Many sectors lagged materially while capital flowed with increasing concentration toward perceived certainty in large-cap AI names. |
SMID Cap Market Dispersion Sector Performance Capital Flows | |
| 2025 Q2 |
AIThe portfolio benefited from AI-related names including Broadcom, Netflix, ServiceNow, and Oracle which were top contributors. The strategy also owned Magnificent 7 AI leaders like Microsoft, Meta, and Amazon though underweight positions limited relative performance. |
Broadcom ServiceNow Oracle Microsoft Meta |
QualityThe fund focuses on high-quality companies but faced challenges in healthcare quality names due to investigations into United Health's potentially fraudulent practices and clinical trial delays at IQVIA. The quality approach struggled against momentum-driven markets. |
Healthcare United Health IQVIA Quality | |
MomentumThe quarter was dominated by FOMO trading and momentum names like Tesla and Palantir. The portfolio's omission of these heavy momentum stocks hampered relative performance as speculative trading intensified and market concentration increased. |
Tesla Palantir FOMO Speculation | |
| 2025 Q1 |
QualityThe portfolio's focus on quality companies with low price volatility helped limit losses during the quarter's elevated volatility. Quality positioning benefited from investor flight towards quality companies amid market uncertainty. |
Quality Volatility Defensive |
VolatilityElevated market volatility characterized the quarter as major indices erased Q4 gains. The portfolio's lower risk positioning and preference for low volatility stocks helped outperform during this period of nervous investor sentiment. |
Volatility Risk Market |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| AMAT | Top gainers in the Fund this quarter included Applied Materials (+26%). During the quarter, we trimmed the Fund's holding in Applied Materials as it rallied |
| 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. |
| AVGO | The primary contributors to its performance were our exposures to Broadcom |
| AZO | We initiated two new positions during the year—Greggs and AJ Bell, whilst reducing our exposure to NEXT and Compass Group; and selling out of AutoZone entirely during September. |
| CMCSA | Within the portfolio, stocks like AutoZone, Comcast, and Zoetis were all punished for having perceived headwinds to already lowered expectations for growth. |
| DHR | After lagging through the first three quarters of 2025, Danaher's stock rebounded during Q4 as bioprocessing, life science, and diagnostics demand continued to recover from a cyclical trough. On the 3Q25 call, management established conservative 2026 growth expectations. Revenue is expected to continue to lag long-term trends at 3-6% but improve throughout the year. |
| INCY | Biopharma Eli Lilly, biotech stocks Incyte and United Therapeutics, and life sciences giant Danaher all contributed positively to strong Q4 performance. |
| LLY | Eli Lilly shares were a top performer in 4Q25 after delivering strong Q3 2025 earnings in October. Revenue rose 54% year-over-year to $17.6 billion, and adjusted EPS of $7.02 beat consensus of $6.02. Growth was driven by its GLP-1 franchises, Mounjaro and Zepbound, where sales more than doubled year-over-year, alongside strength in other therapeutic areas. Management raised full-year guidance for both revenue and earnings, reinforcing investor confidence in the company's growth outlook. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| UTHR | Biopharma Eli Lilly, biotech stocks Incyte and United Therapeutics, and life sciences giant Danaher all contributed positively to strong Q4 performance. |
| WDAY | Finally, we have exited our relatively small position in Workday. The company's growth has decelerated the past few quarters and the Financials segment of the business (~25% of sales) is growing slower than we believe it should be. This is a company we may revisit at a later date but, for now, feel that we have better opportunities in other areas of the portfolio. |
| ZTS | ZTS: $6B authorized August 2024; $1.5B used as of September 2025 |
| 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 | |||
