Equities

Tracking error has risen sharply since mid-2025, but that does not necessarily mean active portfolios have become riskier. As AI-related stocks increasingly dominate benchmark returns, diversified portfolios may have become less correlated with the index. Higher tracking error may therefore reflect benchmark concentration, not greater portfolio risk.

Since mid-2025, a sharp rise in market concentration and a decline in breadth have challenged quality managers. We are managing through this period with a continued focus on quality, diversification, and risk management. In our view, the recent struggles of quality investing do not reflect a broken investment style.

We examine where we currently stand in the artificial intelligence (AI) cycle, how much further the AI boom may run, and why current market weakness could present long-term opportunities.

How do you make renewable power available when the sun isn’t shining or the wind isn’t blowing? Storage may be an important puzzle piece of the answer.

Investing has no perpetual motion machine. Just as energy comes at a cost, growth comes with risk. The AI boom highlights this trade-off: while AI-related stocks are driving returns, future payoffs remain uncertain. Quality investing seeks to maximize growth per unit of risk through disciplined portfolio construction and balance.

This article examines the central paradox of the AI economy: intelligence is becoming dramatically cheaper even as technology companies invest record sums in AI infrastructure. It explores the AI value chain, token economics, the open-versus-closed model debate, and whether soaring usage can offset falling prices as compute supply remains constrained.

In an increasingly deglobalized world, governments are seeking energy and commodity autonomy in the form of domestic supply chains and strategic reserves. What does this mean for the energy transition?

Our Quality Growth team outlines an approach to building resilient portfolios that can also deliver attractive growth. The team seeks to identify companies with superior profitability, predictable earnings growth, and appropriate valuations. They classify quality companies into three categories: Leaders, Defenders, and Opportunistic, while balancing growth and stability.

China’s luxury market is being reshaped: ultra-high-end brands remain resilient, while mid-tier players face pressure from premium and domestic competitors. Consumers are shifting spending toward experiences and local brands, with uneven recovery and opportunities emerging in platforms and adaptable operators.

Portfolio manager Ed Walczak shares his thoughts on his trip to the Berkshire Hathaway annual meeting, his 30 th visit. He focuses on investing versus speculating in today’s AI-obsessed market, and how sticking to a discipline might be harder but more important than ever.

Like oil once powered the industrial era, chips have become a key input powering broad economic activity, with expectations for demand to continue through 2026 and into 2027. In our view, “picks-and-shovels” companies should benefit regardless of which model, hyperscaler, or foundation lab ultimately wins.

Galderma is a pure play dermatology company with steadily growing aesthetics and skin care franchises. Galderma’s Dysport is taking share from Botox, while Nemluvio, its novel itch biologic, is gaining traction. We believe the company may see long term revenue and profit growth ahead. Turns out, demand for better skin is remarkably durable.