Wedgewood Partners, an investment management firm, has published its investor letter for the fourth quarter of 2025. The company stated it expects increased market volatility in the years ahead and has adjusted its outlook accordingly. A copy of the letter is available for download.
The Wedgewood Composite recorded a net return of -1.8% for the quarter. This compares to gains of 2.7% for the S&P 500, 1.1% for the Russell 1000 Growth Index, and 3.8% for the Russell 1000 Value Index. Year-to-date, the Composite is up 4.3%, while the indexes have returned 17.9%, 18.6%, and 15.9%, respectively.
Wedgewood Partners noted that its long-standing focus on high-quality stocks, which has been successful since 1992, did not perform well in 2025. The letter attributed the underperformance to poor stock selection, valuation corrections in previously strong portfolio holdings, and a structural underweight position in artificial intelligence stocks.
Looking to 2026, the letter observed that crowded AI investments and elevated valuations are creating challenges for making prudent investment decisions.
In the letter, Wedgewood Partners highlighted Edwards Lifesciences Corporation (NYSE:EW) as a stock that contributed positively during the quarter. Edwards Lifesciences develops products and technologies for structural heart disease and critical care monitoring.
On January 16, 2026, Edwards Lifesciences stock closed at $84.35 per share. The stock's one-month return was -2.52%, while it has gained 20.88% over the past 52 weeks. The company has a market capitalization of $49.522 billion.
Regarding Edwards Lifesciences, Wedgewood Partners stated: "Edwards Lifesciences Corporation (NYSE:EW) also contributed to performance during the quarter. The Company presented favorable seven-year data for its transcatheter aortic valves, whereas competitive valves have exited several key markets. Edwards can drive double-digit earnings growth over the next few years, as its long-term data serves to evolve the standards of care and will make it easier for patients, doctors, and health systems to opt for its minimally invasive alternatives versus open heart surgery."
According to database information, 64 hedge fund portfolios held Edwards Lifesciences at the end of the third quarter, down from 65 in the prior quarter. Edwards Lifesciences is not included on a list of 30 Most Popular Stocks Among Hedge Funds.