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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Hotchkis & Wiley Global Value Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Hotchkis & Wiley Global Value Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

Hotchkis & Wiley Global Value Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Hotchkis & Wiley Global Value Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+5.96%

YTD+5.96%

Annualized+9.58%

Positioning StanceConstructive

Market CapLarge Cap

GeographyGlobal, Europe, US

Digest Analysis

Quick Take

"Hotchkis & Wiley Global Value Fund capitalized on value's dramatic Q1 2025 outperformance. European strength and healthcare/industrials stock selection drove results."

Executive Summary

The Hotchkis & Wiley Global Value Fund delivered strong outperformance in Q1 2025, returning 5.96% versus 4.81% for the MSCI World Value Index. The quarter marked a significant inflection point for value investing, with value outperforming growth by nearly 13 percentage points - the largest advantage since the early 2000s. European equities exhibited exceptional strength, with the MSCI Europe Index gaining 10.5% versus -4.3% for the S&P 500, representing the largest quarterly outperformance since 2000. Stock selection in industrials and healthcare drove positive attribution, while the fund benefited from avoiding the Magnificent Seven mega-cap growth stocks that declined 14% collectively. The portfolio maintains a compelling valuation advantage, trading at 9x price to normal earnings versus 15x for the value index and 27x for growth. Key contributors included CVS Health on improved profitability guidance and European holdings like Babcock International and Siemens. The managers express confidence in the portfolio's prospects given attractive valuations, quality businesses, and healthy balance sheets.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

75%

CautiousHigh

High Conviction (75%)

High conviction evident in specific stock selections with detailed fundamental analysis, clear positioning in value versus growth, and confident statements about portfolio prospects. Managers provide specific reasoning for holdings and express strong belief in their investment approach.

Growth Outlook

65%

BearishBullish

Bullish (65%)

The managers express optimism about value investing prospects, highlighting the promising outlook due to wide valuation spreads and noting confidence in the portfolio's prospects. They view the current environment as favorable for their value approach with attractive opportunities.

Risk Appetite

45%

DefensiveAggressive

Balanced (45%)

The fund has increased exposure to defensive sectors by 7 percentage points over the past year, showing some risk-off positioning. However, they maintain conviction in individual holdings and express confidence in the portfolio, suggesting moderate risk appetite rather than aggressive positioning.

Capital Deployment

30%

De-riskingDeploying

De-risking (30%)

The fund has increased defensive sector exposure by 7 percentage points over the past year, suggesting some capital reallocation. However, no explicit discussion of cash levels or aggressive deployment, indicating moderate and selective capital deployment activity.

Forward Guidance

70%

CautiousExpansionary

Expansionary (70%)

Managers explicitly state confidence about the portfolio's prospects and highlight the promising outlook for value investing. They express positive views on specific holdings and believe in continued outperformance potential, indicating bullish forward guidance.

Language Signal

60%

BearishBullish

Balanced (60%)

Language includes positive terms like 'promising outlook', 'confident about prospects', 'attractive valuation', and 'compelling opportunity'. While balanced with risk acknowledgment, the net directional language leans optimistic about value investing and portfolio positioning.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Managers acknowledge tariff uncertainty and concentration risk in mega-cap growth stocks, but overall risk discussion is moderate. They express confidence in portfolio positioning and don't emphasize systemic risks, suggesting moderate perceived risk levels.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

Strong opportunity density indicated by wide valuation spreads between growth and value, attractive individual stock valuations, and confidence in finding quality businesses at reasonable prices. The 9x portfolio multiple versus market suggests abundant opportunities in their investment universe.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Focus on fundamental business quality, sustainable profitability paths, and long-term competitive advantages suggests patient capital approach. Discussion of structural themes like defense spending and value investing cycles indicates medium to long-term investment horizon.