The Davenport Core Leaders Fund

Investor Summary

The fund is managed by a highly experienced three-person team led by George L. Smith III, CFA, who serves as Chairman of the Investment Policy Committee and Managing Director with 27 years of investment experience and 24 years at Davenport. The team includes co-managers Jeff Omohundro, CFA, and Christopher G. Pearson, CFA, all bringing extensive expertise in equity management. Founded in 1983 as the first portfolio launched by Davenport Asset Management, the fund has established a long track record of disciplined investment management with strong historical performance including 17.0% annualized returns over three years.

Fund Strategy

The Davenport Core Leaders Fund focuses on high-quality growth opportunities by investing in market-leading companies with strong capital appreciation potential. The fund targets companies with robust management, solid balance sheets, and proven results, applying rigorous selection criteria including market leadership, above-average earnings growth, prudent capital allocation, financial strength, and disciplined management. The investment approach emphasizes companies that typically outperform during volatile market conditions while incorporating defined objectives, investment themes, portfolio construction strategies, and risk management practices.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
8.29%	12.24%	5.3%

Executive Summary

The Davenport Core Leaders Fund returned 12.24% in Q2 2026, trailing the S&P 500's 15.20% gain due to underweight positioning in semiconductors, which experienced an unprecedented 88% quarterly rally. The semiconductor industry now represents a record 19% of the S&P 500 and trades at 11x next 12-month sales, up from 5x in early 2023. While the managers acknowledge strong near-term fundamentals for AI infrastructure, they express concern about extreme investor crowding and the fundamental risk that AI model revenue may not support the entire value chain. Top contributors included Marvell Technology, Palo Alto Networks, and UnitedHealth Group, while Accenture detracted on concerns about structural challenges from AI-driven consulting budget shifts. The managers trimmed outperformers and added to quality names like Constellation Energy and Berkshire Hathaway, viewing them as better risk/reward opportunities. They initiated Stryker as a high-quality medical device compounder. The team remains committed to intrinsic value investing despite significant opportunity cost, believing current market concentration and valuation extremes are unsustainable. They expect eventual market broadening to favor their quality-focused, diversified portfolio of compounding businesses.

Core Thesis

The Davenport Core Leaders Fund maintains a disciplined focus on owning market-leading franchises with strong balance sheets, high returns on invested capital, and management teams capable of compounding intrinsic value across full market cycles, while avoiding the temptation to chase momentum in overvalued areas despite near-term opportunity cost.

Forward Outlook

The managers expect that environments in which market breadth is limited and returns are concentrated in a small number of highly cyclical names have not persisted indefinitely. A broadening of participation, a moderation in semiconductor cyclical enthusiasm, or a shift in the rate outlook would each represent potential tailwinds for the type of businesses they own. They remain focused on owning market-leading franchises with strong balance sheets, high returns on invested capital, and management teams capable of compounding intrinsic value across full market cycles. Their process is unchanged, their conviction in the underlying holdings is intact, and their attention remains fixed on the long-term interests of shareholders.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 27 2026	2026 Q2	AAPL, ABT, ACN, ADI, AMZN, BRK/B, CEG, EOG, GOOGL, ICE, ISRG, MRVL, MSFT, NVDA, PANW, ROK, SYK, UNH	AI, large cap, Market Concentration, Quality, semiconductors, technology, valuation, value	-	Core Leaders returned 12.24% in Q2 but lagged the S&P 500's 15.20% due to underweight semiconductor exposure during an 88% sector rally. The managers view unprecedented investor crowding and 11x sales valuations as unsustainable despite strong AI infrastructure fundamentals. They trimmed winners like Marvell and UnitedHealth while adding defensive quality positions including Constellation Energy and Berkshire Hathaway. The team maintains discipline on intrinsic value investing, expecting eventual market broadening to favor their quality-focused approach.
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.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 27 2026

2026 Q2

AAPL, ABT, ACN, ADI, AMZN, BRK/B, CEG, EOG, GOOGL, ICE, ISRG, MRVL, MSFT, NVDA, PANW, ROK, SYK, UNH

AI, large cap, Market Concentration, Quality, semiconductors, technology, valuation, value

Core Leaders returned 12.24% in Q2 but lagged the S&P 500's 15.20% due to underweight semiconductor exposure during an 88% sector rally. The managers view unprecedented investor crowding and 11x sales valuations as unsustainable despite strong AI infrastructure fundamentals. They trimmed winners like Marvell and UnitedHealth while adding defensive quality positions including Constellation Energy and Berkshire Hathaway. The team maintains discipline on intrinsic value investing, expecting eventual market broadening to favor their quality-focused approach.

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 Q2	AI AI infrastructure drove exceptional market gains in Q2 2026, with semiconductors advancing 88% in the quarter. The managers acknowledge insatiable demand for computing power bodes well for the AI infrastructure complex in the near-to-intermediate term, but express concern about investor crowding at unprecedented levels and fundamental risk that the revenue pool from AI models may not be large enough to support the entire value chain. They warn of potential 'Wile E. Coyote moment' where marginal buyers could face material declines.	Semiconductors Infrastructure Computing Hyperscalers Crowding
	Semiconductors The semiconductor index advanced 88% in Q2 2026, its best quarter ever, and is now up 102% year-to-date. The semi-industry now accounts for a record 19% of the S&P 500 and trades at roughly 11x next 12-month sales, up from about 5x at the start of 2023. The managers hold positions in MRVL, NVDA, and ADI but maintain less exposure than the indices, viewing current valuations with caution despite strong business fundamentals.	Valuation Market concentration Sales multiples Cyclicality
	Cybersecurity Palo Alto Networks added meaningfully to Fund performance, benefiting from platform consolidation trends and a sharp rerating of security software. The company represents a core holding where business fundamentals continue to compound at attractive rates.	Platform consolidation Security software Rerating
	Managed Care UnitedHealth Group contributed strongly as the company recovered from prior-quarter headwinds and reasserted its scale advantages in managed care. The managers trimmed the position twice during the quarter after the sharp recovery to bring position size back in line with their risk framework.	Scale advantages Recovery Healthcare
	Automation Rockwell Automation helped results on improving industrial capex signals and factory automation demand tied to reshoring. The position reflects the managers' view of improving industrial fundamentals and domestic manufacturing trends.	Factory automation Reshoring Industrial capex
	Nuclear The managers added to Constellation Energy on weakness, viewing the pullback as an opportunity to increase exposure to a differentiated nuclear generation asset that remains structurally advantaged in a power-hungry AI economy. They see the position as having long-term value despite near-term volatility.	Power generation AI infrastructure Energy demand
	Value The managers emphasize their commitment to intrinsic value investing despite significant opportunity cost from avoiding momentum stocks. They note many value-oriented areas have languished as investors sell positions across virtually all other industries to fund the AI trade, with the notion of intrinsic value being thrown out the door in favor of AI FOMO. They struggle to give chase to names that have been working and instead focus on areas where risk/reward profiles look much more favorable.	Intrinsic value Opportunity cost Risk/reward Discipline
	Medical Devices The managers initiated a new position in Stryker, a high-quality medical device franchise with durable growth in orthopedics, neurotechnology, and surgical instruments. They view Stryker's disciplined capital allocation, consistent margin expansion, and long runway in an aging demographic environment as a natural fit for the Fund's emphasis on compounding businesses with defensible competitive positioning.	Orthopedics Surgical instruments Demographics Margin expansion
2026 Q1	AI Technology 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
	Energy Conflict 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
	Nuclear Initiated 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	AI AI 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
	Valuations The 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
	Value The 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
	Dividends Multiple 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	AI Artificial 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
	Valuations The 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
	Momentum Market 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	AI Artificial 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
	Valuations The 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
	Momentum There 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	AI The 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
	Technology The 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
	Quality Our 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

QUARTER

THEMES

AI

AI infrastructure drove exceptional market gains in Q2 2026, with semiconductors advancing 88% in the quarter. The managers acknowledge insatiable demand for computing power bodes well for the AI infrastructure complex in the near-to-intermediate term, but express concern about investor crowding at unprecedented levels and fundamental risk that the revenue pool from AI models may not be large enough to support the entire value chain. They warn of potential 'Wile E. Coyote moment' where marginal buyers could face material declines.

Semiconductors Infrastructure Computing Hyperscalers Crowding

Semiconductors

The semiconductor index advanced 88% in Q2 2026, its best quarter ever, and is now up 102% year-to-date. The semi-industry now accounts for a record 19% of the S&P 500 and trades at roughly 11x next 12-month sales, up from about 5x at the start of 2023. The managers hold positions in MRVL, NVDA, and ADI but maintain less exposure than the indices, viewing current valuations with caution despite strong business fundamentals.

Valuation Market concentration Sales multiples Cyclicality

Cybersecurity

Palo Alto Networks added meaningfully to Fund performance, benefiting from platform consolidation trends and a sharp rerating of security software. The company represents a core holding where business fundamentals continue to compound at attractive rates.

Platform consolidation Security software Rerating

Managed Care

UnitedHealth Group contributed strongly as the company recovered from prior-quarter headwinds and reasserted its scale advantages in managed care. The managers trimmed the position twice during the quarter after the sharp recovery to bring position size back in line with their risk framework.

Scale advantages Recovery Healthcare

Automation

Rockwell Automation helped results on improving industrial capex signals and factory automation demand tied to reshoring. The position reflects the managers' view of improving industrial fundamentals and domestic manufacturing trends.

Factory automation Reshoring Industrial capex

Nuclear

The managers added to Constellation Energy on weakness, viewing the pullback as an opportunity to increase exposure to a differentiated nuclear generation asset that remains structurally advantaged in a power-hungry AI economy. They see the position as having long-term value despite near-term volatility.

Power generation AI infrastructure Energy demand

Value

The managers emphasize their commitment to intrinsic value investing despite significant opportunity cost from avoiding momentum stocks. They note many value-oriented areas have languished as investors sell positions across virtually all other industries to fund the AI trade, with the notion of intrinsic value being thrown out the door in favor of AI FOMO. They struggle to give chase to names that have been working and instead focus on areas where risk/reward profiles look much more favorable.

Intrinsic value Opportunity cost Risk/reward Discipline

Medical Devices

The managers initiated a new position in Stryker, a high-quality medical device franchise with durable growth in orthopedics, neurotechnology, and surgical instruments. They view Stryker's disciplined capital allocation, consistent margin expansion, and long runway in an aging demographic environment as a natural fit for the Fund's emphasis on compounding businesses with defensible competitive positioning.

Orthopedics Surgical instruments Demographics Margin expansion

2026 Q1

AI

Technology 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

Energy

Conflict 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

Nuclear

Initiated 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

AI

AI 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

Valuations

The 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

Value

The 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

Dividends

Multiple 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

AI

Artificial 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

Valuations

The 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

Momentum

Market 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

AI

Artificial 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

Valuations

The 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

Momentum

There 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

AI

The 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

Technology

The 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

Quality

Our 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

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

Apr 13, 2026

Fund Letters

The Davenport Core Leaders Fund

FWONK

Liberty Formula One Group

Entertainment

Bull

NASDAQ

AI-Resistant, Contractual Revenue, entertainment, Formula One, live events, Media rights, Motorsports, Premium Content

Apr 13, 2026

Fund Letters

The Davenport Core Leaders Fund

TKO

TKO Group Holdings Inc

Entertainment

Bull

New York Stock Exchange

AI-Resistant, Combat Sports, Contractual Revenue, entertainment, live events, Media rights, Premium Content, UFC, WWE

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

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

Jan 18, 2026

Fund Letters

George L. Smith III

GOOG

Alphabet Inc.

Communication Services

Interactive Media & Services

Bull

NASDAQ

advertising, AI, cloud, scale, Search

Jan 18, 2026

Fund Letters

George L. Smith III

CTAS

Cintas Corporation

Industrials

Diversified Support Services

Bull

NASDAQ

buybacks, dividends, Execution, recurring revenue, services

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

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

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

Jul 21, 2025

Fund Letters

George L. Smith III

NVDA

NVIDIA Corporation

Information Technology

Semiconductors & Semiconductor Equipment

Bull

NASDAQ

AI, CapEx, datacenters, GPUs, semiconductors

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

TICKER	COMMENTARY
MRVL	Marvell Technology, Inc. (MRVL) was the Fund's largest contributor as custom silicon demand and hyperscaler engagement accelerated.
PANW	Palo Alto Networks, Inc. (PANW) added meaningfully as well, benefiting from platform consolidation trends and a sharp rerating of security software.
UNH	UnitedHealth Group, Inc. (UNH) contributed strongly as the company recovered from prior-quarter headwinds and reasserted its scale advantages in managed care. We trimmed UnitedHealth Group, Inc. (UNH) twice during the quarter, taking advantage of the sharp recovery in the stock to bring the position size back in line with our risk framework.
ROK	Rockwell Automation, Inc. (ROK) helped results on improving industrial capex signals and factory automation demand tied to reshoring.
GOOGL	Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), NVIDIA Corp (NVDA), and Analog Devices, Inc. (ADI) each added to results as well, reflecting business fundamentals that in most cases continue to compound at attractive rates.
AMZN	Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), NVIDIA Corp (NVDA), and Analog Devices, Inc. (ADI) each added to results as well, reflecting business fundamentals that in most cases continue to compound at attractive rates.
NVDA	Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), NVIDIA Corp (NVDA), and Analog Devices, Inc. (ADI) each added to results as well, reflecting business fundamentals that in most cases continue to compound at attractive rates.
ADI	Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), NVIDIA Corp (NVDA), and Analog Devices, Inc. (ADI) each added to results as well, reflecting business fundamentals that in most cases continue to compound at attractive rates.
ACN	Accenture PLC (ACN) was the Fund's largest detractor. The weakness reflects a slowdown in discretionary consulting spending as clients redirect budgets toward internal AI implementation and rationalize legacy digital transformation programs. We view part of this pressure as cyclical, but part as what may be an emerging structural challenge that we are monitoring closely.
ICE	Intercontinental Exchange, Inc. (ICE) also weighed on results, giving back some of its strong prior gains as mortgage technology growth expectations were reset.
EOG	EOG Resources, Inc. (EOG) detracted on softer crude prices following the initial Iran-related spike.
CEG	Constellation Energy Corp (CEG) declined in an idiosyncratic pullback within an otherwise strong power theme. We view the ISRG, ABT, and CEG issues as temporary and unrelated to the long-term thesis. We added to Constellation Energy Corp (CEG) on weakness, viewing the pullback as an opportunity to increase exposure to a differentiated nuclear generation asset that we believe remains structurally advantaged in a power-hungry AI economy.
ISRG	Intuitive Surgical, Inc. (ISRG) and Abbott Laboratories (ABT) each gave back modest ground on procedure volume and device mix concerns respectively. We view the ISRG, ABT, and CEG issues as temporary and unrelated to the long-term thesis.
ABT	Intuitive Surgical, Inc. (ISRG) and Abbott Laboratories (ABT) each gave back modest ground on procedure volume and device mix concerns respectively. We view the ISRG, ABT, and CEG issues as temporary and unrelated to the long-term thesis.
BRK.B	We also added to Berkshire Hathaway, Inc. (BRK.B), both as a source of defensive quality and as a form of embedded optionality on Berkshire's substantial cash position at a moment when we see limited margin of safety in the broader index.
SYK	We initiated a new position in Stryker Corp (SYK), a high-quality medical device franchise with durable growth in orthopedics, neurotechnology, and surgical instruments. Stryker's disciplined capital allocation, consistent margin expansion, and long runway in an aging demographic environment make it a natural fit for the Fund's emphasis on compounding businesses with defensible competitive positioning.

TICKER

COMMENTARY

MRVL

Marvell Technology, Inc. (MRVL) was the Fund's largest contributor as custom silicon demand and hyperscaler engagement accelerated.

PANW

Palo Alto Networks, Inc. (PANW) added meaningfully as well, benefiting from platform consolidation trends and a sharp rerating of security software.

UNH

UnitedHealth Group, Inc. (UNH) contributed strongly as the company recovered from prior-quarter headwinds and reasserted its scale advantages in managed care. We trimmed UnitedHealth Group, Inc. (UNH) twice during the quarter, taking advantage of the sharp recovery in the stock to bring the position size back in line with our risk framework.

ROK

Rockwell Automation, Inc. (ROK) helped results on improving industrial capex signals and factory automation demand tied to reshoring.

GOOGL

Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), NVIDIA Corp (NVDA), and Analog Devices, Inc. (ADI) each added to results as well, reflecting business fundamentals that in most cases continue to compound at attractive rates.

AMZN

NVDA

ADI

ACN

Accenture PLC (ACN) was the Fund's largest detractor. The weakness reflects a slowdown in discretionary consulting spending as clients redirect budgets toward internal AI implementation and rationalize legacy digital transformation programs. We view part of this pressure as cyclical, but part as what may be an emerging structural challenge that we are monitoring closely.

ICE

Intercontinental Exchange, Inc. (ICE) also weighed on results, giving back some of its strong prior gains as mortgage technology growth expectations were reset.

EOG

EOG Resources, Inc. (EOG) detracted on softer crude prices following the initial Iran-related spike.

CEG

Constellation Energy Corp (CEG) declined in an idiosyncratic pullback within an otherwise strong power theme. We view the ISRG, ABT, and CEG issues as temporary and unrelated to the long-term thesis. We added to Constellation Energy Corp (CEG) on weakness, viewing the pullback as an opportunity to increase exposure to a differentiated nuclear generation asset that we believe remains structurally advantaged in a power-hungry AI economy.

ISRG

Intuitive Surgical, Inc. (ISRG) and Abbott Laboratories (ABT) each gave back modest ground on procedure volume and device mix concerns respectively. We view the ISRG, ABT, and CEG issues as temporary and unrelated to the long-term thesis.

ABT

BRK.B

We also added to Berkshire Hathaway, Inc. (BRK.B), both as a source of defensive quality and as a form of embedded optionality on Berkshire's substantial cash position at a moment when we see limited margin of safety in the broader index.

SYK

We initiated a new position in Stryker Corp (SYK), a high-quality medical device franchise with durable growth in orthopedics, neurotechnology, and surgical instruments. Stryker's disciplined capital allocation, consistent margin expansion, and long runway in an aging demographic environment make it a natural fit for the Fund's emphasis on compounding businesses with defensible competitive positioning.

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Industry	Prev Quarter %	Current Quarter %	Change
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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Semiconductors

Cybersecurity

Managed Care

Automation

Nuclear

Value

Medical Devices

AI

Energy

Nuclear

AI

Valuations

Value

Dividends

AI

Valuations

Momentum

AI

Valuations

Momentum

AI

Technology

Quality

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

George L. Smith III Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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The Davenport Core Leaders Fund