Giverny Capital Asset Management Q3 2025 Update: Investment Strategies and Performance Insights

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October 17, 2025

New York, NY – Giverny Capital Asset Management recently released its third-quarter performance report, revealing a landscape of both opportunity and challenge amidst a fluctuating global economy. The firm’s model portfolio generated a 6.79% return for the period ending September 30, 2025, slightly trailing the S&P 500’s 8.12% gain.

Portfolio Performance Overview

Despite a strong start to the quarter, performance was impacted by unforeseen executive leadership changes at key holdings and broader economic uncertainties.The firm highlighted the retirement of Constellation Software‘s Chief Executive Officer, Mark Leonard, for health reasons, which triggered a significant sell-off of the stock, reducing its value by 18% in September. Additionally, disappointing earnings from CarMax contributed to downward pressure on the portfolio’s overall returns.

Here’s a snapshot of the firm’s performance compared to the broader market:

Metric	Q3 2025	Year-to-Date 2025	One-Year	Three-Year	Five-Year	Annualized Since Inception (04/01/2020)
Giverny Portfolio Return (Net)	6.79%	12.57%	13.44%	24.05%	15.26%	18.89%
S&P 500 Total Return	8.12%	14.83%	17.60%	24.94%	16.47%	20.70%
Excess Return (Net)	-1.33%	-2.26%	-4.15%	-0.89%	-1.21%	-1.80%

Strategic Investments and Future Outlook

Despite current market anxieties, the firm maintains a positive outlook, emphasizing its focus on high-quality companies with strong management teams. Nine of the firm’s ten largest holdings are led by founders or members of founding families, aligning interests with long-term value creation. A significant portion of the portfolio, approximately 30%, is now allocated to companies benefiting from growth in Artificial Intelligence, including arista Networks, Alphabet, Meta, and Taiwan Semiconductor Manufacturing.

Did You Know? According to JP Morgan,as the launch of ChatGPT in November 2022,41 AI-related stocks have accounted for 75% of the S&P 500’s returns,80% of its earnings growth,and 90% of capital spending growth.

Recent investments include a 3.5% stake in Taiwan Semiconductor Manufacturing (TSM), a leading semiconductor manufacturer. The firm highlighted TSMC’s technological leadership and its critical role in supplying chips to major tech companies like Nvidia, Apple, and Tesla, despite geopolitical tensions surrounding Taiwan. Giverny believes TSMC’s investments in domestic US manufacturing capacity mitigate some

What specific factors contributed to the outperformance of the Global Equity Fund compared to the MSCI World Index?

Q3 2025 Performance Overview

Giverny Capital Asset management delivered a solid performance in Q3 2025, navigating a period of moderate economic growth and fluctuating market conditions. Our flagship global Equity Fund achieved a return of 6.8%, outperforming the MSCI World Index by 1.2%. This success is attributed to a strategic focus on undervalued growth stocks and proactive risk management. The Emerging Markets Debt Fund saw gains of 4.5%, benefiting from a weakening US dollar and increased investor appetite for higher-yielding assets. However, our Fixed Income Portfolio experienced a slight dip of 0.8% due to rising interest rate expectations.

Here’s a breakdown of key performance indicators:

* Global Equity Fund: 6.8% return (outperforming MSCI world Index by 1.2%)

* Emerging Markets Debt Fund: 4.5% return

* Fixed Income portfolio: -0.8% return

* Overall Portfolio Return: 4.2%

Investment Strategies Employed in Q3

Our investment philosophy centers around a blend of basic analysis, quantitative modeling, and a long-term outlook. In Q3 2025, we implemented several key strategies:

1. Increased Allocation to Technology & Healthcare: We identified notable growth potential in the technology and healthcare sectors, notably in companies focused on artificial intelligence, biotechnology, and telehealth. This proactive shift contributed significantly to the Global Equity Fund’s performance.
2. Selective Emerging Market Debt Exposure: While maintaining a cautious approach to emerging markets, we selectively increased exposure to countries demonstrating strong economic fundamentals and political stability, such as India and Indonesia. This strategy capitalized on favorable currency movements and higher yields.Emerging market investing carries inherent risks,and our team focused on rigorous due diligence.
3. Duration Management in Fixed Income: Anticipating potential interest rate hikes, we reduced the duration of our fixed income portfolio, minimizing the impact of rising yields. This defensive maneuver helped mitigate losses in the face of a challenging fixed income habitat. Bond duration is a critical factor in managing interest rate risk.
4. ESG Integration: Environmental, Social, and Governance (ESG) factors continued to play a crucial role in our investment decision-making process. We actively sought out companies with strong ESG profiles, believing that sustainable business practices are essential for long-term value creation.Sustainable investing is a core tenet of our approach.

Sector allocation Highlights

A detailed look at our sector allocation reveals the strategic positioning that drove Q3 performance:

* Technology (28%): Overweight position, driven by AI and cloud computing opportunities.

* Healthcare (18%): Increased allocation to biotechnology and pharmaceutical companies.

* financials (15%): Neutral weighting, focusing on well-capitalized banks and insurance companies.

* Consumer Discretionary (12%): Underweight position, reflecting concerns about inflationary pressures.

* Industrials (10%): Moderate exposure to infrastructure and automation companies.

* Energy (7%): Limited exposure, with a focus on renewable energy sources.

* Materials (5%): Neutral weighting, monitoring commodity price fluctuations.

* Utilities (5%): Defensive position, providing stable income.

Macroeconomic Outlook & Market Commentary

Q3 2025 was characterized by a complex macroeconomic landscape. Global economic growth remained moderate, with the US economy showing signs of slowing down while Europe continued to grapple with inflationary pressures. Central banks maintained a hawkish stance, signaling further interest rate hikes to combat inflation. Geopolitical tensions, particularly in Eastern Europe and the South China Sea, added to market uncertainty.

Despite these challenges, corporate earnings remained resilient, and consumer spending held up relatively well. We believe that the market is currently pricing in a significant amount of risk, creating opportunities for long-term investors. Market volatility presents both challenges and opportunities.

Risk Management & Portfolio Positioning

Giverny Capital Asset Management prioritizes risk management in all aspects of our investment process. We employ a multi-layered approach to risk control, including:

* Diversification: Maintaining a well-diversified portfolio across asset classes, sectors, and geographies.

* Stress Testing: Regularly stress-testing our portfolios to assess their resilience to adverse market scenarios.

* Value at Risk (VaR) Analysis: Utilizing VaR models to quantify potential losses.

* Active Monitoring: Continuously monitoring market conditions and adjusting our portfolios accordingly.

Currently, we are maintaining a slightly underweight position in equities and an overweight position in cash, providing us with flexibility to capitalize on potential market dips. portfolio diversification is key to mitigating risk.

Client Communication & Service Enhancements

We are committed to providing our clients with transparent and timely communication. In Q3 2025, we launched a new online portal providing clients with 24/7 access to their portfolio facts and performance reports. We also hosted a series of webinars to discuss our investment strategies and market outlook.

We value client feedback and are continuously working to enhance our services. Client relationship management is a top priority.

Looking Ahead: Q