| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.93% | -6.18% | -6.18% |
The Davenport Core Leaders Fund declined 6.18% in Q1 2026, slightly underperforming the S&P 500's 4.33% decline amid volatile market conditions. The quarter was marked by significant rotation away from technology and AI-related stocks due to concerns about massive capital expenditures with uncertain paybacks and disruption fears. Energy emerged as the only positive sector as conflict in Iran closed the Strait of Hormuz, driving oil prices up 77%. The fund benefited from energy-aligned holdings like EOG Resources and Quanta Services, while technology detractors included ServiceNow, Accenture, and Microsoft. Key portfolio activity included initiating a position in Constellation Energy Corp, leveraging its nuclear power generation capabilities amid growing data center demand. The managers added to beaten-down technology names while trimming others, maintaining their focus on high-quality businesses with durable competitive advantages. Despite near-term volatility, the team remains confident in their long-term approach of owning competitively advantaged growth companies positioned for sustainable value creation.
Focus on high quality, competitively advantaged growth companies with durable competitive advantages, strong returns on capital and management teams committed to disciplined, long term capital allocation.
Despite the range of challenges encountered during the quarter, our strategy remains consistent and focused on owning high quality, competitively advantaged growth companies that we believe are well positioned to deliver attractive long term results. We remain confident that staying grounded in business fundamentals provides the most effective path to long term risk adjusted returns across a wide range of economic and market conditions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 13 2026 | 2026 Q1 | AAPL, ACN, ADI, AVGO, CEG, EOG, ISRG, META, MRVL, MSFT, NOW, PWR, UNH | AI, energy, Iran, large cap, nuclear, Quality, technology |
CEG FWONK TKO CNS RYN |
Core Leaders Fund declined 6.18% in Q1 2026 as AI disruption fears hammered technology stocks while Iran conflict drove energy surge. Fund benefited from energy exposure but suffered from tech detractors. Managers used volatility to add to quality technology names and initiated nuclear power position via Constellation Energy. Long-term focus on high-quality, competitively advantaged growth companies remains unchanged despite market turbulence. |
| Jan 18 2026 | 2025 Q4 | AAPL, ACN, ADBE, AMZN, AVGO, CTAS, EOG, GOOG, ISRG, META, MRVL, MSFT, NOW, NVDA, ROK, SPOT, UBER, UNH, UNP, VRTX | AI, diversification, large cap, Quality, risk management, technology, value |
GOOG CTAS MRVL |
Davenport Core Leaders returned 10.71% in 2025, lagging the S&P 500's 17.88% due to disciplined diversification in an AI-dominated market. The Fund maintained focus on quality businesses with durable advantages while avoiding speculative momentum plays. Management believes their conservative approach will pay off as market leadership eventually broadens beyond expensive AI stocks. |
| Oct 20 2025 | 2025 Q3 | AAPL, ACN, AMZN, AVGO, EA, ELV, GOOGL, ISRG, META, MSFT, NOW, NVDA, NVO, ORCL, SPOT, TEL, UNH, UPS, WMT, XOM | AI, earnings, Fed policy, momentum, small caps, technology, Valuations |
NVDA NVO |
Davenport navigates Q3 2025's momentum-driven markets with disciplined value investing, facing headwinds from AI-fueled speculation and elevated S&P 500 valuations at 23x forward earnings. Despite supportive fiscal and monetary policy backdrop, the firm maintains conviction in finding asymmetric opportunities outside popular tech themes, expecting long-term outperformance while acknowledging near-term challenges from speculative market dynamics. |
| Jul 21 2025 | 2025 Q2 | AAPL, ACN, AMZN, AVGO, EA, ELV, GOOGL, ISRG, META, MSFT, NOW, NVDA, NVO, ORCL, SPOT, TEL, UNH, UPS, WMT, XOM | AI, growth, large cap, momentum, technology, Valuations, value |
NVDA PWR |
Davenport navigates strong Q3 markets driven by AI enthusiasm and policy support while maintaining valuation discipline. Despite S&P 500 gains of 8.12% quarterly and 14.83% year-to-date, the firm warns of elevated valuations at 23x forward earnings and speculative behavior. They focus on asymmetric opportunities outside momentum trades, positioning for potential market broadening. |
| Mar 31 2025 | 2025 Q1 | AAPL, ADBE, ADI, AMZN, AVGO, BN, BRK-B, DHR, ICE, MA, META, MSFT, NOW, NVDA, NVO, SPOT, TT, UBER, UNH, VRTX | AI, growth, large cap, Quality, risk management, technology | - | Core Leaders Fund outperformed during Q1's challenging environment by maintaining underweight positions in technology as the AI trade faltered. The fund focuses on high-quality, competitively advantaged growth companies while carefully managing Trump administration policy risks including tariffs and potential stagflation. Managers are selectively deploying capital into areas hit hard, expecting more moderate returns ahead. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AITechnology stocks and AI-related names experienced significant declines as investors questioned massive capital expenditures with uncertain paybacks. AI disruption narrative was most acute in software space, with prior winners becoming losers due to fear of disruption and loss of leadership status. |
Disruption Software Technology Capital Expenditures Uncertainty |
EnergyConflict in Iran led to closure of Strait of Hormuz and oil price surge of 77% for the quarter. Energy was the only S&P sector that rose in March, benefiting companies like EOG Resources and Quanta Services with energy-aligned businesses. |
Iran Oil Geopolitical Commodities Conflict | |
NuclearInitiated position in Constellation Energy Corp, the largest nuclear fleet operator in the US with 22 gigawatts of capacity. Nuclear provides competitive advantages including high barriers to entry and growing opportunities for premium-priced contracts as data center demand intensifies. |
Baseload Clean Energy Data Centers Electrification Power Generation | |
| 2025 Q4 |
AIAI and technology stocks led market gains in 2025, with massive capital expenditures driving investor excitement. However, the manager expresses concern about valuations and speculative behavior, noting that many AI investments appear driven by FOMO rather than clear returns on capital. |
Artificial Intelligence Technology Valuations Capital Expenditure |
ValuationsThe manager highlights extreme valuations across AI and momentum stocks, with 18 of the top 20 Russell 3000 performers being unprofitable companies. They note the S&P 500 trades at 22.14x forward earnings while the equal-weighted S&P is more reasonable at 16.74x. |
Expensive Multiples Earnings Overvalued | |
ValueThe manager emphasizes focusing on stocks that have been cast aside as investors chase momentum. They believe their conservative, valuation-sensitive approach will eventually be rewarded, drawing parallels to the late 1990s market dynamic. |
Undervalued Contrarian Conservative Opportunity | |
DividendsMultiple funds highlight strong dividend growth across holdings, with 36 of 42 holdings in one fund increasing dividends by an average of 7% year-over-year. Several companies continued multi-decade streaks of dividend increases. |
Income Growth Yield Consistency | |
| 2025 Q3 |
AIArtificial intelligence is driving enormous spending from tech titans and creating a powerful technology theme. AI has joined forces with monetary stimulus to embolden risk taking, with AI-linked stocks posting explosive moves higher since April. The technology is incredibly promising, though many perceived beneficiaries are prioritizing growth over profit. |
Technology Data Centers Semiconductors Cloud Growth |
ValuationsThe S&P 500 currently trades at approximately 23x earnings estimates for the next 12 months, which is high by historical standards. The equal-weighted S&P trades at 17x earnings estimates, still above recent norms. High-yield spreads stand at record lows, suggesting investors are accepting little compensation for additional risk. |
Risk Appetite Quality Value | |
MomentumMarket dynamics have favored momentum investing with winners continuing to win while losers keep losing. There has been little reward for having differentiated perspectives as investors have given chase to stocks hitting new 52-week highs. This has created a challenging environment for value-oriented managers. |
Growth Momentum Small Caps | |
| 2025 Q2 |
AIArtificial intelligence is prompting enormous spending from tech titans and has joined forces with monetary stimulus to embolden risk taking. AI is incredibly promising and the firm expects to participate via ownership of select technology leaders, though many perceived beneficiaries are prioritizing growth over profit. |
Technology Data Centers Semiconductors Cloud Growth |
ValuationsThe S&P 500 currently trades for approximately 23x earnings estimates for the next 12 months, which is high by historical standards. The equal-weighted S&P is more reasonable at 17x earnings estimates although still above recent norms. |
Risk Appetite Quality Value Earnings | |
MomentumThere has been little reward for having differentiated perspectives as winners keep on winning while losers keep on losing. Investors have flocked towards richly valued momentum stocks and given chase to stocks hitting new 52-week highs. |
Growth Quality Risk Appetite | |
| 2025 Q1 |
AIThe artificial intelligence investment theme waned in Q1 as the Magnificent 7 cooled off and declined 15.79%. Markets were due for a rotation away from hot, momentum-oriented areas and this proved to be the case as the AI trade faltered. Although we maintain robust exposure to technology companies including six of the seven companies in the Magnificent 7, we continue to remain underweight the sector. |
Artificial Intelligence Technology Semiconductors Data Centers GPUs |
TechnologyThe Information Technology sector experienced double-digit declines in the quarter. The Fund's relative underweight stance in the technology sector benefited quarterly performance. The decline in the Magnificent 7 significantly outpaced that of the broader market as interest in exposure to the Artificial Intelligence investment theme waned. |
Software Semiconductors Cloud Enterprise Software Tech Hardware | |
QualityOur strategy remains consistent and targeted towards owning high quality, competitively advantaged growth companies which we believe can support attractive performance over the long-term. We continue to exercise diligence in our position sizing and sector exposure decisions with thoughtful risk management and continuous optimization. |
Growth Competitive Advantage Risk Management Long Term Fundamentals |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 13, 2026 | Fund Letters | The Davenport Core Leaders Fund | CEG | Constellation Energy Corp | Utilities - Independent Power Producers | Electric Utilities | Bull | NASDAQ | Baseload Generation, clean energy, data centers, Electric Utilities, Electrification, investment grade, Nuclear Power, Power generation | Login |
| Apr 13, 2026 | Fund Letters | The Davenport Core Leaders Fund | FWONK | Liberty Formula One Group | Entertainment | Entertainment | Bull | NASDAQ | AI-Resistant, Contractual Revenue, entertainment, Formula One, live events, Media rights, Motorsports, Premium Content | Login |
| Apr 13, 2026 | Fund Letters | The Davenport Core Leaders Fund | TKO | TKO Group Holdings Inc | Entertainment | Entertainment | Bull | New York Stock Exchange | AI-Resistant, Combat Sports, Contractual Revenue, entertainment, live events, Media rights, Premium Content, UFC, WWE | Login |
| Apr 13, 2026 | Fund Letters | The Davenport Core Leaders Fund | CNS | Cohen & Steers Inc | Asset Management | Asset Management & Custody Banks | Bull | New York Stock Exchange | asset management, Fortress Balance Sheet, market leader, operating leverage, Real assets, Real Estate, REITs, Valuation Disparity | Login |
| Apr 13, 2026 | Fund Letters | The Davenport Core Leaders Fund | RYN | Rayonier Inc | REIT - Specialty | Specialized REITs | Bull | New York Stock Exchange | dividend yield, Hard assets, Housing recovery, inflation hedge, Real assets, Timber REIT, timberland, valuation discount | Login |
| Jan 18, 2026 | Fund Letters | George L. Smith III | GOOG | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cloud, scale, Search | Login |
| Jan 18, 2026 | Fund Letters | George L. Smith III | CTAS | Cintas Corporation | Industrials | Diversified Support Services | Bull | NASDAQ | buybacks, dividends, Execution, recurring revenue, services | Login |
| Jan 18, 2026 | Fund Letters | George L. Smith III | MRVL | Marvell Technology, Inc. | Information Technology | Semiconductors | Bull | NASDAQ | AI, custom chips, datacenters, Networking, Semi Conductors | Login |
| Oct 20, 2025 | Fund Letters | George L. Smith III | NVDA | NVIDIA Corp. | Information Technology | Semiconductors | Bull | NASDAQ | AI, data centers, Ecosystem, Gpu, growth, Pricing power, semiconductors | Login |
| Oct 20, 2025 | Fund Letters | George L. Smith III | NVO | Novo Nordisk A/S | Health Care | Pharmaceuticals | Bear | NYSE | Competition, Diabetes, GLP-1, healthcare, Obesity, pharmaceuticals, R&D | Login |
| Jul 21, 2025 | Fund Letters | George L. Smith III | NVDA | NVIDIA Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, datacenters, GPUs, semiconductors | Login |
| Jul 21, 2025 | Fund Letters | George L. Smith III | PWR | Quanta Services, Inc. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | backlog, Electrification, Grid, infrastructure, utilities | Login |
| TICKER | COMMENTARY |
|---|---|
| EOG | Notable positive impacts from companies with energy-aligned businesses were seen in both EOG Resources, Inc. (EOG) and Quanta Services, Inc. (PWR). |
| PWR | Notable positive impacts from companies with energy-aligned businesses were seen in both EOG Resources, Inc. (EOG) and Quanta Services, Inc. (PWR). |
| ADI | Despite broad weakness among technology stocks, individual holdings such as Analog Devices, Inc. (ADI) and Marvell Technology, Inc. (MRVL) contributed meaningfully to quarterly performance, reflecting solid contribution within a sector where the Fund remained significantly underweight. |
| MRVL | Despite broad weakness among technology stocks, individual holdings such as Analog Devices, Inc. (ADI) and Marvell Technology, Inc. (MRVL) contributed meaningfully to quarterly performance, reflecting solid contribution within a sector where the Fund remained significantly underweight. |
| NOW | During the first quarter, ServiceNow, Inc. (NOW), Accenture PLC (ACN), and Microsoft Corp (MSFT) were among the largest detractors within the Fund, as renewed pressure across the Technology sector—particularly concerns around artificial intelligence driven disruption—weighed on performance. |
| ACN | During the first quarter, ServiceNow, Inc. (NOW), Accenture PLC (ACN), and Microsoft Corp (MSFT) were among the largest detractors within the Fund, as renewed pressure across the Technology sector—particularly concerns around artificial intelligence driven disruption—weighed on performance. We added to positions in several technology companies including Accenture PLC (ACN), Apple, Inc. (AAPL), Microsoft Corp (MSFT), and ServiceNow, Inc. (NOW). |
| MSFT | During the first quarter, ServiceNow, Inc. (NOW), Accenture PLC (ACN), and Microsoft Corp (MSFT) were among the largest detractors within the Fund, as renewed pressure across the Technology sector—particularly concerns around artificial intelligence driven disruption—weighed on performance. We added to positions in several technology companies including Accenture PLC (ACN), Apple, Inc. (AAPL), Microsoft Corp (MSFT), and ServiceNow, Inc. (NOW). |
| ISRG | In addition, weakness among several Health Care holdings impacted results, with both Intuitive Surgical, Inc. (ISRG) and UnitedHealth Group, Inc. (UNH) declining during the period. |
| UNH | In addition, weakness among several Health Care holdings impacted results, with both Intuitive Surgical, Inc. (ISRG) and UnitedHealth Group, Inc. (UNH) declining during the period. |
| CEG | During the quarter, we initiated a new position in Constellation Energy Corp (CEG). Constellation Energy is a leading U.S. power generator whose growth potential is anchored in reliable baseload generation and demand for clean energy. The company operates the largest nuclear fleet in the United States, with approximately 22 gigawatts of capacity, generating more than 180 million megawatt hours annually. |
| AAPL | We added to positions in several technology companies including Accenture PLC (ACN), Apple, Inc. (AAPL), Microsoft Corp (MSFT), and ServiceNow, Inc. (NOW). |
| AVGO | We also trimmed investments in some technology holdings including Analog Devices, Inc. (ADI), Broadcom, Inc. (AVGO), and Meta Platforms, Inc. (META). |
| META | We also trimmed investments in some technology holdings including Analog Devices, Inc. (ADI), Broadcom, Inc. (AVGO), and Meta Platforms, Inc. (META). |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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