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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"City Different Investments' Multi-Cap Core strategy gained 2.75% in 4Q 2025, slightly beating the S&P 500. Portfolio adjustments included purchasing payments processor Flywire and exiting four positions to refine the portfolio down to 21 high-conviction holdings."
In the 4Q 2025 investor letter, Portfolio Manager Rob MacDonald addresses the psychological hurdles in fund management, detailing how behavioral biases, FOMO, and 'Nighttime Investor' impulses lead to suboptimal actions. The Multi-Cap Core strategy slightly outperformed the S&P 500 Index in the fourth quarter with a 2.75% return, supported by strength in 'Mature' (Value) holdings like Financials and Health Care. The strategy exited four stocks (Charter Communications, Starbucks, Schwab, Target) and initiated a new position in Flywire (FLYW), concluding the quarter with 21 active investments.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The fund maintains a moderately concentrated portfolio of 21 holdings, representing a selective but diversified approach. Conviction is supported by the decisive exit of four positions that were not tracking to plan (Charter Communications, Starbucks, Target, and Charles Schwab) and the redeployment of capital into higher-conviction ideas. However, the overall tone remains balanced and acknowledges underperformance since inception, aligning with a moderate conviction score of 0.55.
Growth Outlook
The managers express a neutral market outlook with a score of 0.50, explicitly stating that the market will go up and down over time. Instead of making directional macro predictions, they emphasize keeping their gaze on the long-term horizon and maintaining a balanced, diversified approach.
Risk Appetite
Risk appetite is scored at 0.60, indicating a balanced posture with selective equity exposure across the business life cycle. The strategy maintains a structural underweight to mega-caps and holds mid- and small-cap stocks, demonstrating a willingness to deviate from the index, though they prioritize rational risk-managed decisions.
Capital Deployment
Capital deployment is scored at 0.45, reflecting a net reduction in the number of holdings from 24 to 21 during the quarter. By selling four positions and buying only one, the fund consolidated capital into its existing higher-conviction holdings rather than expanding its footprint.
Forward Guidance
The managers display a moderate action bias with a score of 0.55, having active deployment during the quarter by purchasing one new name (Flywire) and selling four others (CHTR, SBUX, SCHW, TGT). This activity reflects a selective optimization of positions rather than aggressive capital deployment.
Language Signal
The language signal is scored at 0.55, as the text contains a balanced mix of positive and negative descriptors. While the managers are 'encouraged' by three-year trailing results and see 'strong long-term potential,' they also candidly discuss 'disappointing' since-inception returns and the 'weak' performance of their emerging basket.
Perceived Risk
Perceived risk is scored at 0.55, highlighting a moderate level of risk awareness. The managers focus heavily on internal behavioral risks (such as regret avoidance and emotional decision-making) alongside market structure risks like extreme index concentration in mega-cap stocks.
Opportunity Density
Opportunity density is scored at 0.50, reflecting a stable or selective pipeline of ideas. The managers added only one new position (Flywire) during the quarter while exiting four, indicating that they are highly selective and not finding an overwhelming abundance of cheap ideas in the current environment.
Time Horizon
The managers demonstrate a clear long-term orientation, earning a score of 0.85. They emphasize that their 'investing gaze remains on the long-term horizon' and structure their decision-making process ('Morning Investor' mode) to mitigate short-term emotional impulses.
