| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 9.4% | - |
Sawgrass Asset Management's Large Cap Quality Growth portfolio returned 9.4% in Q2 2020, underperforming the Russell 1000 Growth benchmark's 11.7% gain as market concentration intensified around mega-cap momentum stocks. The portfolio found success in non-Magnificent 7 quality names including Broadcom, Netflix, ServiceNow, and Oracle, but underweight positions in Microsoft, Meta, and Amazon, combined with not owning Tesla and Palantir, detracted from relative performance. Healthcare holdings faced significant headwinds from adverse headlines including investigations into fraudulent practices and clinical trial delays at contract research organizations. Trade tensions also pressured consumer-facing holdings like Lululemon and PepsiCo. Looking forward, the manager notes that market concentration has reached levels not seen since the 1990s dot-com era, with the top 10% of companies comprising over 10% of total market capitalization. Valuations are elevated at a 2.8% premium to historical averages. While further gains are possible, the manager believes they may require earnings growth to justify current multiples and broader market participation beyond the mega-cap leaders.
Sawgrass Asset Management runs a large-cap quality growth strategy that seeks to identify high-quality companies with strong fundamentals outside of the most crowded momentum trades, though this positioning led to underperformance in Q2 2020 as market concentration intensified and mega-cap technology stocks dominated returns.
The manager believes further market gains are possible in the second half of 2020 but may not be reasonable without corporate earnings growth that depresses valuation multiples and broadening market participation. The current concentration cycle is long in the tooth at 10 years, and valuations are at elevated levels with the market trading at a premium to historical averages.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 21 2020 | 2026 Q2 | AAPL, AMZN, AVGO, JNJ, LLY, LULU, META, MSFT, NFLX, NOW, ORCL, PEP, UNH | Concentration, growth, healthcare, large cap, momentum, Quality, technology | - | Sawgrass's large-cap quality growth strategy returned 9.4% in Q2 2020 but lagged the Russell 1000 Growth's 11.7% as mega-cap momentum dominated. Quality names like Broadcom and Netflix contributed, but underweights in Microsoft, Meta, and Amazon hurt. Healthcare faced adverse headlines. Market concentration has reached dot-com era levels with valuations at a premium to history, requiring earnings growth for further gains. |
| 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 |
|---|---|---|
| 2026 Q2 |
MomentumThe manager discusses the return of the FANG/Mega-cap momentum trade which drove market concentration and index returns. The portfolio struggled to keep pace with the benchmark due to underweight positions in major momentum stocks like Microsoft, Meta, and Amazon, as well as not owning names like Tesla and Palantir that led the rally. |
Mega Cap Concentration FANG Momentum |
QualityThe fund explicitly focuses on quality growth stocks and found success in non-Magnificent 7 quality names like Broadcom, Netflix, ServiceNow, and Oracle. The quality focus is central to the portfolio construction and strategy, though it underperformed the broader momentum trade during the quarter. |
Quality Growth Large Cap Fundamentals | |
| 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 |
|---|---|
| AVGO | Companies such as Broadcom, Netflix, ServiceNow, and Oracle were top contributors that aided the return of the index. |
| NFLX | Companies such as Broadcom, Netflix, ServiceNow, and Oracle were top contributors that aided the return of the index. |
| NOW | Companies such as Broadcom, Netflix, ServiceNow, and Oracle were top contributors that aided the return of the index. |
| ORCL | Companies such as Broadcom, Netflix, ServiceNow, and Oracle were top contributors that aided the return of the index. |
| AAPL | Underweight positions in other stocks such as Apple and Eli Lilly were not positive for the portfolio. |
| LLY | Underweight positions in other stocks such as Apple and Eli Lilly were not positive for the portfolio. |
| UNH | Underperformance in Health Care sector: United Health, Johnson & Johnson. |
| JNJ | Underperformance in Health Care sector: United Health, Johnson & Johnson. |
| LULU | Tariff-related sell offs: Lululemon, PepsiCo. |
| PEP | Tariff-related sell offs: Lululemon, PepsiCo. |
| 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 | |||
