Here’s a summary of the key points from the recent Q2 2026 investor letter from WestEnd Capital Management:
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Performance Overview: WestEnd Capital Management’s Core Strategy achieved a net return of 16.3% for the quarter, surpassing the S&P 500 which returned 15.0%. This success was attributed to strong earnings and upward revisions for U.S. companies.
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Profit Margins: The S&P 500 net profit margins hit a decade high of 14.8% in Q1 and are expected to stay above 14% in Q2, despite challenges like increased interest rates.
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Investment Focus: The investment strategy remains centered on technology, infrastructure, demographic trends, financial innovation, and selective consumer opportunities.
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Space Exploration Technologies Corp. (NASDAQ: SPCX):
- SpaceX, a significant player in aerospace and satellite internet, was highlighted.
- Although WestEnd sees great potential in SpaceX, they opted not to invest during its IPO due to concerns over valuation.
- As of September 3, 2026, SPCX had a market cap of $2.03 trillion, trading at $149.74 per share.
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Investment Strategy Commentary: WestEnd expressed admiration for SpaceX but indicated that their decision against investing was based on valuation assessments rather than the company’s operational merits.
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Hedge Fund Holdings: At the end of Q2, 119 hedge funds held SPCX, but WestEnd believes there are other AI stocks with better upside potential and lower risks.
For more detailed insights, consider reviewing the full investor letter here.
