In a slower growth environment, the managers believe higher quality, dividend paying large-cap stocks may be better positioned than growth-oriented benchmarks to navigate prolonged geopolitical strain.
Capital One recently expanded its capabilities by acquiring Discover Financial and financial technology firm Brex, which the fund expects to drive significant synergies and potential for multiple expansion.
International Business Machines was added to the fund due to its resilient legacy systems, strategic AI integration in services, steady software growth, and an attractive valuation following a recent price decline.
KKR was sold due to increasing uncertainty tied to hidden private credit issues and software exposure that seem to have weakened investor sentiment toward alternative investments.
The fund delivered a positive return for the quarter but underperformed the Russell 1000 Value Index, with underperformance resulting from stock selection in the information technology and consumer discretionary sectors.
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Key takeaways
1 Market volatility amid economic and AI uncertainty
Volatility rose in the first quarter amid shifting interest rate expectations, geopolitical tension and mixed economic data. The S&P 500 Index had its largest quarterly decline since
