GreensKeeper Value Fund Reports Q3 Gains, Driven by Alphabet's AI Momentum Amid Sectoral Shifts
## Q3 Performance Overview
The **GreensKeeper Value Fund** recorded a +4.0% return in the third quarter of 2025, bringing its year-to-date performance to +0.2% net of all fees and expenses. The fund, which typically maintains a concentrated portfolio of 15-20 stocks across various sectors and market capitalizations, aims to deliver absolute returns in excess of both the **S&P/TSX Index** and the **S&P 500 Index** over the long term.
### Alphabet Leads Contributions Amid AI Expansion and Legal Victory
**Alphabet Inc. (GOOG)** emerged as the fund's top contributor, with its shares advancing +37.3% during the quarter. This performance was largely attributed to significant momentum in the company's **Gemini AI** models and a favorable court ruling in an antitrust case. **Alphabet**'s **Gemini AI** models have shown increasing market penetration, gaining share in global search instances. The recent launch of **Gemini Enterprise**, which integrates advanced AI capabilities with enterprise security and data warehousing, underscores the company's strategic focus on the business segment. Investors have noted that **Alphabet**'s robust distribution networks, proprietary hardware, and strong balance sheet position it advantageously in the evolving AI market.
On September 15, 2025, **Alphabet**'s market capitalization surpassed $3 trillion, marking it as the third U.S. company to reach this milestone, driven by a 4.3% daily gain. The stock's year-to-date gain of 32% significantly outpaced the **S&P 500**'s 12.5% return, reflecting strong investor confidence in its AI expansion and cloud unit revenue growth, which increased nearly 32% in Q2.
### Fiserv and Novo Nordisk Face Growth Challenges
Conversely, **Fiserv Inc. (FI)** was the largest detractor for the fund, with its stock declining -25.2% over the quarter. The decline was primarily linked to a deceleration in the volume growth of its **Clover** platform, which processes payments for small, mid-sized, and large businesses. Despite this slowdown, **Fiserv**'s adjusted revenue grew 8% to $5.2 billion in the second quarter of 2025, and the company projects continued double-digit growth with improving cash flow. Management has demonstrated confidence through an increased share repurchase program, committing to approximately 130% of free cash flow for buybacks in 2025. Some analyses suggest the current sell-off may be overdone, given the company's high margins and robust free cash flow, indicating the stock may be trading at attractive valuation levels.
**Novo Nordisk (NVO)** was the second-largest detractor, experiencing a -19.6% decline. The pharmaceutical company faced headwinds from lowered guidance, persistent use of compounded **GLP-1** medications by competitors, and increased market competition. The U.S. **GLP-1** market has seen intensified competition, with **Eli Lilly**'s **Zepbound** capturing a significant market share. In response, **Novo Nordisk** appointed a new CEO in May 2025, **Maziar Mike Doustdar**, who is spearheading a strategic pivot towards operational efficiency, global diversification, and accelerated research and development. The company is prioritizing the development of **amycretin**, a once-weekly **GLP-1** and amylin receptor agonist with potential for substantial weight loss, as a key differentiator.
### Strategic Portfolio Adjustments: Cboe Exit and Adobe Entry
During the quarter, the **GreensKeeper Value Fund** completely exited its position in **Cboe Global Markets Inc. (CBOE)**. The decision stemmed from a perception that the shares were fully valued, despite a strong historical performance, with the stock appreciating 300% since its initial purchase in 2020. Concerns were raised regarding the proliferation of zero days to expiration (**0DTE**) option trading, particularly the increased retail investor involvement, suggesting the company might be "overearning" in certain segments. The fund anticipates potential contraction in trading volumes of these shorter-duration contracts during a prolonged market downturn.
Conversely, the fund initiated a new purchase of **Adobe Inc. (ADBE)**, based on the belief that the company is well-positioned to integrate AI products and benefits from high switching costs for its creative and document tools. **Adobe** demonstrated robust performance in Q2 FY2025, with revenue reaching $5.87 billion, an 11% year-over-year increase, and non-GAAP earnings per share surpassing consensus estimates. The company's AI-powered offerings, such as **Adobe Firefly** and **GenStudio**, are showing promising adoption rates and are expected to contribute significantly to new annual recurring revenue.
Additionally, **ICON Plc (ICLR)** was the fund's second top contributor, advancing +20.3% in the quarter. **GreensKeeper** had acquired **ICON** shares earlier in the year, recognizing that the market's reaction to potential pharmaceutical R&D spending reductions was excessively punitive, despite short-term industry uncertainties.
### Broader Market Context and Investment Philosophy
The **GreensKeeper Value Fund** adheres to a value investing style and has historically maintained caution during periods of market speculation and elevated risk-taking, characterizing the current environment as "frothy" with soaring valuations in certain asset classes. The fund's objective is to acquire high-quality companies with a substantial margin of safety, eschewing benchmarks to selectively invest where value is identified. This selective approach is evident in the divergence of performance among its holdings, reflecting the mixed sentiment within the broader market, which sees bullish trends in AI and specific technology stocks juxtaposed with bearish pressures on others.
### Outlook and Key Considerations
Looking ahead, investors will closely monitor **Adobe**'s continued integration and monetization of its AI offerings and its ability to sustain Digital Media ARR growth amidst competition. For **Novo Nordisk**, the focus will be on the Q3 2025 **Wegovy** sales, the results of **amycretin**'s Phase 3 trials, and the anticipated 2026 launch of oral semaglutide as the company strives to regain market share and leadership in the **GLP-1** segment. **Fiserv**'s recovery in its **Clover** business volume and the impact of its share buyback program on long-term shareholder returns will also be key indicators. The broader market is expected to remain cautious, with investment decisions likely emphasizing fundamental performance and risk management in a volatile environment characterized by ongoing technological shifts and evolving competitive landscapes.
