Jacob Asset Management sees the AI productivity cycle as real and transformative, adding Snowflake for cloud data infrastructure exposure. Two biotech positions target gene therapy and CAR-T immunotherapy breakthroughs. Recent AI valuation cooling creates attractive entry points for multiyear themes. Smaller companies may benefit disproportionately from potential multiple expansion despite mixed economic signals.

Thornburg Strategic Income delivered solid Q4 returns while maintaining defensive positioning with longer duration and higher quality bias. Despite tight credit spreads and late-cycle warning signs including bankruptcies and fraud, the fund identified selective data center project finance opportunities. Fed easing and declining inflation support the outlook, with 2026 strategy favoring high-quality fixed income and flexible diversification.

Mawer's quality-focused approach underperformed in Q4's risk-on environment despite strong Canadian financials and AI beneficiaries like Alphabet and Amphenol. The firm reduced equity exposure due to valuation concerns while narrowing gold underweight. With AI bubble risks rising and policy dependency increasing, the manager emphasizes quality companies with sustainable cash flows and disciplined capital allocation as cycles mature.

Laughing Water Capital's value-oriented small cap strategy faced factor headwinds in 2025, returning 3.9% versus 17.9% for S&P 500. Manager maintains conviction in fundamental approach despite market preference for size, growth, and momentum. Key positions in biotech, defense spectrum, and waste management show strong operational progress. Expects eventual factor rotation and fundamental recognition to drive outperformance.

Pender Small Cap delivered 5.7% in 2025 despite market volatility, led by defense and energy transition plays including Kraken Robotics and grid modernization specialist Tantalus Systems. After years of small-cap underperformance, managers see improved opportunity sets in quality Canadian businesses trading at compelling valuations, maintaining disciplined focus on competitively advantaged companies.

Reeves liquidated fraud-hit Intellego but maintains conviction in core growth holdings. Nu expands super app model to Mexico, MercadoLibre outcompetes major platforms, TransMedics dominates organ transplants with operational scale. New Duolingo position capitalizes on exceptional engagement metrics after 70% decline. Strategy remains focused on exceptional entrepreneurs building high-quality, fast-growing companies for long-term compounding.

AVI Global Trust gained 0.4% in December, led by Chrysalis Investments on asset realisation news. Samsung C&T now represents over 5% of NAV, offering exposure to Samsung Electronics' improving HBM competitiveness and Samsung Biologics' 50% margin antibody manufacturing. South Korean governance reforms and capital allocation changes provide catalysts for discount closure.

Oakmark International Small Cap delivered strong 29% annual returns despite Q4 underperformance. The fund maintains concentrated European exposure while adding Japanese HR tech company Visional. Industrial machinery strength from Konecranes offset software weakness from TeamViewer. Managers see continued value opportunities internationally despite strong market performance, with potential geographic diversification ahead.

Oakmark Global Select delivered solid Q4 performance driven by healthcare holdings, particularly Bayer's positive drug trial results. The fund added Sanofi during vaccine market volatility, capitalizing on strong fundamentals and Dupixent growth potential. Despite Alibaba's near-term pressure from Quick Commerce investments, managers maintain conviction in Chinese technology positioning for long-term AI-driven value creation.

Oakmark Global delivered strong Q4 performance with 21.17% annual returns, outperforming benchmarks. Samsung led gains on semiconductor recovery while Alibaba detracted despite solid fundamentals. The team added Gartner and Mondelez at attractive valuations during market dislocations. The value-focused global strategy continues targeting quality companies with strong competitive positions trading below intrinsic value.

Oakmark Select outperformed with 8.42% quarterly returns driven by Warner Bros Discovery's bidding war and strategic value investing. The fund added Targa Resources at attractive valuations while maintaining conviction in undervalued companies across industries. Strong performance in communication services and financials offset industrial sector weakness, demonstrating successful contrarian positioning in overlooked value opportunities.

Ennismore's European small cap fund delivered 10.7% returns in 2025 through disciplined value investing despite market preference for large-cap themes. Strong conviction in quality businesses at attractive valuations, with long positions trading at 50% discount to shorts for comparable quality. Infrastructure spending catalysts and German market recovery expected to drive stronger 2026 performance.

Starvine delivered 41.6% returns in 2025 despite currency headwinds, capitalizing on spring volatility from trade tariff fears to add exposure at attractive prices. The manager emphasizes these exceptional returns are unsustainable, maintaining focus on quality companies at reasonable valuations for long-term compounding while opportunistically exploiting market dislocations.

Frontaura capped a stellar 2025 with 38% returns, driven by exceptional earnings growth, dollar weakness, and valuation recovery from historic lows. The frontier markets specialist maintains disciplined value approach with portfolio trading at 6.9x PE. Key risks include geopolitical tensions in Colombia and potential global selloffs, though historical analysis shows major declines create opportunities for subsequent outperformance.

Generation maintains conviction in quality-focused investing despite current underperformance, believing market dynamics favoring momentum over fundamentals are temporary. Portfolio companies demonstrate faster earnings growth than benchmark while trading at attractive relative valuations. Firm continues building concentrated portfolio of sustainable businesses with strong competitive positions, particularly in AI infrastructure and digital payments platforms.

SVN Capital returned -5.65% in 2025 as business fundamentals diverged from stock prices across concentrated holdings. The portfolio of 11 businesses continues to generate high returns on capital while trading at more attractive valuations. Key positions include India exposure through Bajaj Finance and Triveni Turbine, plus quality compounders like HEICO, KKR, and Copart that benefit from structural tailwinds despite temporary price weakness.

Blue Tower delivered 53% returns in 2025 through global value investing, led by fintech Enova's transformative bank acquisition and Georgian conglomerate Georgia Capital's exceptional growth. The manager sees favorable conditions ahead as extreme valuation spreads between cheap and expensive stocks create tailwinds for their value approach, while AI productivity gains accelerate economic benefits.

Devon Alpha Fund returned 2.6% in 2025 through concentrated stock selection in Australia and New Zealand markets. Copper exposure via Capstone Corporation drove December gains while profit-taking hit Infratil and Summerset. Manager maintains high conviction in current holdings for 2026 with disciplined currency hedging demonstrating focused risk management approach.

Kernow delivered 16.4% in 2025 through contrarian value investing in mispriced UK equities. Key wins include Secure Trust Bank trading at half book value and successful short of AI data centre IPO Fermi. Despite oil supply glut, maintains energy exposure through Kistos acquisition story. Banking-heavy portfolio targets asymmetric opportunities where consensus creates mispricing.

Market leadership is rotating from expensive US tech to undervalued international markets, commodities, and financials. AI spending shifted to hardware providers while gold surged 64%. Record US market concentration and high valuations signal lower future returns. QV sees opportunities in defensive sectors, European cyclicals, and small caps trading at attractive multiples, favoring active over passive strategies.

Summers Value Fund targets small-cap healthcare special situations with 12.0% annualized returns since 2018 inception versus 6.9% for Russell 2000. Concentrated portfolio focuses on undervalued companies undergoing positive change with limited institutional coverage. Strong downside protection through fundamental analysis and margin of safety approach while capturing asymmetric upside in inefficient small-cap healthcare markets.

2Point2 Capital delivered strong Q3 performance while warning against the dangerous rise of second-order pricing constructs replacing fundamental valuation discipline. The manager argues that relative valuation and greater fool theory have created elevated multiples lacking business fundamentals, creating systematic fragility when sentiment inevitably shifts from voting machine to weighing machine dynamics.

Concentrated value fund trading at 11x P/E versus S&P 500's 30x, focused on undervalued businesses with strong capital allocation. Key positions include metallurgical coal miners, TAV Airports, homebuilders, auto dealers, and offshore oil services trading at fractions of replacement cost. Recent outperformance since March 2025 after initial underperformance during Magnificent-7 rally.

Heartland Mid Cap Value underperformed in Q4 as quality value stocks lagged speculative segments, with valuation disparities reaching extreme levels. The fund maintains disciplined two-bucket approach, benefiting from J.B. Hunt's operational improvements and MarketAxess's market share recovery. Significant insider buying across portfolio companies contrasts with selling in overvalued names, creating long-term opportunities for patient value investors.

Hood River's small cap growth fund outperformed significantly in Q4 and full-year 2025, driven by strong stock selection particularly in AI-related technology investments. The portfolio has been rebalanced with more moderate exposure as valuations have risen meaningfully. Managers remain confident in their disciplined approach while acknowledging execution will be critical given elevated valuations and potential AI capex durability questions.

Rockwood Strategic capitalizes on UK small cap market dislocation through concentrated value investing. Fund targets 15% IRR returns by acquiring influential stakes in undervalued companies under £250m market cap, then actively engaging to drive operational improvements. Current environment of domestic investor exodus and depressed valuations creates exceptional opportunities for patient capital deployment.

Small-cap value is experiencing a fundamental inflection with strengthening earnings and improving market recognition. The Russell 2000 Value outperformed the S&P 500 in Q4 as investors gradually shift from mega-cap concentration. Fed rate cuts and regulatory improvements provide tailwinds for smaller businesses. Multiple takeouts validate attractive valuations, positioning the strategy for continued outperformance as the rebound unfolds.

Hood River's New Opportunities Fund significantly outperformed in Q4 2025 through superior stock selection, particularly in AI-related technology investments. The fund returned 35.76% for the full year versus 10.31% for the Russell 2500 Growth benchmark. Despite elevated valuations across small and mid-cap growth, the team maintains confidence in their disciplined approach targeting companies with clear earnings visibility and sustainable growth profiles.

Fund delivered -0.7% net return with Alphabet leading gains through AI breakthrough while Oracle and Rheinmetall detracted. AI infrastructure theme remains core driver with networking and semiconductor positions benefiting from hyperscaler buildout. Constructive 2026 outlook supported by earnings growth, rate cuts, and continued AI spending despite near-term volatility in select holdings.

Hood River's International Opportunity Fund returned 41.49% in 2025, outperforming by 12.23% as international markets led U.S. equities. New AI robotics and mining technology holdings reflect the broadening opportunity set beyond U.S. mega-caps. Improving policy conditions in China and India, combined with central bank easing globally, create compelling prospects for selective international small-cap investing in 2026.

Small-cap value fund targeting companies with strong fundamentals and management confidence demonstrated through buybacks and dividend growth. Expects 15% small-cap earnings growth in 2026 as markets broaden and falling rates benefit smaller companies. Key positions include advertising leader Lamar and industrial distributor WESCO, both positioned for strong 2026 performance despite recent underperformance.

Quality-focused fund underperformed in 2025 as markets chased AI mega caps, but manager sees AI disruption fears around software holdings as overblown. Believes incumbent software businesses with data advantages will benefit from AI adoption. Valuations improved while earnings expectations unchanged, creating better value opportunities for concentrated, long-term approach.

ClearBridge Growth Strategy achieved third consecutive quarter of outperformance through balanced portfolio construction combining AI momentum exposure with defensive growth names. Strong stock selection in technology and communication services drove results. Strategy maintains disciplined approach with opportunistic capital allocation, positioning for continued volatility while capturing long-term growth opportunities beyond momentum-driven themes.

Polen Focus Growth underperformed in Q4 as quality factors lagged in a high-beta market. The managers worry about dangerous index concentration in 10 trillion-dollar stocks and diversify beyond AI themes. They initiated robotic surgery leader Intuitive Surgical while exiting Netflix and Workday. Despite Oracle's OpenAI-related volatility, they expect continued datacenter investment and potential market broadening to favor their diversified approach.

Markets present a 'land of confusion' with economic indicators showing slowing momentum while equities hover near highs. Key concerns include rising consumer debt, labor market shifts, heavy market concentration in Magnificent Seven, and conflicting data signals. Focus remains on long-term perspective over short-term noise, emphasizing context and controllable factors for investors.

REQ Global Compounders fell 8.2% in 2025 as AI narrative pressured vertical software holdings despite differentiated risk profiles. Portfolio companies maintained acquisition discipline with 145 deals while demonstrating dual growth engine resilience. Management opportunistically added to Constellation Software, Topicus, and Lumine during drawdown. Attractive 20.8x valuation with modest market expectations supports long-term compounding thesis for quality acquisition-driven businesses.

TEAM Asset Management balances AI exposure with international diversification and precious metals insurance. Despite Q4 market resilience through government shutdown, manager questions AI capex sustainability while capitalizing on ex-US breakouts. Gold and silver delivered stellar 2025 returns as portfolio hedges. Positioning emphasizes yield curve belly, expects deregulation benefits for small caps, maintains defensive stance against mounting fiscal risks.

AI infrastructure spending mirrors Field of Dreams with massive global investment based on belief rather than proof. Despite three strong market years, analysts project continued 2026 gains driven by earnings growth and rate cuts. Key risks include inflation and AI regulation. Firm maintains disciplined, fully-invested approach with diversified exposure avoiding AI overconcentration.

Kayne Anderson Rudnick navigates a speculative market dominated by low-quality rallies in small caps and biotech. Despite challenging conditions for quality investing, they maintain disciplined focus on high-quality businesses with strong fundamentals. The firm remains optimistic about AI's transformative potential while cautioning about concentration risks and preparing for increased volatility around 2026 midterm elections.

Horizon Kinetics avoids AI-IT stocks while investing in their infrastructure beneficiaries - companies controlling water, natural gas, and land for data centers. Core holdings include exchanges, Permian Basin assets, and high-ROE businesses. The firm sees AI sector contradictions creating opportunities in resource-controlling companies with minimal index presence but critical roles in the buildout.

Kathmandu Capital posted exceptional 52% gross annual returns by positioning around U.S.-China technology competition. Core holdings include Vicor for AI power infrastructure, ACM Research for Chinese semiconductor equipment, and Huntington Ingalls for defense shipbuilding. Portfolio maintains 35% gold/cash protection. Manager evolving investment approach beyond traditional value to incorporate momentum elements while expecting continued geopolitical tensions to drive opportunities.

FMI maintained discipline during 2025's AI-driven junk rally, underperforming indices while generating solid absolute returns. The firm questions sustainability of massive AI capital spending and market concentration, seeing concerning bubble-like conditions. Despite challenging environment favoring low-quality speculation over fundamental analysis, FMI continues finding quality opportunities and expects eventual rotation back to their proven investment approach.

FMI maintains quality value discipline despite 2025's speculative junk rally favoring AI and low-quality stocks. While acknowledging underperformance versus indices, they warn of bubble-like conditions with record valuations and question AI capital spending sustainability. The firm continues finding opportunities in quality businesses like Hayward, Accenture, and Smiths, confident their proven approach will ultimately prevail as market conditions normalize.

Thornburg Global Opportunities delivered exceptional 2025 performance with 41% returns, significantly outpacing global markets through concentrated exposure to semiconductors, financials, and digital economy leaders. Despite trade policy uncertainty and geopolitical risks, the fund maintains conviction in value-priced growth companies with strong competitive positions, emphasizing long-term wealth creation over short-term volatility.

Thornburg International Equity Fund outperformed for the full year despite Q4 underperformance, benefiting from strong stock selection in technology and pharmaceuticals. The managers maintain conviction in their focused portfolio of quality international businesses trading at attractive valuations, welcoming macro-driven volatility for positioning opportunities while navigating trade tensions and divergent monetary policies.

FMI maintains quality-focused discipline amid AI-driven speculation and junk rally. Firm questions sustainability of hyperscaler capital spending despite AI stocks driving 78% of S&P 500 returns. Quality businesses trading at discounts create attractive long-term opportunities. Portfolio emphasizes strong balance sheets, competitive advantages, and reasonable valuations while avoiding speculative excess.

FMI maintains discipline amid AI speculation and junk rally, focusing on quality businesses with competitive advantages despite recent underperformance. Firm warns of bubble conditions with record valuations and massive unproductive AI capex spending. Highlights opportunities in Hayward pool equipment, Accenture IT consulting, and Smiths industrial transformation while staying patient for quality's inevitable outperformance.

2025 delivered 17.88% returns despite tariff and AI volatility, with performance broadening beyond technology. Dollar weakness drove international outperformance while gold and silver hit record highs on debasement fears. Fed cut rates three times. Multi-year winning streaks are historically normal, and supportive conditions including fiscal liquidity and AI productivity potential suggest continued market strength into 2026.