| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.6% | -0.3% | 3.1% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 3.1% | 11.1% | 27.1% | -26.0% | 8.9% | 30.8% |
SGA's Global Growth portfolio returned -0.3% net in Q4 2025, underperforming the MSCI ACWI's 3.3% return, ending 2025 as the most challenging year since inception. The quarter highlighted extreme market divergence, with cyclical and momentum-driven assets dominating while quality growth strategies faced headwinds. Despite this, the portfolio generated 16% revenue growth and 12% earnings growth in 2025. Key contributors included Alphabet, TSMC, and Fast Retailing, while detractors were Arm Holdings, Microsoft, and MercadoLibre. New positions were initiated in Broadcom, Sea Limited, and Netflix. SGA expects AI CapEx growth to moderate due to structural constraints including power availability and skilled labor shortages. The portfolio trades at its steepest ever discount relative to the MSCI ACWI while cyclicals trade at peak multiples. This creates a favorable risk-reward opportunity as SGA expects market leadership to broaden and momentum dynamics to soften in 2026.
SGA builds high-conviction portfolios focused on quality growth businesses anticipated to achieve consistent mid-teens earnings growth with reduced variability, supported by predictable revenue and cash flow generation, designed to protect and reliably compound client wealth over time.
SGA expects a reversal in trends that have been driving markets and hurting relative performance, remaining patient and increasingly optimistic about prospects in 2026 and beyond. The portfolio is well positioned to benefit from a broadening of market leadership and softening of extreme momentum dynamics.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 8 2026 | 2025 Q4 | 1299.HK, 9983.T, ADYEN.AS, ALC, AMZN, AON, ARM, AVGO, BABA, CMG, CP, CRM, DHR, EXPN.L, GOOGL, HDB, INFY, INTU, IT, MELI, META, MSFT, NFLX, NOW, NVDA, SAP, SE, SNPS, SPGI, STE, TSM, UMG.AS, UNH, V, WM | AI, cyclicals, global, growth, Quality, valuation |
GOOG TSM 9983 JP AVGO NFLX SE MSFT MELI ARM NOW INFY |
AI capital expenditure growth is expected to moderate due to structural constraints including power availability, skilled labor shortages, and capital availability limits. Hyperscalers are approaching 90% of operating cash flows for CapEx spending, creating natural constraints on future growth rates. Quality factors including sales stability and high gross margins continued to underperform in 2025 as markets favored cyclical and momentum-driven assets. The portfolio's quality growth companies are trading at historically attractive relative valuations. Market leadership was dominated by momentum and cyclical assets while quality growth strategies faced headwinds. Extreme concentration and momentum effects created significant winners and losers independent of company fundamentals. |
| 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 |
Momentum2025 was characterized by extreme momentum dynamics with capital flowing into immediate winners while perceived losers saw unprecedented pressure. Market leadership concentrated in lower-quality, speculative, and cyclically sensitive stocks. The momentum trade has been exceptionally profitable short-term but timing the inevitable reversal remains challenging. |
Cyclical Speculation Leadership Volatility Reversal | |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | ARM | Arm Holdings plc | Information Technology | Semiconductors | Bull | NASDAQ | data centers, margin compression, R&D, royalties, semiconductor IP | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | NOW | ServiceNow, Inc. | Information Technology | Application Software | Bear | New York Stock Exchange | growth deceleration, Integration, M&A, Valuation risk, workflow automation | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | INFY | Infosys Limited | Information Technology | IT Consulting & Other Services | Bear | New York Stock Exchange | Artificial Intelligence, enterprise spending, IT services, Outsourcing, Tariff Uncertainty | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | GOOG | Alphabet Inc. | Communication Services | Internet Content & Information | Bull | NASDAQ | Artificial Intelligence, Cloud computing, digital advertising, Margins, Search | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | TSM | Taiwan Semiconductor Manufacturing Co. Ltd. | Information Technology | Semiconductor Foundries | Bull | New York Stock Exchange | Artificial Intelligence, CapEx, Foundry, Pricing power, semiconductors | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | 9983 JP | Fast Retailing Co., Ltd. | Consumer Discretionary | Apparel Retail | Bull | New York Stock Exchange | Apparel, Brand, Global Retail, Margins, supply chain | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | AVGO | Broadcom Inc. | Information Technology | Semiconductor Designers | Bull | NASDAQ | Custom Asics, inference, Margins, Networking, recurring revenue | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | NFLX | Netflix, Inc. | Communication Services | Streaming Services | Bull | NASDAQ | advertising, Free Cash Flow, Pricing power, Streaming, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | SE | Sea Limited | Consumer Discretionary | E-commerce | Bull | New York Stock Exchange | e-commerce, Emerging markets, Fintech, Logistics, platform | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | MSFT | Microsoft Corporation | Information Technology | System Software | Bull | NASDAQ | Artificial Intelligence, CapEx, cloud, Enterprise software, recurring revenue | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | MELI | MercadoLibre, Inc. | Consumer Discretionary | E-commerce | Bull | NASDAQ | e-commerce, Fintech, Latin America, Logistics, scale | Login |
| TICKER | COMMENTARY |
|---|---|
| 1299.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 9983.T | Fast Retailing was a top contributor during the quarter, driven by strong execution across its global operations. China returned to growth in August and September, with management guiding for further improvement in both revenue and profit in the coming fiscal year, a turnaround following topline decline in China this fiscal year. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| AON | increased exposure to insurance brokers (Aon and Willis Towers Watson) |
| ARM | Arm Holdings was a detractor during the quarter, despite a strong fiscal Q2 earnings report with revenue up 34% and profit 43%. Royalty revenue grew 21%, driven by triple digits data center growth and higher smartphone royalty from compute subsystem (CSS) customers. However, the company faced several headwinds that weighed on investor sentiment. Elevated R&D spending, mostly related to Arm's design service for SoftBank, will impact Arm's margin outlook for next year. |
| AVGO | The primary contributors to its performance were our exposures to Broadcom |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| CMG | The top-five detractors from returns were Fiserv, Chipotle, Constellation Software, Roper, and Floor & Décor. In the quarter, we exited Fiserv, Chipotle, and monday.com. |
| CP | Railroads operator transporting goods across Canada, the U.S. and Mexico |
| CRM | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| 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. |
| EXPN.L | Experian's shares were -1% in 2025. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. Experian is valued on a prospective 4.5% equity FCF yield. We have added to the Strategy's investments this year. |
| 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. |
| INFY | Infosys was a top contributor during the quarter, driven by steady execution, resilient recurring revenues, and strong performance in large-scale digital transformation projects. The company's industry-leading operating margins and high client retention supported robust free cash flow generation, while notable contract wins, such as the NHS workforce management solution in the UK, highlighted Infosys's ability to deliver innovative platforms for global clients. |
| INTU | ServiceNow (NOW) and Intuit (INTU) exemplify this dynamic, advancing meaningful AI initiatives that enhance customer value and deepen competitive advantages. Intuit is deploying intelligent agents and conversational tools like 'Ask Anything' to simplify complex financial tasks across QuickBooks and TurboTax. |
| IT | Gartner is a global leader in research services, with a long history of delivering valuable insights and data to business and technology leaders. In our view, the company has the best brand in IT research, supported by its scale and a compelling customer value proposition. These advantages have driven a long history of strong organic growth and robust free-cash-flow conversion. The stock price has declined meaningfully from recent highs due to investor concerns surrounding AI-related disruption. We believe these concerns are overstated. In our view, Gartner is well-positioned to reaccelerate organic growth due to continued high customer engagement and the large opportunity to sell to new and existing customers. We took advantage of the opportunity to buy shares in this well-managed company at a bargain price. |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| 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. |
| 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. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| SAP | We trimmed SAP SE. |
| SE | During the quarter, we initiated a new position in Sea Limited, a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. |
| SNPS | Key performance contributors in the month of December included AppLovin, Synopsys, and PAR Technology Corporation. |
| SPGI | Leading rating agency and data provider S&P Global Inc. contributed to performance. Shares rebounded from a pullback in September that stemmed from a competitor's cautious commentary around market demand and margins. S&P Global alleviated these concerns by delivering strong third quarter results and raising its full-year financial guidance. |
| STE | STE trades ~25x 2026 EPS and 21x 2027 EPS, versus SHC at 17x and 14x my estimates, respectively. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
| UMG.AS | UMG is a high-quality, capital-light, rapidly growing royalty on greater music consumption. 'Streaming 2.0' deals, which incorporate wholesale price increases, should lead to higher subscription revenue growth. New partners and product tiers should allow for better customer segmentation. AI can be a further tailwind to growth. |
| UNH | We also added back a full position in UnitedHealth |
| V | There were companies there such as Visa, which we own, as well as many we do not, and which would not likely be appropriate for this mandate. |
| WM | Waste Management (WM) is the largest integrated waste collection, transfer, and disposal company in North America. Its large active weight in the Fund reflects our confidence in the business. WM's unmatched landfill and transfer station network creates formidable barriers to entry, supporting durable pricing power and steady cash flows. We view the company as uniquely positioned to enhance returns through landfill gas capture and automation investments that improve efficiency, margins, and long-term profitability. |
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