Markets delivered strong 2025 returns driven by AI-led technology earnings and international outperformance, but elevated valuations at 23x forward earnings mean future returns depend on earnings durability rather than multiple expansion. Sustained capital investment in AI, infrastructure, and energy supports growth, though selectivity and focus on strong fundamentals become increasingly important in this environment.

Osterweis Opportunity Fund outperformed in Q4 despite lagging for the year, as thematic investing dominated over fundamentals. Strong semiconductor and fintech holdings drove performance while avoiding speculative AI and biotech names. Manager expects return to fundamentals-driven markets and sees opportunities across AI, robotics, and healthcare diagnostics secular trends.

Diamond Hill's Mid Cap Strategy outperformed in Q4 with strong industrials and materials selection, led by AI beneficiaries Ciena and WESCO's data center growth. Portfolio positioning turned more defensive amid elevated valuations, favoring lower-debt, less cyclical names. Healthcare and industrials remain key opportunity areas while managers maintain caution about market uncertainty and AI valuation concerns.

Voya's quantitative small cap strategy underperformed in 4Q25 due to poor stock selection in tech and financials, despite strong performance from industrial and healthcare picks. The managers remain optimistic about broadening market leadership beyond mega-caps, driven by AI innovation and corporate investment, while maintaining caution around geopolitical risks and policy uncertainty heading into 2026.

WestEnd rotated from mega-cap Technology concentration toward a more balanced portfolio spanning AI infrastructure, industrial modernization, defense spending, and healthcare. While maintaining AI exposure through data center and infrastructure plays, the firm added positions in natural gas compression, GLP-1 therapeutics, and strategic metals. The constructive 2026 outlook reflects healthy fundamentals and supportive policy backdrop.

Diamond Hill Large Cap Fund underperformed in Q4 due to limited AI exposure, returning 1.41% versus 3.81% for the Russell 1000 Value Index. Managers remain cautious of AI exuberance, preferring high-quality, cash-generative defensive businesses like Colgate, Aon, and Berkshire Hathaway. New positions initiated in undervalued quality names while selling holdings that reached fair value.

Diamond Hill Small Cap outperformed in Q4 with a 4.88% net return versus 2.19% for Russell 2000, driven by strong industrials and consumer discretionary selection. The strategy focuses on resilient businesses in neglected areas like industrial infrastructure, defense modernization, and critical materials. New real estate positions reflect expanding opportunity set amid continued market volatility.

Diamond Hill's International Strategy delivered 28.41% net returns in 2025 despite Q4 underperformance. Strong semiconductor exposure benefited from AI demand, while European banks and defense companies performed well. The managers continue their disciplined value approach, adding positions in SK hynix, ICON, NatWest, and Theon International while focusing on companies where prices diverge from intrinsic value.

Polen International Growth underperformed significantly in 2025 as markets favored cyclical businesses over quality growth companies. Despite flat returns versus strong foreign market performance, underlying business fundamentals remain solid. The portfolio added Nintendo ahead of Switch 2 launch and maintains focus on durable competitive advantages. Management sees attractive opportunities outside the US and expects quality companies to ultimately outperform.

Gate City delivered 15.4% returns in 2025 through concentrated small-cap value investing focused on real assets. The fund benefits from dollar debasement concerns driving precious metals higher and rotation toward productive assets. Portfolio trades at attractive 6.8x EV/EBITDA with strong balance sheets. Key themes include coal demand from data centers, trucking recovery, and media consolidation opportunities.

Peapack Private sees 2026 starting positively with accommodative policy, AI investment boom, and earnings growth supporting markets. Key risks include labor market weakness, bubble-level valuations, AI over-investment with poor returns, and geopolitical uncertainty. Recommends maintaining equity exposure while favoring small caps and international markets over expensive US large caps, extending bond duration.

Manager runs barbell strategy long unfavored oil and fitness stocks while short AI bubble names trading at 65x revenue. OPEC+ price war creating oil oversupply concerns but builds smaller than expected with shale growth killed. Expects consolidation in energy sector and Peloton's wellness platform transition to drive returns as AI valuations eventually correct.

Harris Associates delivered strong Q4 performance at 8.36% net, outperforming benchmarks through concentrated value investing. Major contributors included Warner Bros Discovery on acquisition activity and Alphabet on AI-driven Cloud growth. The firm initiated Targa Resources for its midstream energy advantages while maintaining focus on bottom-up fundamental analysis to identify undervalued quality businesses.

Brown Advisory's Large-Cap Growth strategy underperformed in 2025 due to extreme market concentration in AI mega-caps. Despite protecting capital during early-year volatility, narrow leadership from April onward created headwinds for the diversified approach. The manager maintains conviction in owning best-in-class growth companies across business models rather than chasing concentrated AI exposure, positioning for eventual market breadth recovery.

MCP Emerging Markets Fund outperformed in Q4 despite a challenging 2025 for quality mid-cap stocks. Style headwinds drove underperformance as markets favored large, liquid names over the fund's high-quality, under-researched holdings. Strong portfolio fundamentals with 26% expected EPS growth and significant EM valuation discounts position the strategy for potential catch-up as conditions normalize.

NZS delivered strong full-year returns despite Q4 underperformance, driven by semiconductor and AI-related holdings. The firm sees opportunity in software companies feared to be displaced by AI, believing systems of record will adapt through integration. Portfolio rebalanced away from IT as valuations recovered, adding quality growth names trading at attractive multiples.

Harris Associates International Strategy returned 4.93% net in Q4 2025, driven by pharmaceuticals, semiconductors, and logistics. The manager initiated five new positions including AstraZeneca and specialty chemicals companies, capitalizing on attractive valuations. They believe the decade-long U.S. growth stock outperformance paradigm unraveled in 2025, with European equities fundamentals improving and valuation spreads narrowing in their favor.

Cambiar SMID Fund struggled in 2025's speculative environment that favored momentum over quality, but fourth quarter showed encouraging signs as value sectors outperformed growth. With Financials as the largest allocation at 22% and Healthcare overweight, the fund is positioned for potential benefits from steepening yield curves and continued value rotation in 2026.

Davis Opportunity Fund delivered 22.02% returns in 2025, outperforming benchmarks through active management focused on healthcare recovery plays, select technology positions, and undervalued financials. Trading at 14.3x forward earnings versus 25.6x for the S&P 1500, the fund advocates reducing passive index exposure given stretched valuations and extreme concentration levels.

Davis Financial Fund delivered exceptional 29% returns in 2025, significantly outperforming benchmarks through concentrated exposure to quality financial services companies. Strong performance across banking, payments, and capital markets was driven by improving credit spreads, regulatory tailwinds, and expense discipline. Despite recent valuation expansion, the portfolio trades at attractive 13x earnings with durable competitive advantages intact.

Impax US Sustainable Economy Fund outperformed in Q4 2025 through sustainability-driven stock selection. Health Care led gains on favorable drug pricing policies while AI chip demand boosted AMD. The fund's Corporate Resilience framework successfully avoided underperformers like Meta. Managers remain cautiously optimistic for 2026 given supportive monetary policy despite fiscal concerns.

Cambiar International delivered strong absolute returns but lagged benchmark due to elevated cash and Consumer Staples weakness. Fund maintains constructive outlook on international equities given valuation asymmetry versus richly priced U.S. markets. European stimulus should provide earnings tailwinds. Sold Taiwan Semi after 400% gains, added Smurfit Westrock. Expects more selective 2026 gains with cautiously optimistic stance.

Brown Advisory's Mid-Cap Growth strategy lagged in Q4 2025 primarily due to not owning Palantir, which dominated benchmark returns at extreme valuations. The strategy added quality compounders like Axon and Zscaler during market volatility, benefiting from AI infrastructure demand and broadening market leadership. Expected small-cap earnings acceleration in 2026 should support the mid-cap opportunity set going forward.

First Eagle Global Fund outperformed in Q4 2025 through strategic gold exposure and selective technology holdings, delivering 5.35% returns. The fund builds portfolio resilience via low-beta equities with strong fundamentals while hedging fiscal and geopolitical risks through gold. Key contributors included Alphabet's AI success and Samsung's semiconductor strength, positioning for potentially challenging markets ahead.

Baron Discovery Fund's systematic growth approach delivered 10.96% returns in 2025 despite market preference for low-quality momentum stocks. The fund maintains high-conviction positions in software, healthcare, and defense companies with competitive advantages. Management expects favorable 2026 conditions from declining inflation, AI infrastructure spending, and economic growth to benefit their anti-momentum, quality-focused strategy.

Mid cap strategy underperformed in Q4 amid narrow market focus on AI themes and sentiment-driven moves. Technology and real estate detracted while gaming and travel contributed. Managers are reallocating toward underappreciated businesses with durable fundamentals as improving policy clarity and accommodative conditions create more constructive environment for active stock selection.

Brown Advisory Global Leaders delivered 15.2% returns in 2025 but lagged benchmarks due to financials and tech underperformance. The concentrated strategy focuses on quality companies with pricing power and customer solutions. Active portfolio management included strategic moves in AI and credit bureaus. Supply-side competition, especially in AI, poses key risks while broad opportunity set supports 10%+ expected returns.

Invesco's emerging market local debt fund outperformed in Q4 2025 on strong interest rate positioning and currency exposure. Broad-based rate cuts across emerging markets and a weakening dollar created favorable conditions. The managers increased exposure to Hungarian forint, Chinese yuan, and Chilean peso while extending duration. Diverging global growth and continued monetary easing support the outlook for 2026.

Midstream energy is positioned for growth from data center demand, LNG exports, and electrification driving 20-25 Bcf/d of incremental natural gas demand through 2030. Industry fundamentals are healthy with declining leverage and rising dividends. Six holdings increased distributions 7.5% year-over-year. Valuations remain attractive despite strong recent performance, with data center tailwinds accelerating cash flows from 2027.

Record market concentration and compromised index construction create opportunities for truly diversified dividend strategies. Miller/Howard avoids Magnificent 7 in income portfolios while other managers chase performance. Nuclear power emerges as compelling long-term theme with rising electricity demand and policy support for capacity expansion, though execution risks remain significant.

Miller/Howard's dividend strategy outperformed in 4Q 2025 while yielding 3.6%. The manager sees AI creating opportunities in overlooked traditional companies that could benefit from productivity gains, rather than expensive AI winners facing historical margin compression risks. Portfolio trades at 40%+ discount to S&P 500 with strong dividend growth potential from operational AI adoption.

Invesco Discovery Fund outperformed in Q4 2025 with 4.94% returns driven by AI infrastructure and semiconductor exposure. The team maintains constructive outlook on premier growth compounders, emphasizing industrials and IT sectors. Key catalysts include 2026 GDP growth expectations, record buybacks, and Fed rate cuts supporting continued technology-driven disruption opportunities.

Utilities delivered strong 2025 performance despite Q4 headwinds, benefiting from accelerating electricity demand driven by data centers and electrification. Enhanced earnings growth profiles support higher dividend yields and total returns. Portfolio actively repositioned toward premium growth companies while maintaining focus on regulated utility frameworks that provide predictable cash flows and rising income streams.

Long Cast delivered flat 2025 returns despite strong Q4, maintaining concentrated small-cap strategy that has generated 14% annualized returns since inception. New healthcare investments in CCRN and NRC reflect value approach targeting companies with strong balance sheets and operational turnaround potential. Manager remains committed to patient capital deployment in well-researched micro and small-cap opportunities.

Infrastructure portfolio delivered fifth consecutive positive year despite Q4 underperformance versus broad market. Nuclear renaissance driven by data center electricity demand and policy support creates compelling long-term opportunities. Portfolio offers 2.5x S&P 500 dividend yield with strong growth prospects. Manager selectively added to premium growth utilities while maintaining focus on established earnings profiles and sustainable cash flows.

Miller/Howard's energy fund returned 6.07% in 2025 while repositioning for long-term opportunities. Despite oil prices at inflation-adjusted century lows, the fund sees improving fundamentals with data center power demand creating new growth avenues. Active portfolio management reduced geopolitical and natural gas exposure while increasing refining positions, maintaining a 3.2% dividend yield.

1MC delivered 20.1% net returns in 2025 through concentrated investing in undervalued small-cap businesses. The fund's largest winners contributed 30% gross while successful position management limited downside from detractors. Manager significantly increased Limbach Holdings position after 55% decline, viewing the building systems company as mispriced given its successful transition to higher-margin business model.

Greystone's concentrated small-cap value strategy underperformed in 2025 but maintains strong long-term track record. The manager systematically upgraded portfolio quality, exiting weaker positions for businesses with clearer value drivers. Top holdings include coal royalties, e-commerce eyecare, fire safety services, and surgical hospitals. New position in integrated payments company Shift4 offers compelling risk-adjusted returns. Current opportunity set remains unusually attractive for patient capital.

Fairtree Wild Fig delivered 8.1% in Q4 and 9.8% for 2025 through diversified multi-strategy approach combining equity long/short, fixed income, and commodities. Strong performance driven by South African positioning, rate curve trades, and technology themes, while commodities faced supply constraints. Fund maintains diversified alpha generation across uncorrelated streams with defensive positioning for potential 2026 shocks.

Global markets rose 3.7% in Q4 2025 on AI infrastructure spending and Fed policy support. Trade tensions eased with US-China agreements reducing tariffs significantly. Commodities surged with copper up 22.6% and silver gaining 51%. Central banks diverged with Fed cutting while BOJ raised rates. Technology valuations and geopolitical risks remain key concerns.

Baron Real Estate Fund's Jeff Kolitch sees real estate at a positive inflection point with compelling risk/reward as key concerns are priced in. The fund's growth-oriented approach targets faster-growing real estate companies beyond traditional REITs, focusing on commercial services, data centers, travel, and housing themes. With supply collapsed and strong balance sheets, double-digit returns are expected ahead.

Bell's quality-focused global equity strategy underperformed in December as risk-on sentiment favored momentum over fundamentals. Despite challenging 2025 performance, the team maintains conviction in their QARP approach, citing compelling valuations across quality businesses and expecting a transition toward earnings-driven market leadership in 2026 that should favor their investment style.

EMA GARP Fund gained 174.5% in 2025 betting on precious metals amid monetary system breakdown. Fed restarted money printing while Trump Administration plans massive fiscal stimulus. Gold and silver miners trade cheap relative to underlying metals despite 70% profit margins. Physical silver shortages emerging as critical mineral. Fund believes still early in secular sound money trend.

AVI delivered +2.9% in Q4 2025 through discount arbitrage in investment trusts. Energy storage leader GRID and capital allocation champion Georgia Capital drove performance. Private equity funds offer compelling arbitrage opportunities selling underlying assets at tight discounts to fund wide-discount buybacks. Renewable investments faced regulatory headwinds but present selective opportunities at distressed valuations.

LHC Capital returned 3.1% in 2025, outperforming Australian tech despite sector headwinds from AI concerns and policy rotation. Strong contributors MA Financial and HUB24 offset weakness in Pro Medicus and REA Group. Underlying business fundamentals improved significantly while valuations compressed, creating attractive prospective returns. Managers expect quality businesses to lead recovery similar to 2022-2025 period.

Brandes Small Cap Value Fund outperformed with 5.88% quarterly returns driven by industrials holdings including Kennametal, Graham Corporation, Moog, and Hexcel. The fund sold Avadel after a bidding war reached intrinsic value and added Central Garden & Pet as an attractive value opportunity. Management maintains optimism on value stocks with differentiated positioning versus small-cap benchmarks.

Bell Global Emerging Companies Fund's quality-focused approach faced style headwinds in December, declining 1.8% versus the index's -0.8%. Industrial and technology holdings drove positive performance while consumer discretionary lagged. The team strategically repositioned the portfolio for 2026, adding industrial distributor W.W. Grainger and wealth manager LPL Financial. Compelling valuations and earnings-driven market transition expected to favor quality companies ahead.

Deep Sail Capital delivered 34.8% net returns in 2025 through disciplined long/short investing in quality small-cap growth companies. The fund benefits from key holdings like Kraken Robotics in defense technology and Sanuwave Health in medical devices, while positioning for a run it hot economic environment that favors growth over inflation control in the near term.

Brandes Core Plus Fixed Income Fund maintains defensive positioning amid historically tight credit spreads and persistent inflation concerns. Despite Fed rate cuts, the manager questions economic justification given 25% cumulative inflation since COVID and emerging private credit stress. Fund favors shorter-duration corporates with strong asset coverage, managing duration 10% below benchmark while remaining optimistic about security selection opportunities.

Downing Fox's diversified multi-strategy approach delivered solid absolute returns but lagged in 2025's mega-cap dominated market. Their small-cap focus and active management philosophy faced headwinds from two-speed markets favoring large companies. Despite relative underperformance, the manager maintains conviction in their survive-first strategy, believing current positioning offers superior long-term risk-adjusted returns when market leadership eventually rotates.