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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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NCG Large Cap Growth Strategy 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (NCG Large Cap Growth Strategy)

Primary Source Intelligence • Q3 2026 Letter Analysis

NCG Large Cap Growth Strategy Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, NCG Large Cap Growth Strategy. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-3.03%

YTD+11.3%

Annualized+11.27%

Positioning StanceCONSTRUCTIVE

Market CapLarge Cap

GeographyUS

Digest Analysis

Quick Take

"Constructive on secular AI and industrial infrastructure cycles despite higher interest rates, rotating capital into software while exiting consumer discretionary and select hardware positions."

Executive Summary

During the third quarter of 2026, the NCG Large Cap Growth Strategy declined -3.03% net of fees, trailing the Russell 1000 Growth Index's gain of 0.92%. Year-to-date, the strategy has generated an 11.30% net return, outperforming the benchmark's 6.30% advance. The strategy's underperformance during the quarter was primarily driven by its overweight allocation to industrials and basic materials. At the end of the period, the portfolio maintained active sector tilts, remaining heavily allocated to technology at 57% (underweight relative to the index's 70%), industrials at 22% (overweight), health care at 7%, financials at 5%, consumer discretionary at 3%, and basic materials at 3%, with cash held at 1%. Macroeconomic conditions grew more complicated as the breakdown of the U.S.-Iran ceasefire caused Brent crude to surpass $100 per barrel, reigniting inflation pressures. August headline CPI rose 3.4% year-over-year, prompting the Federal Reserve to implement a 25 basis point rate increase and project sticky inflation through 2029. Consequently, the 10-year Treasury yield surged above 5%, dampening equity market breadth and sparking sharp factor rotations across technology and industrial supply chains. Portfolio activity during the quarter featured seven new entries and seven full exits. New additions included ServiceNow, Snowflake, and Twilio in enterprise technology; Eli Lilly and Mirum Pharmaceuticals in health care; and Deere & Company and Boeing in industrials. Complete exits included Tesla, Roku, AppLovin, DigitalOcean, Bloom Energy, Boeing, and Mirum Pharmaceuticals. Top absolute contributors were Microsoft, NVIDIA, and CrowdStrike, while FTAI Aviation, Applied Materials, and RBC Bearings were the primary detractors.

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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

65%

CautiousHigh

Moderate (65%)

Position turnover was elevated with seven new additions and seven full liquidations across sectors, though portfolio allocation reflects high active weights in technology (57%) and industrials (22%). Sizing per individual stock is not detailed, but thematic sector bets and adherence to strict sell discipline demonstrate structured execution. The manager maintains a clear base case favoring resilient earnings over macro noise.

Growth Outlook

58%

BearishBullish

Neutral (58%)

The manager remains constructive on structural growth and earnings resilience while explicitly acknowledging that the macro environment has grown more complicated. Stickier inflation, the Fed's return to tightening, and a 10-year Treasury yield above 5% create a selective, narrow market regime. However, ongoing upward earnings revisions and multi-year AI capital spending cycles provide a supportive backdrop.

Risk Appetite

62%

DefensiveAggressive

Balanced (62%)

The portfolio carries a tiny 1% cash allocation and remains substantially exposed to equities, with an aggressive 22% overweight in industrials. At the same time, the manager remains underweight consumer discretionary and technology relative to index benchmarks due to valuation and borrowing cost sensitivities. De-risking via exits in ad-tech, electric vehicles, and capital equipment shows tactical prudence.

Capital Deployment

50%

De-riskingDeploying

Net Neutral (50%)

Cash levels remained minimal at 1% of net assets, reflecting nearly fully invested capital without large directional swings in cash balances. Portfolio activity was balanced on a gross basis, featuring seven new entries offset by seven full liquidations to zero. Capital was rapidly reallocated rather than substantially injected or withdrawn.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

The manager intends to remain selective, deploying capital into areas where growth prospects are solid and valuations are attractive, such as enterprise software and pharmaceuticals. Active portfolio repositioning begun in Q2 continued through Q3 with significant rotation. The team plans to leverage volatility and market dispersion to selectively build high-conviction positions.

Language Signal

56%

BearishBullish

Balanced (56%)

Constructive language highlighting durable competitive advantages, compounding, and multi-year secular cycles is counterbalanced by repeated warnings regarding sticky inflation, energy shocks, and rate headwinds. While describing large-cap tech valuations as embedding high expectations, the manager emphasizes that fundamental earnings growth outpaces share prices across many sectors.

Perceived Risk

72%

Low RiskElevated

Elevated Risk (72%)

The letter emphasizes substantial macroeconomic and geopolitical vulnerabilities, including crude prices surging above $100, renewed hostilities near the Strait of Hormuz, and sticky inflation pushing 10-year Treasury yields above 5%. Narrow market leadership, escalating debt-financed AI buildouts, and upcoming midterm elections are highlighted as risks that warrant respect and caution.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

Market leadership is described as narrow and increasingly concentrated in mega-cap technology, requiring a highly selective approach. Nevertheless, the team found sufficient ideas to initiate seven new positions across software, pharmaceuticals, and industrials in Q3. Upward corporate earnings revisions and valuation multiple compression are creating idiosyncratic entry points.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The manager explicitly frames capital expenditures in AI infrastructure and re-industrialization as multi-year secular cycles rather than short-term trends. Portfolio selection prioritizes long-term earnings compounding over multi-year periods, resisting short-term macro fluctuations. The historical track record is evaluated over multi-year and since-inception spans.