Aristotle Funds, an investment advisory firm, has released its investor letter for the fourth quarter of 2025, covering the performance and outlook of its Core Equity Fund. The letter indicates a robust performance in U.S. equity markets, with the S&P 500 Index achieving a notable increase of 2.66%, while the Bloomberg U.S. Aggregate Bond Index saw a rise of 1.10%.
The report highlights that within the Russell 1000 Growth Index, sectors such as healthcare, communication services, and financials were among the top performers. In contrast, utilities, real estate, and materials lagged behind. Despite the strong overall market performance, the U.S. economy exhibited signs of resilience, although consumer confidence deteriorated toward the end of the year, instilling concerns regarding future spending and labor market stability.
The Federal Reserve adopted a cautious stance in light of mixed economic signals and uncertainties surrounding incoming data. The influence of artificial intelligence remained a significant theme within the market throughout the quarter. The Aristotle Core Equity Fund (Class I-2) outperformed the S&P 500 Index, posting a return of 3.15% for the quarter, attributed to both allocation effects and effective security selection.
A focal point in the letter was Coinbase Global, Inc. (NASDAQ:COIN), which is recognized as a major platform for trading and managing cryptocurrencies. As of February 26, 2026, Coinbase’s stock was priced at $181.06 per share, reflecting a one-month decline of 7.02%, and a notable decrease of 16.03% over the past year. With a market capitalization of approximately $48.824 billion, Coinbase was founded in 2012 and has positioned itself as a leader in the U.S. cryptocurrency exchange landscape, boasting over $425 billion in assets on its platform.
The investor letter outlined Coinbase’s commitment to regulatory compliance, strong cybersecurity measures, and proactive engagement with regulatory bodies, distinguishing it within the cryptocurrency sector. Despite its prominent position, Coinbase was not included in the list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of Q4 2025, 64 hedge funds held Coinbase shares, a decrease from 73 in the preceding quarter. The firm reported a total revenue of $1.8 billion for Q4, indicating a 5% reduction from Q3 2025.
While recognizing Coinbase’s investment potential, Aristotle Funds expressed a preference for certain artificial intelligence stocks that they believe may offer greater upside potential with reduced downside risk. The report encourages investors looking for promising opportunities, particularly in the AI sector amid current market dynamics.
In addition, the investor letter provided insights into various stock recommendations and market analyses, guiding investors seeking to make strategic decisions in the evolving economic landscape.
