Wedgewood Partners, an investment management firm, has issued its investor letter for the fourth quarter of 2025. The firm stated it expects stronger market volatility in the coming years and has moderated its enthusiasm. The Wedgewood Composite returned -1.8% net in the fourth quarter. This compares to the S&P 500's 2.7% return, the Russell 1000 Growth Index's 1.1%, and the Russell 1000 Value Index's 3.8%. Year-to-date, the Composite gained 4.3%. The respective indexes returned 17.9%, 18.6%, and 15.9%.
The letter noted the firm's historical focus on high-quality stocks has worked since 1992 but not in 2025. It highlighted poor stock selection, valuation correction for past strong performers, and being structurally underweight in AI stocks as drivers of the underperformance. For 2026, the letter pointed to crowded AI investments and stretched valuations creating pressure on prudent investment decisions.
In the letter, Wedgewood Partners highlighted stocks including Chubb Limited. Chubb Limited stock closed at $300.77 per share on January 16, 2026. Its one-month return was -3.27%, while it gained 11.61% over the last 52 weeks. The company has a market capitalization of $119.914 billion.
Regarding Chubb Limited, Wedgewood Partners stated: "We initiated a new position during the quarter in Chubb Limited, long a global leader in the property and casualty insurance industry. As you may know, Wedgewood has been somewhat unusual over time for a 'growth' manager in holding positions across exceptional insurance-related industries, most notably as a 20-year shareholder in Berkshire Hathaway and, more recently, Progressive."
According to database information, 64 hedge fund portfolios held Chubb Limited at the end of the third quarter, up from 61 in the previous quarter.