| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.4% | 4.2% | 22.1% |
| 2025 |
|---|
| 22.1% |
The Baird Chautauqua Global Growth Fund returned 4.18% in Q4 2025, outperforming its benchmark as international equities delivered their widest annual outperformance versus U.S. equities since the Great Financial Crisis. A weakening dollar, narrowing rate differentials, and attractive relative valuations contributed to the reversal. The quarter proved challenging as several themes reversed sharply, with Greater China holdings giving back gains amid profit-taking and value/cyclical leadership persisting. AI-related infrastructure demand drove materials and memory semiconductor strength, while application software faced disruption concerns. Significant U.S.-China trade tension de-escalation provided relief, though tariff rates remain elevated. Central bank policies diverged with the Fed continuing easing while the BOJ raised rates to three-decade highs. The fund maintains its quality growth philosophy, prioritizing businesses aligned with secular trends that have strong competitive advantages. Portfolio companies are chosen for high profit margins, strong balance sheets, and consistent cash generation. The manager enters 2026 with cautious optimism, believing these quality characteristics will endure in challenging macroeconomic conditions.
The fund maintains a concentrated, conviction-weighted approach focused on quality growth companies with strong competitive advantages, healthy profit margins, robust balance sheets, and consistent cash flow generation that can withstand external economic shocks and capitalize on secular growth opportunities.
Looking ahead, we enter the new year with cautious optimism. Trade agreements have removed the most severe tail risks, but the underlying picture is mixed: inflation remains above target in the U.S., labor markets are softening, and central banks are no longer moving in unison. The key question for 2026 is whether the Fed can continue easing or whether persistent inflation forces a pause. Europe offers relative stability, though structural headwinds persist. And in China, policymakers have signaled a shift in priorities toward household incomes, but execution remains uncertain as export tailwinds may fade.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 6 2026 | 2025 Q4 | 2269.HK, 6098.T, 6954.T, ASML, BABA, BEKE, BEPC, CSU.TO, D05.SI, GALP.SW, GOOGL, INCY, LULU, MA, MU, PRX.AS, REGN, RYA.L, SCHW, SE, TEAM, TEMN.SW, TJX | AI, China, growth, international, rates, semiconductors, Trade Policy, value | - | AI-related infrastructure demand drove materials and memory semiconductor outperformance. Fanuc showcased significant advancements in AI-enabled robotics with commercialization expected in coming years. Application software and… |
| Oct 13 2025 | 2025 Q3 | 6160 JP, ADYEN NA, BABA, CSU, MU, NVO CN | Artificial Intelligence, China, healthcare, technology, Trade tariffs | BABA | Global equities rallied as tariffs eased and monetary policy loosened. The fund remains focused on secular growth areas such as AI, digital transformation, and healthcare,… |
| Aug 7 2025 | 2025 Q2 | 2423 HK, 688235 CH, FFH CN, MU, NVDA, REGN, RYA ID, SAF FP, WCN | Competitive Advantage, Compounding, earnings, growth, secular trends |
SAF FP FFH CN 2423 HK NVDA |
The commentary emphasizes secular growth businesses with durable earnings expansion across global markets. Management focuses on competitive advantages, reinvestment opportunities, and balance sheet strength. Short-term… |
| 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 |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 2025 Q3 |
China Exposure |
|
GrowthGrowth retained a narrow edge for the full year in large caps despite underperforming in Q4. Technology and Communication Services delivered exceptional longer-term returns, though near-term leadership may remain more evenly distributed. A sustained Growth resurgence will likely depend on renewed confidence in AI-driven earnings. |
Growth Technology AI Communication Services Mega-cap | |
TechnologyTechnology and Communication Services remained recipients of majority of Capex spending. Mega cap Tech leaders saw earnings grow 31% and stocks advance 24%, lowering P/Es to reasonable levels. Larger cap Technology companies should continue to lead the market despite being an enormous part of the growth benchmark. |
Semiconductors Cloud Software Hardware Innovation | |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 13, 2025 | Fund Letters | Jesse Flores | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | - | AI, China, cloud, e-commerce, growth, Value | Login |
| Aug 7, 2025 | Fund Letters | Jesse Flores | SAF FP | Safran S.A. | Industrials | Aerospace & Defense | Bull | Euronext Stock Exchange | aftermarket, backlog, Engines, Pricing, Utilization | Login |
| Aug 7, 2025 | Fund Letters | Jesse Flores | FFH CN | Fairfax Financial Holdings Limited | Financials | Property & Casualty Insurance | Bull | Toronto Stock Exchange | Bookvalue, Catastrophes, Reinsurance, Repurchases, underwriting | Login |
| Aug 7, 2025 | Fund Letters | Jesse Flores | 2423 HK | KE Holdings Inc. | Real Estate | Real Estate Services | Bull | New York Stock Exchange | China, COST, guidance, Housing, Property | Login |
| Aug 7, 2025 | Fund Letters | Jesse Flores | NVDA | NVIDIA Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, datacenters, Export controls, GPUs | Login |
| TICKER | COMMENTARY |
|---|---|
| 2269.HK | WuXi Biologics' new order momentum remains robust, and its capex plan is progressing as scheduled. The stock had appreciated over 100% in the first three quarters of the year and faced some profit-taking in 4Q25. |
| 6954.T | Fanuc reported September quarter results that beat consensus estimates, raising full-year operating profit guidance by 10% on demand recovery and improved utilization rates. Robot orders were particularly strong, up 38% y/y, driven by reshoring-related automation demand in North America, European automation investments, and new energy vehicle spending in China. Furthermore, at an international robot show in December, Fanuc showcased significant advancements in AI-enabled robotics, with commercialization that may arrive in the coming years. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| 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. |
| BEKE | Chinese property platform KE Holdings also finished lower as investor confidence waned amid reported margins and earnings momentum reported lower than expectations, overshadowing headline revenue growth. |
| CSU.TO | Broad pressure on the stocks of software companies enabled us to initiate a position in Constellation Software. This is a unique business we had on our radar for a long time but were never able to purchase due to its high valuation. At its core, the company is a permanent capital vehicle designed to acquire 'vertical market software' (VMS) businesses and hold them indefinitely. |
| D05.SI | We have followed the company for many years, but aside from occasional trades, we had not felt compelled to build a meaningful position in a business—even one that is an industry leader—whose business is traditionally mainly asset-based lending and whose earnings are still meaningfully influenced by interest-rate cycles. Over the previous two years, we have been increasingly impressed by the extent to which DBS has converted scale and technology into a structural economic moat. |
| 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. |
| INCY | Biopharma Eli Lilly, biotech stocks Incyte and United Therapeutics, and life sciences giant Danaher all contributed positively to strong Q4 performance. |
| LULU | This downward pressure was partially mitigated by the 28% increase in Lululemon's stock from our purchase price of $162 per share. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MU | Core gains were led by investments in the Technology sector including Micron |
| PRX.AS | Prosus is a core, long-term holding primarily valued for its substantial stake in Tencent, a company we believe has significant growth potential and a strong global competitive advantage. A key element of our thesis is that Prosus's current market capitalization is less than the value of its Tencent holding alone. In addition to the Tencent stake, Prosus holds an estimated $35 billion in other listed and unlisted assets. |
| REGN | Performance was driven by strength in large-cap longs, specifically Regeneron |
| RYA.L | After posting an in-line September quarter and providing a better-than-expected outlook for the holiday travel season based on forward bookings, Ryanair outlined a bullish long-term outlook. Based on continued industry capacity constraints and the company's widening unit cost advantage, Ryanair believes it can raise fares while maintaining its significant value gap to competitors and increase net profit per passenger from €10 today to €12 to €14 over the next decade. |
| SCHW | We also added to The Charles Schwab Corporation, which is benefiting from positive earnings revisions, expanding margins, and higher capital returns after having repaid nearly all of its high cost funding. |
| 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. |
| TEAM | We sold Atlassian, which produces collaboration software, as we reduced our overweight exposure to software because we feel that AI has widened the range of outcomes for predominantly seat-based revenue models. |
| TEMN.SW | Temenos reported solid 3Q25 results and raised FY25 guidance. Management commented on several large deals in the pipeline for 4Q25 and a stable sales environment. The strong results amid negative market sentiment post the recent CEO departure led to significant price appreciation. |
| TJX | TJX Companies, an off-price retailer, delivered solid third-quarter results and had a strong start to the fourth quarter as better merchandise availability yielded broader and higher-quality assortments that supported traffic, same-store sales and earnings growth. |
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