3Q2025 - Global Growth Commentary
During the quarter, our focus on quality growth was tested amid a market environment that favored higher-beta growth stocks, resulting in performance that trailed broader indexes. Oracle, Shopify, and Icon were among the top contributors to results, while Paycom, SAP, and Adyen detracted from performance. We initiated new positions in NVIDIA, Broadcom, TSMC, Boston Scientific, and Uber to capture emerging opportunities, and selectively added to existing holdings. To support these investments and optimize the Portfolio, we exited ADP, Airbnb, Accenture, and Thermo Fisher Scientific and trimmed certain exposures. The Portfolio remains invested in high-quality businesses that we believe are well-positioned for attractive long-term returns across market cycles.
- Global equity markets extended their rally in Q3 2025 as enthusiasm for generative AI and strong capital flows into semiconductors remained the dominant market themes, while investors largely looked past ongoing trade and valuation concerns.
- Regional performance was mixed. U.S. equities outperformed following robust economic growth and earnings, while Japanese stocks maintained momentum on the back of corporate reforms and reflation. Emerging markets, especially China, saw significant gains due to AI optimism and supportive government policies.
- Our emphasis on quality growth investing was challenged by the market’s preference for high-beta growth stocks, contributing to underperformance relative to broader indexes during the quarter.
- Oracle, Shopify, and Icon were the top relative contributors to the portfolio's performance. Oracle, Shopify, and Alphabet were the top absolute contributors. Paycom, SAP, and Adyen were the largest relative and absolute detractors in the quarter.
- During the quarter, we established new positions in NVIDIA, Broadcom, TSMC, Boston Scientific, and Uber, and added to several existing holdings to capture emerging opportunities and evolving company fundamentals.
- To fund these investments and optimize portfolio positioning, we eliminated positions in ADP, Airbnb, Accenture, and Thermo Fisher Scientific, and trimmed selected exposures across the Portfolio.