Sentistrat

Markets this year have rewarded selectivity more than broad exposure. Our YTD return of +11.2% has edged ahead of the S&P 500’s +10.1%, though the margin remains modest and reflects both the concentration we maintain and the periods of hesitation in several large-cap names. META continues to demonstrate operating leverage from its advertising and infrastructure build-out, while PLTR has shown accelerating commercial traction that justified the position size. GOOGL, by contrast, has lagged as search monetization faces incremental pressure. We continue to size holdings according to the durability of their competitive advantages rather than near-term momentum. The portfolio remains anchored in businesses whose economics we expect to compound over five to ten years, even if quarterly results fluctuate with macro conditions or regulatory scrutiny. We accept that this approach will produce uneven results relative to benchmarks in any single period.

Our approach centers on concentrated long positions in software and technology businesses, supplemented by a core ETF holding for liquidity and broad equity beta. With 96% net long exposure and a 59.5% win ratio, the strategy relies on asymmetric outcomes rather than frequent trading. Position sizing reflects conviction in durable unit economics and management execution, tempered by a risk score of 4/10 that signals deliberate limits on leverage and sector crowding. We favor names where free-cash-flow margins can expand over time and where competitive moats are visible in data or platform effects. The Sharpe ratio of 0.82 paired with a Sortino ratio of 1.71 indicates that positive returns have been achieved with controlled downside volatility, a profile we view as more sustainable than higher gross returns accompanied by large drawdowns. Capital is reallocated only when fundamentals deteriorate or better opportunities emerge at lower valuations.

Over the next twelve months, the primary opportunity lies in continued adoption of enterprise AI tools and infrastructure, visible in holdings such as NVDA, PLTR, and META. Sustained capital expenditure by large technology firms should support revenue visibility for these businesses. However, elevated valuations leave little margin for disappointment in growth rates or margins. Regulatory actions targeting data practices or antitrust concerns could compress multiples across the portfolio, particularly for META and GOOGL. A sharper economic slowdown would likely pressure software spending and test the resilience of recent PLTR contract momentum. We would reduce exposure if key holdings showed persistent deceleration in free cash flow or if competitive intensity materially eroded pricing power. Macro-driven volatility remains the most immediate risk to near-term performance.

Past performance is not indicative of future results. Capital at risk.