Large Cap Equity Fund ends 2025 with modest gains but lags behind benchmark
The Large Cap Equity Fund faced a mixed end to 2025, with modest gains in the fourth quarter but an overall decline for the year. While some sectors like health care delivered strong results, the Fund's returns lagged behind its benchmark. Key adjustments to stock selection and position sizing aimed to improve future performance.
The Fund's Institutional Class returned +0.55% in the final quarter of 2025, trailing the Bloomberg U.S. 1000 Index's +2.39%. For the full year, performance was weaker, with a -0.23% return compared to the index's +17.51%. Stock picking struggled to match market gains, though health care stocks stood out as a bright spot. Strong contributions came from Thermo Fisher Scientific and Danaher, both rallying on improved organic growth in their core businesses.
The AI sector cooled off after a busy summer, but Google's parent company, Alphabet, delivered standout returns. Its latest Gemini AI release exceeded expectations, boosting investor confidence. Meanwhile, the Fund made more exits than usual in 2025, with many sales proving profitable. New purchases also added value, outperforming the benchmark.
To refine its approach, the Fund adjusted position sizing rules. These changes aimed to reduce losses from underperforming stocks while better capturing upside over time. The firm's guiding principle, 'Mindfully Adaptable,' emphasises continuous learning and deliberate innovation to enhance investment strategies.
The Fund's fourth-quarter gains were modest, and annual returns fell short of the benchmark. However, targeted improvements in stock selection and risk management could shape future results. Health care and AI-driven stocks like Alphabet provided key support, while structural adjustments seek to strengthen long-term performance.
