Bonsai underperformed in 2H 2025 but maintains conviction in hidden moats built from capability stacks. Wise, a top holding, exemplifies this thesis with vertically integrated infrastructure, customer-aligned pricing, and automation creating a difficult-to-replicate advantage. Stablecoins pose a potential risk to one layer but aren't clearly superior to Wise's existing rails. The fund sees mispricing opportunity in diffuse, hard-to-explain competitive advantages.

The Gabelli Equity Income Fund returned 6.76% in Q2 2026, lagging its benchmark as persistent inflation and a hawkish Fed shift weighed on markets. Strong performance from financials like Bank of New York Mellon, driven by AI-enabled efficiency gains, offset weakness in energy holdings including Chevron. The manager maintains focus on value opportunities trading below Private Market Value that can thrive regardless of interest rate movements.

Brookfield raised $98 billion and deployed $100 billion in H1 2026, capitalizing on secular megatrends through large-scale investments in nuclear power, data center infrastructure, and renewable energy. The firm completed its Oaktree acquisition, creating a comprehensive credit platform, and simplified its capital structure. With Westinghouse benefiting from a $17.5 billion government commitment and policy changes opening retirement markets to private assets, Brookfield is positioned for exceptional growth.

Arnott Capital returned flat in H1 2026 despite strong gains from AI memory and Korean reform offset by UK homebuilder losses and hedge costs. March commodity shock exposed concentrated oil and rate exposures across seemingly diversified positions. The manager has repositioned toward underappreciated AI beneficiaries, Korean governance plays and physical infrastructure benefiting from a decade of capital underinvestment colliding with AI, energy security and defense demand.

The Gabelli ABC Fund gained 2.08% in Q2 2026 as global M&A hit record levels with $2.85 trillion in first-half deal value, up 50% year-over-year. Mega-deals totaled $1.3 trillion, more than doubling 2025 levels. Cash deals dominated at 63% of transactions. The Fund capitalized on event-driven opportunities including completed deals like Janus Henderson and a robust pipeline of pending transactions across biotech, homebuilding, and media sectors.

Moerus returned 5.37% in H1 2026, lagging AI-driven benchmarks but outperforming over longer periods. Energy holdings led gains from Iran conflict while precious metals declined. Manager actively avoids overvalued tech, instead finding opportunities in UK homebuilding, ag equipment, and Indian financials at significant discounts. Extreme market bifurcation between hot AI stocks and unloved sectors creates fertile hunting ground for deep value approach.

Q2 2026 proved that crises do not necessarily mean sell signals. Despite the Strait of Hormuz closure creating a major oil shock, markets delivered positive returns driven by containable energy disruptions and robust US earnings growth of 11.5%. AI is transforming the economy faster than electricity did, with Anthropic and Nvidia showing explosive growth. Expect strong profits, ongoing geopolitical tensions, and elevated volatility ahead.

The Fund declined 2.15% as gold miners detracted, but AI infrastructure holdings surged with semiconductor equipment companies up over 100%. Japanese positions led performance on corporate reform and earnings strength. New positions added in discounted gold producers and Japanese tech companies. Markets rallied on Middle East de-escalation and strong earnings. Outlook remains constructive on broadening market participation and productivity gains from AI adoption.

Greenhaven Road is repositioning toward lower concentration and near-term catalysts while maintaining differentiated research focus. Top holdings face 12-month validation events: Burford protein settlements approaching trial, Hagerty State Farm acceleration beating consensus, Cellebrite Genesis shifting AI narrative, and special situations at Compass, Lifecore, and AnaptysBio nearing resolution. The portfolio backs advantaged businesses where non-consensus views will be tested quickly, not requiring multi-year patience.

The Fund returned 12.88% in Q2 2026, driven by Anterix's 169.6% surge on FCC spectrum approvals and SoftBank's 64.2% gain on Arm's AI momentum. T-Mobile declined on Starlink competitive fears. The portfolio combines satellite broadband infrastructure, AI platforms, and sports media assets with sustainable cash flows. Despite Fed hawkishness pressuring rates, elevated yields and pricing power support the forward income proposition.

The Gabelli Dividend Growth Fund returned 5.35% in Q2 2026, underperforming the Russell 1000 Value Index due to limited semiconductor exposure. The Fund missed massive gains in Micron and SanDisk but benefited from holdings in Hewlett Packard Enterprise, Alphabet, and Citigroup. The manager added Microsoft and Genuine Parts while maintaining focus on high-quality companies with sustainable cash flows and pricing power.

Baron Partners Fund returned 16.61% in Q2 2026, outpacing its benchmark on the strength of SpaceX, which surged 62% after its record IPO and major AI deals. Several software and information services holdings declined on AI disruption fears despite strong fundamentals, creating what managers view as attractive valuations. The Fund's concentrated portfolio with 74% in top 10 positions delivered exceptional long-term results of 18% annualized since 2003.

Baron Fifth Avenue Growth Fund delivered 24.6% in Q2 2026, driven by SpaceX's transformative IPO and AI hosting deals, semiconductor strength from NVIDIA and TSMC, and accelerating AI adoption across CrowdStrike, Datadog, and Snowflake. The manager views SpaceX as the ultimate N=1 opportunity at the intersection of AI and space economy. Portfolio fundamentals drove returns with valuations remaining 10.5% below five-year averages, supporting continued long-term conviction.

Pershing Square delivered -12.6% in H1 2026 as market gains concentrated in AI infrastructure sectors, but used the dislocation to acquire six new high-quality businesses at attractive valuations. The portfolio is positioned with companies expected to grow earnings 15-20%+ annually while trading at discounted multiples. The manager transformed Howard Hughes into an insurance-focused holding company and expects temporary valuation dislocations to reverse as fundamentals drive stock prices back to intrinsic values.

Emeth Value Capital underperformed in H1 2026 but has built AI-native workflows that dramatically improve process efficiency. The manager initiated Shift4 Payments, a vertically integrated payments company trading at 7x EBITDA with $1 trillion in cross-sell opportunity. Shift4 has compounded EBITDA at 50% annually since IPO with minimal dilution. Base case valuation implies 162% upside. The company is well-positioned against AI disruption.

Pelican Bay's concentrated value portfolio underperformed in Q2 2026 as AI euphoria drove the benchmark 13.8% higher while the portfolio gained just 2.1%. The manager maintains conviction in high-quality holdings trading at steep discounts to intrinsic value with superior metrics versus the index. New energy positions were added on the thesis that supply shocks and surging data center electricity demand create material mispricing opportunities.

Stewart Asset Management gained 15.97% net in Q2 2026, driven by exceptional S&P 500 earnings growth projected at 23% for the full year. The portfolio maintains concentrated exposure to AI infrastructure through hyperscalers and chip designers, adding Lumentum to capture optical networking demand. Despite valuation concerns and inevitable volatility, the manager believes continued earnings growth will drive further gains in the second half of 2026.

Roubaix delivered 30.1% net returns in Q2 2026, driven by concentrated long positions in robotics, edge AI semiconductors, and defense supply chains. The manager is positioned for the reinvigoration of U.S. industrial capacity and accelerating defense spending, with the defense budget rising 42% in 2027. Short positions target consumer electronics facing DRAM cost inflation and companies threatened by AI disruption. Earnings growth of 23-25% is forecasted for 2026.

Yacktman delivered 7.64% in Q2 2026, underperforming benchmarks but maintaining disciplined value approach. Samsung Electronics drove performance trading at three to four times cash flow versus competitors, enabling AI infrastructure participation with downside protection. Energy holdings hedged geopolitical risks from Iran conflict. Added Broadridge and Intuit opportunistically as software sector repriced on AI concerns. Portfolio positioned to protect capital while capturing bargains in elevated market.

Yacktman generates risk-adjusted returns by owning quality companies at attractive valuations. Samsung Electronics at 3-4x cash flow provides AI infrastructure exposure with downside protection. Energy holdings hedge geopolitical risk. South Korean positions benefit from governance reforms. The fund added software positions after AI-driven selloffs created bargains. Portfolio positioned to protect capital while capturing opportunities as markets reach all-time highs with concentrated risks.

FPA Queens Road Small Cap Value Fund delivered 27% YTD returns through Q2 2026, outperforming its benchmark by 400 basis points. Technology holdings drove performance with component manufacturers and distributors up 100%+ on cyclical recovery and data center exposure. Managers aggressively trimmed winners as valuations expanded, redeploying capital into utilities, financials, and industrials. Portfolio remains concentrated in high-quality compounders trading at reasonable valuations with strong cash generation.

The fund underperformed its benchmark in Q2 2026, returning 18.79% versus 24.05% for the MSCI Emerging Markets Index. An underweight allocation to the surging technology sector drove the shortfall despite the fund's heavy concentration in Asian semiconductor leaders Taiwan Semiconductor and Samsung Electronics. The manager remains optimistic on emerging markets, believing they trade at attractive discounts to developed markets and offer compelling long-term value.

Baron Asset Fund outperformed by 443 basis points in Q2 2026 despite headwinds from narrow AI-driven market leadership, powered by SpaceX's historic IPO and 3,000%+ appreciation. Software and services holdings trade at 47% discounts to historical multiples after indiscriminate AI disruption fears drove 46% multiple compression despite 27% fundamental growth. The manager expects re-rating as these high-quality businesses demonstrate AI enhances rather than disrupts their competitive positions.

Stenham delivered strong Q2 returns across all hedge fund strategies, driven by AI infrastructure buildout and robust M&A activity. Semiconductors surged 88% before July's 24% selloff raised monetization concerns. Credit markets show extreme dispersion with CCC spreads at 98th percentile, flagging default risk among levered AI names. Quantitative strategies benefited from high dispersion while compressed volatility created asymmetric hedge opportunities. AuM grew 25% year-over-year.

Kernow returned 8.3% in July, extending YTD gains to 27.7% through concentrated bets on exceptional UK management teams trading at low expectations. CMC Markets surged 46% as its fintech transformation accelerated. Clarkson demonstrates the strategy of owning information networks that compound through cycles. The portfolio's 184% collective upside reflects the market's failure to price what exceptional people can create rather than what currently exists.

Sohra Peak delivered +14.9% net in H1 2026, driven by D-BOX Technologies and Auto Partner, both validating the manager's high-conviction value theses. The concentrated portfolio of 11 small-cap holdings, 92% non-US, reflects a disciplined approach to finding undervalued companies with limited analyst coverage. The manager is now actively pursuing South Korean small-caps, viewing them as exceptionally cheap with corporate governance reform catalysts ahead.

The fund underperformed in Q2 2026 despite strong fundamentals across core holdings. AI adoption is accelerating growth at Arm, Alphabet, and Amazon, with cloud businesses showing particular strength. The manager used price weakness to add to seven high-conviction positions while trimming winners and exiting three names. With the portfolio trading at 51% discount to intrinsic value, the manager sees compelling long-term opportunities in quality growth companies benefiting from secular tailwinds.

Mott Capital underperformed in Q2 2026 as AI and semiconductor exuberance drove markets, but underlying portfolio businesses show strong fundamentals with cloud growth exceeding 35-40%. The manager added high-quality SaaS names like Intuit and ServiceNow while reducing cash to 10-15%, deploying into forgotten quality stocks. Despite near-term headwinds, conviction remains in patient capital being rewarded as markets eventually rotate from AI concentration.

The fund delivered 31.4% in Q2 2026, doubling the S&P 500's return through concentrated positions in AI infrastructure suppliers like Micron, AMD, and semiconductor equipment makers. The managers added to Amazon while trimming Meta and Apple, viewing the e-commerce giant as better positioned in AI. Despite geopolitical risks, resilient US economic data and continued AI investment support a constructive outlook for quality growth companies.

Oldfield Partners delivered strong returns from semiconductor holdings purchased at depressed valuations that have since doubled or tripled. The manager warns extensively about bubble dynamics and market excess, particularly around AI enthusiasm and the SpaceX listing, using balloon metaphors to signal caution. Despite these concerns, the firm sees abundant value opportunities with portfolios trading at eleven times earnings and significant upside potential. Value investing is back.

PGIM Core Bond outperformed in Q2 2026 through quality-focused positioning as geopolitical shocks drove yields higher and the Fed turned hawkish under new leadership. The fund capitalized on attractive carry in senior securitized credits and belly Treasuries while avoiding spread compression bets. AI-driven growth supports the U.S. economy but persistent inflation from energy shocks necessitates Fed tightening, creating a challenging backdrop for risk assets at historically tight spreads.

City Different's Multi-Cap Core strategy outperformed in Q2 2026, up 16.94% versus the S&P 500's 15.20%, driven by Flex and an overweight to Value holdings. The five-year anniversary reinforced the lesson that highest-conviction ideas add the most value. Going forward, the manager will focus more deeply on absolute favorite investments while maintaining portfolio balance across baskets, sectors, and market caps.

Orbis navigated an exceptionally narrow AI-driven market by trimming exuberant AI exposure while adding mispriced opportunities with narrower outcome distributions. Credit spreads signal extreme risk appetite comparable to historical bubbles. The manager is rotating toward discount retail like BBB Foods and finding value in healthcare and consumer staples, prioritizing absolute risk management over benchmark tracking despite potential near-term underperformance in this concentrated market environment.

Baron Focused Growth gained 13.26% in Q2 2026, lagging the benchmark due to AI-driven valuation compression in software holdings despite unchanged fundamentals. SpaceX's record $85 billion IPO drove 987 bps of returns. Consumer investments rebounded strongly as macro fears eased. Portfolio companies accelerated buybacks at depressed valuations while maintaining strong balance sheets and recurring revenue growth. The concentrated 28-stock portfolio trades at historically low valuations with multiple paths to value realization as rates decline.

Harbor Mid Cap Value outperformed in Q2 2026 through disciplined stock selection despite value lagging growth. AI infrastructure holdings TD Synnex, Arrow Electronics, and Hewlett Packard Enterprise surged 50-90% on semiconductor and data center demand. The Fund trades at 10.6x forward earnings versus 16x for the benchmark, maintaining overweights to Financials and Consumer Discretionary while adhering to its quantitative value discipline.

PGIM Global Total Return outperformed in Q2 2026 despite Middle East conflict volatility. The fund positions for U.S. overheating with 2.3% GDP growth driven by AI capex and fiscal stimulus, but expects Fed hikes under Warsh as inflation stays elevated from energy shocks and tariffs. Credit spreads are historically tight, prompting a quality-focused, carry-oriented stance with 7.2-year duration and overweights to emerging markets and financials.

The Fund delivered 26.9% returns in Q2 2026 by capitalizing on accelerating AI infrastructure buildout and earnings beats across technology and industrials. Hyperscaler capex guidance surged from $100 billion to $700 billion, driving semiconductor equipment, memory, and power infrastructure holdings. The team increased industrials exposure to all-time highs while refining technology positioning beyond advanced semiconductors to memory, networking, and AI-enabled industrial applications.

Curreen Capital delivered 22.26% in Q2 through three special situations: a profitable tender offer in Optimum Communications, a merger-spinoff in Green Dot later exited due to timing uncertainty, and adding to TriNet as an inexpensive turnaround. The concentrated portfolio emphasizes spinoffs and turnarounds trading at attractive upside-to-downside ratios with strong downside protection.

Q2 2026 marked an AI-driven mania rivaling the dotcom bubble. Semiconductors surged 88% to become 20% of the S&P 500 on record leverage—margin debt at $1.5 trillion, hedge fund exposure at 98th percentile. The Buffett Indicator hit 235%, dividend yields reached all-time lows. The fund is short AI winners and long AI losers, positioned for sharp reversal when hyperscaler capex cuts trigger momentum unwind.

Robotti sees AI's physical appetite creating opportunity in overlooked infrastructure. While AI platforms trade at extreme valuations, the power, materials, and energy required to support them remain undervalued after years of underinvestment. The manager owns real assets through public companies at discounts: offshore energy consolidating with pricing power, North American industrials benefiting from cheap gas, and building products serving demographic housing demand. Recognition lags fundamentals but arrives quickly.

Immersion Investment Partners returned 39.1% in Q2 2026 as the market reversed its irrational Q1 selloff of non-AI holdings. The concentrated micro- and small-cap fund added capital near Q1 lows in companies like Red Violet and Mama's Creations, where temporary factors created gaps between price and value. New position Strata Critical Medical offers compelling growth in organ transplant logistics with significant consolidation opportunities ahead.

The Fund underperformed in Q2 2026 as AI infrastructure stocks rallied sharply while the portfolio's quality-focused positioning lagged. Samsung and Qualcomm contributed on memory cycle strength, while Munich Re and Martin Marietta detracted on cyclical concerns. The manager exited Danaher and Dolby after thesis realization, redeploying into Techtronic Industries and Wal-Mart de México. The team remains focused on high-quality businesses at attractive valuations with identifiable catalysts rather than macro positioning.

Columbia Strategic Income outperformed in Q2 2026 as shorter duration positioning benefited from rising yields amid persistent inflation. The team sees limited value in investment-grade corporates at tight spreads but finds compelling opportunities in AAA/AA non-agency mortgage-backed securities offering superior yields. With uncertainty elevated around Fed policy and inflation durability, the portfolio maintains high-quality structured credit exposure with flexibility to deploy capital when valuations improve.

Aristotle Core Equity returned 14.69% in Q2 2026, slightly trailing the S&P 500 on allocation effects. AI infrastructure drove market leadership, with the Fund adding semiconductor exposure through AMD and Micron positions. The manager sees memory entering a four- to five-year super-cycle driven by AI demand and HBM constraints. Valuations appear reasonable given earnings growth, with focus on secular growth companies despite geopolitical and inflation headwinds.

The Aristotle International Equity Fund underperformed benchmarks in Q2 2026 despite strong contributions from Samsung Electronics and Techtronic Industries, driven by AI infrastructure demand and power tool ecosystem expansion. The fund rotated from Unilever into Magnum Ice Cream, seeking better value creation under dedicated management. Geopolitical tensions and inflation pressures persist, but the manager maintains focus on high-quality businesses with strong competitive positions and identifiable catalysts rather than macro positioning.

Bailard's International Equity Strategy returned 13.52% net in Q2 2026, outperforming EAFE by 270 bps through country allocation favoring Korea and Taiwan. AI-driven semiconductor demand propelled Information Technology 55.1% as hyperscalers raised capex guidance to $700 billion. Middle East de-escalation sent oil prices lower, pressuring energy-sensitive markets. July saw renewed geopolitical tensions and valuation pressure on AI beneficiaries, reinforcing the value of disciplined, all-weather positioning.

The fund underperformed the Russell 2000's exceptional 21.49% Q2 return, missing the quarter's momentum-driven rally in AI, quantum computing and non-earning growth stocks. Top holdings MACOM and Mercury Systems delivered strong results driven by data center and defense demand. The manager remains constructive long-term on small caps given multi-decade low valuations, reaccelerating earnings and structural tailwinds, while acknowledging near-term geopolitical and election-related volatility risks.

Aristotle Value underperformed in Q2 2026 due to deliberate underexposure to AI infrastructure semiconductors, which the manager views as transient scarcity earnings destined to normalize. They are upgrading the portfolio toward Durable Quality franchises with permanent competitive advantages at attractive valuations, selling Atmos and Danaher to buy Autodesk and Edwards Lifesciences. The manager expects capital concentration in speculative themes to eventually reverse as fundamentals reconnect with prices.