Wedgewood Partners First Quarter 2026 Client Letter - Dire Straits - Review and Outlook

Sep 16, 2026

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Wedgewood Partners’ First Quarter 2026 client letter presents a market review and forward-looking outlook framed by “Dire Straits” commentary and regional geopolitical observations. It summarizes performance across multiple composite and index benchmarks for Q1, YTD, and rolling horizons (1, 3, 5, 10, 15, 20, 25, 30 years) and discusses manager-versus-universe gain-to-loss ratios as of December 2025. The letter highlights Q1 top contributors and detractors, then details specific portfolio actions and operational fundamentals for key holdings, emphasizing revenue growth, demand trends, and positioning discipline.

LanguageEnglish

CategoryLetters

FormatPDF

Pages13

Reading Time5 min

AccessFree to download

Review and Outlook

Portfolio performance and benchmark results

Manager vs Universe: Gain to Loss Ratio

Q1 top contributors and bottom contributors

Portfolio actions and company highlights

Wedgewood Partners First Quarter 2026 Client Letter Dire Straits “Iran’s exercise of sovereignty over the Strait of Hormuz is and will remain Iran’s natural and legal right, and it constitutes a guarantee for the implementation of the other party’s commitments and must be recognized.” Iran’s counterproposal, Point 5 “Iran probably did not expect its Hormuz strategy to be this successful …the lesson Iran has learned from this war is that holding the global economy hostage is cheaper than anticipated.” Bloomberg Middle East Economist Dina Esfandiary Review and Outlook | Wedgewood Composite Net
Standard & Poor's 500 Index Russell 1000 Growth Index
Russell 1000 Value Index
Wedgewood Composite Net
Standard & Poor's 500 Index Russell 1000 Growth Index
Russell 1000 Value Index | 1Q
-6.3
-4.3 -9.8 2.1
10-Year
12.9
14.2
16.8
10.6 | YTD
-6.3
-4.3 -9.8
2.1
15-Year
12.0
13.3
15.3
10.5 | 1-Year
4.3
17.8
18.8
15.9
20-Year
10.5
10.5
12.5
8.1 | 3-Year
14.1
18.3
21.2
14.3
25-Year
9.5
9.2
10.2
8.1 | 5-Year
8.9
12.1
12.8
9.4
30-Year
11.8
10.0
10.5
9.1i | | --- | --- | --- | --- | --- | --- | Manager vs Universe:Gain to Loss Ratio As of December 2025 April 06, 2026 | 1/1 Gain to Loss Ratios (%) 2.0 1.8 1.6 1.4 1.2 1.0 0.8 | | 1 YEAR | 3 YEARS | 5 YEARS | 10 YEARS | 15 YEARS | 20 YEARS | 25 YEARS | 30
YEARS | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Median | 1.15 | 1.36 | 1.11 | 0.99 | 1.05 | 0.96 | 0.97 | 1.01 | | Wedgewood Large Cap Focused Growth | 1.02 | 1.68 | 1.16 | 1.13 | 1.21 | 1.17 | 1.11 | 1.26 | | Russell 1000 Growth | 1.14 | 1.71 | 1.15 | 1.07 | 1.20 | 1.10 | 1.05 | 1.06 | | S&P 500 | 1.08 | 1.35 | 0.98 | 0.82 | 0.92 | 0.82 | 0.81 | 0.87 | | Valid Count | 766.00 | 748.00 | 727.00 | 623.00 | 520.00 | 404.00 | 277.00 | 151.00 | Source: PSN Large Cap Manager Database. Data are calculated on a gross-of-fee basis for managers. Past performance does not guarantee future results. Future results may differ materially from past results. i. Portfolio returns and contributions, expressed as percentages, are calculated net offees. Contribution to return calculations is preliminary. Returns are presented net offees and include the reinvestment of all income.“Net (actual)” returns are calculated using actual management fees and are reduced by all fees and transaction costs incurred. Past performance does not guarantee future results. Additional calculation information is available upon request. Q1 Top Contributors Avg. Contribution [Wgt. to](Wgt. to) Return Taiwan Semiconductor Manufacturing Old Dominion Freight Line Motorola Solutions Chubb O’Reilly Automotive 9.46 3.92 5.62 3.31 3.20 1.23 0.81 0.58 0.15 0.05 Q1 Bottom Contributors Microsoft Meta Booking Holdings Alphabet Visa 6.03 8.15 4.91 9.35 5.16 -1.49 -1.17 -1.12 -0.79 -0.71 Top-performing contributors in the 3irst quarter include Taiwan Semiconductor Manufacturing, Old Dominion Freight Line, Motorola Solutions, Chubb, and O’Reilly Automotive. Top-performing detractors include Microsoft, Meta, Booking Holdings, Alphabet, and Visa. During the quarter, we bought Toll Brothers and Progressive, sold PayPal, increased Amazon, and trimmed Taiwan Semiconductor Manufacturing twice. Taiwan Semiconductor Manufacturing Company was a top contributor to portfolio performance in the first quarter. Revenues grew +25%, and the Company guided to accelerating revenue growth to +30% in 2026 as demand for compute accelerators for AI applications continues to ramp unabated. In addition, the Company recently reported that March revenue was up +45% year over year, +31% month over month, and +35% year to date. The semiconductor customer base has evolved to the point that the Company increasingly works directly with non-traditional end customers, particularly cloud serv

FAQs

What performance measures does the client letter report for Q1 2026?

It reports benchmark performance for Q1 and YTD as well as rolling periods such as 1-, 3-, 5-, 10-, 15-, 20-, 25-, and 30-year horizons across multiple composite and index series.

What does the “Manager vs Universe: Gain to Loss Ratio” section provide?

It provides gain-to-loss ratios expressed in percentages, comparing median results and specific manager and index categories over multiple time windows, based on data as of December 2025.

Which holdings were highlighted as key Q1 contributors and detractors?

Top contributors mentioned include Taiwan Semiconductor Manufacturing, Old Dominion Freight Line, Motorola Solutions, Chubb, and O’Reilly Automotive. Detractors mentioned include Microsoft, Meta, Booking Holdings, Alphabet, and Visa.

Sep 16, 2026

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