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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"AI infrastructure boom drives strong Q3 returns led by Oracle's transformational cloud growth and Broadcom's XPU market share gains. Bubble risks rising with many AI stocks up 40-100%, prompting selective trimming of winners while adding quality names like BYD."
The Growth Equity Strategy returned 4.3% net in Q3 2025, driven primarily by AI-related holdings including Alphabet, Oracle, ASML, and Broadcom. The AI arms race among technology companies continues with massive infrastructure investments, though bubble risks are rising as many AI stocks gained 40-100% in the quarter. Oracle delivered exceptional results with unprecedented cloud infrastructure growth guidance, potentially making Oracle Cloud equal to Google Cloud by FY29-30, supported by multi-billion dollar contracts including a suspected $30B annual OpenAI deal. Microsoft's Azure accelerated to 39% growth as businesses rush to adopt AI services. ASML's High NA EUV technology positions the company well for next-generation chip production with strong competitive moats. The manager trimmed positions in Microsoft, Zscaler, and Oracle for risk management after strong gains, while increasing Broadcom and adding new positions in Medtronic and BYD. The strategy focuses on identifying quality innovators with defendable moats while managing bubble risks through selective positioning and fundamental research.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by concentrated portfolio with top 10 holdings representing 51.79% of assets, detailed company visits to ASML and BYD, specific position sizing decisions, and clear thesis articulation for major holdings like Oracle and Broadcom.
Growth Outlook
The manager acknowledges continued market rallies and all-time highs, but expresses growing concerns about AI bubble formation and rising risks. The outlook is cautiously optimistic with significant risk awareness.
Risk Appetite
Portfolio positioning shows mild risk reduction through trimming of large winners (Microsoft, Oracle, Zscaler) for risk management purposes, while selectively adding new positions. Net positioning is cautious but still constructive.
Capital Deployment
Net capital reduction through trimming of Microsoft, Zscaler, Advantest, and Oracle for risk management, while adding only two new positions (Medtronic, BYD) and eliminating Entegris and Datadog. Overall activity suggests modest de-risking.
Forward Guidance
Manager emphasizes the need to balance opportunities with rising risks and avoid 'betting the ranch.' The focus is on defensive positioning through fundamental research rather than aggressive deployment.
Language Signal
Language is balanced between opportunity recognition (AI revolution, long-term growth) and risk warnings (bubble formation, euphoria, breathtaking valuations). Bullish and bearish language roughly offset each other.
Perceived Risk
Manager explicitly identifies multiple systemic risks including AI bubble formation, breathtaking startup valuations, potential investment return shortfalls, and AI disruption fears. Risks are discussed extensively throughout the letter with specific examples and concerns.
Opportunity Density
Manager sees selective opportunities in AI infrastructure and quality companies with competitive moats, but emphasizes the need for careful selection rather than broad deployment. Opportunities exist but require significant selectivity.
Time Horizon
Focus on long-term AI opportunity growth and sustainable competitive advantages, with specific mention of ASML's roadmap until 2040 and Oracle's multi-year transformation. Manager takes a patient approach to fundamental research and moat identification.
