Aristotle Capital Management, LLC, an investment management company, released its “Core Equity Fund” Q2 2026 investor letter. A copy of the letter can be downloaded here. The fund returned 14.69% in the second quarter of 2026, slightly trailing the 15.20% gain of the S&P 500 Index as market performance remained highly concentrated in artificial intelligence (AI)-related companies. The quarter was marked by strong equity market gains, with the S&P 500 reaching new record highs, while the Bloomberg U.S. Aggregate Bond Index advanced 0.67%. Economic conditions remained resilient, with unemployment at 4.2%, inflation easing to 3.5% year-over-year in June from 4.2% in May, and real GDP growth accelerating. The fund noted that AI-driven investment in semiconductors, memory, and data-center infrastructure continued to dominate market returns, creating significant performance dispersion across sectors. During the quarter, the managers increased exposure to areas benefiting from the AI infrastructure buildout and broader computing demand while reducing positions where growth prospects and valuation support appeared less compelling. Looking ahead, the fund remains constructive on equities, citing continued earnings growth, reasonable forward valuations, and long-term opportunities tied to AI, cloud computing, semiconductor demand, and other secular growth trends, although geopolitical tensions, persistent inflation, and the possibility of future Federal Reserve rate hikes remain key risks. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Aristotle Capital Management’s Core Equity Fund highlighted stocks like Amphenol Corporation (NYSE:APH). Amphenol Corporation (NYSE:APH) designs and manufactures electronic connectors, sensors, and interconnect systems used across communications, automotive, and industrial markets. The one-month return of Amphenol Corporation (NYSE:APH) was 13.51% while its shares traded between $104.71 and $178.52 over the last 52 weeks. On August 14, 2026, Amphenol Corporation (NYSE:APH) stock closed at approximately $167.11 per share, with a market capitalization of about $211.78 billion.
Aristotle Capital Management’s Core Equity Fund stated the following regarding Amphenol Corporation (NYSE:APH) in its Q2 2026 investor letter:
“We sold Amphenol Corporation (NYSE:APH), a leading global provider of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and specialty cable. While we continued to recognize the company’s high-quality operating model, diversified end-market exposure, strong free cash flow generation and disciplined acquisition strategy, our assessment of the company’s role within the broader Core Equity strategy changed, as the stock’s valuation increasingly reflected sustained AI data center growth. In particular, in a Fund where we seek to balance quality, growth and valuation discipline, the combination of a premium valuation and greater uncertainty around the durability of copper-related data center growth reduced our confidence that the forward-looking return adequately compensated for the risk of valuation downside. As a result, we exited the position.”
