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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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NZS Capital - Growth 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (NZS Capital - Growth)

Primary Source Intelligence • Q3 2026 Letter Analysis

NZS Capital - Growth Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, NZS Capital - Growth. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-0.75%

YTD+12.78%

Annualized+16.68%

Positioning StanceCONSTRUCTIVE

GeographyGlobal

Digest Analysis

Quick Take

"Constructive on software platforms and AI infrastructure enablers experiencing narrative mispricings, aggressively overweighting Information Technology while adding high-conviction exposure across enterprise automation and decentralized power solutions."

Executive Summary

The NZS Growth Equity strategy delivered a net return of -0.75% for the third quarter of 2026, trailing the Morningstar Global Target Market Exposure Index benchmark net return of +1.62%. Year-to-date, the strategy generated a net return of +12.78%, in line with the index net return of +12.80%. In the third quarter, optionality tail software holdings sharply rebounded, offsetting weakness across resilient semiconductor holdings. The strategy completed the quarter with its largest portfolio overweight position to Information Technology in several years, while retaining modest sector overweights in Healthcare and Industrials and trimming Communication Services, Industrials, and Real Estate. From a macroeconomic and market structure perspective, the manager highlights an environment characterized by heavy volatility driven by algorithmic traders, quant models, and retail sentiment lacking contextual awareness. This volatile background has allowed active stock pickers to exploit market overreactions, creating what the manager terms a contextual edge. While AI infrastructure and semiconductor names cooled during the quarter, software enterprise fundamentals demonstrated accelerating organic growth and pricing resilience rather than displacement, prompting significant portfolio realignment. Portfolio activity was marked by capital additions to enterprise software and selected AI infrastructure enablers following temporary share price pullbacks. The strategy re-initiated positions in Okta and ServiceNow, while trimming Atlassian back into an optionality weighting following strong share price outperformance. Additional capital was deployed into core AI names including NVIDIA, Quanta Services, Cadence, Lumentum, Lam Research, ARM Holdings, Marvell, and new entrant Bloom Energy. Conversely, the manager fully exited positions in Ingersoll Rand, Uber, and CoStar Group.

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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

68%

CautiousHigh

Moderate (68%)

Positioning demonstrates disciplined conviction across a moderately diversified portfolio of 50-65 holdings structured between resilient compounders and optionality positions. The manager backed key software theses with direct capital redeployments into names like Okta and ServiceNow while scaling multiple semiconductor leaders during quarterly weakness.

Growth Outlook

72%

BearishBullish

Bullish (72%)

The manager expresses an optimistic forward outlook for technology-enabled growth businesses and AI infrastructure compounders, viewing market pullbacks as entry points. Market breadth is seen as inefficiently driven by algorithmic trading, presenting attractive opportunities for fundamental stock picking.

Risk Appetite

75%

DefensiveAggressive

Aggressive (75%)

Capital was actively shifted toward aggressive growth exposures, exiting the quarter with the strategy's largest overweight position to Information Technology in several years. Net additions across software, hardware, and healthcare reflect a confident, growth-oriented positioning posture.

Capital Deployment

72%

De-riskingDeploying

Deploying (72%)

The fund actively deployed capital on a net basis into Information Technology, Healthcare, and Financials while executing strategic trims and full exits in slower-growth industrials, mobility, and real estate names.

Forward Guidance

80%

CautiousExpansionary

Expansionary (80%)

Guidance explicitly signals ongoing deployment into structural technology beneficiaries and infrastructure plays while actively taking advantage of algorithmic market mispricings. Sizing in winning optionality positions is systematically adjusted as risk/reward dynamics evolve.

Language Signal

78%

BearishBullish

Bullish (78%)

Directional language is heavily positive, emphasizing acceleration in organic revenue growth, operating leverage, asymmetric upside, and long-term infrastructure opportunities. Mentions of risks are largely framed as flawed market narratives or temporary price overreactions.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Perceived macro risk is moderate, with attention focused on market-wide volatility generated by short-term AI-driven quantitative strategies, fluctuating interest rate expectations, and oil price pressures affecting air travel. Systemic risk warnings are absent.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The manager identifies an expanding opportunity pipeline across enterprise software leveraging autonomous AI agents and critical power generation equipment for data centers. New optionality positions were established in multiple distinct sectors including healthcare and financials.

Time Horizon

78%

Short-TermLong-Term

Decade+ (78%)

The investment strategy is explicitly centered on multi-year compounders capable of adapting to complex environments and extreme power-law distributions. Portfolio turnover is managed around long-term non-zero-sum business outcomes rather than quarterly benchmark tracking.