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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"FAM Dividend Focus Fund returned 6.89% in Q2 2026, underperforming the Russell Midcap's 13.83% as AI infrastructure stocks dominated. Portfolio earnings are projected to grow 19% in 2026 while dividends rose 10.5%."
The FAM Dividend Focus Fund returned 6.89% in Q2 2026, trailing the Russell Midcap Index's 13.83% return as markets rewarded companies most closely tied to AI infrastructure spending. The fund's semiconductor holdings benefited significantly from AI-driven demand, while software positions faced headwinds from AI disruption concerns. Portfolio company earnings are expected to grow 19% in 2026, and dividends increased 10.5% over the past 12 months, with top growers including Amphenol (+51.5%), Fastenal (+18.2%), and Houlihan Lokey (+16.7%). Mid-cap valuations have become more compelling as stock performance has lagged earnings growth, creating acquisition opportunities—twelve of the fund's 28 holdings announced or closed acquisitions during the quarter. The manager initiated five new positions, the most in several years, including NASDAQ, Gildan Activewear, and Motorola Solutions. Looking ahead, company-level volatility is expected to remain elevated as earnings results validate or challenge high market expectations, particularly for AI-related investments. The manager remains focused on high-quality businesses with durable competitive advantages and expects portfolio activity to remain elevated as market dispersion creates opportunities for active stock selection.
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