Institutional Base Case

Mar Vista's U.S. Quality Premier strategy returned 10.15% net in Q2 2026, underperforming the Russell 1000 Index (15.14%) and S&P 500 Index (15.20%). U.S. equities advanced despite an increasingly complex macroeconomic backdrop, with economic growth remaining resilient and market leadership gradually broadening beyond technology. Artificial intelligence remained the dominant theme, but investor focus shifted from infrastructure spending toward identifying businesses capable of converting AI investments into durable earnings growth. Top contributors included GE Aerospace, which benefited from a multi-year aftermarket upcycle in commercial aerospace, Alphabet, which demonstrated strong execution across Search and Cloud, and Taiwan Semiconductor, which raised guidance on robust demand for leading-edge chips. Netflix, Intuit, and QXO detracted. The manager initiated ASML Holding, exited Intuit due to AI disruption concerns, and rebalanced the portfolio by adding to Broadcom and GE Vernova while trimming several positions. Looking ahead, the manager expects earnings growth, capital allocation discipline, and business execution to become the primary drivers of returns, with AI entering a more productive phase favoring companies demonstrating measurable commercial adoption and expanding profitability.