Date: Thursday, July 16, 2026
U.S. portfolios had an outstanding quarter on every measure
We outperformed all our benchmarks by a wide margin for the quarter and YTD. Valuation multiple expansion was the main driver of 2Q performance, while fundamentals remained strong. YTD returns were driven mostly by earnings growth, as 2Q multiple expansion reversed 1Q compression.
Global and International returns were also outstanding
Portfolios outperformed all our benchmarks by a wide margin for the quarter and YTD. As in the U.S., valuation multiple expansion was the main driver of 2Q performance, reversing 1Q compression.
AI Exposure has been the biggest driver of stock level performance
Our portfolios are well balanced between AI Winners, AI Neutral, and “perceived” AI Losers. AI winners have driven returns in the quarter and YTD. Neutral and “perceived” Losers have produced good earnings growth and remain very cheap due to multiple compression.
We believe portfolio positioning remains attractive after 2Q gains
U.S. NTM P/E stands at 12.8x, little changed since the start of year. Average historical growth rate of 11.4% is 4.7 percentage points faster than the S&P 500. Global and International portfolios share a similar combination of discount value and quality growth.
Past performance is not necessarily indicative of future results. Please see the more complete performance information, and the footnotes and disclaimers set forth in the replay. As well, please see www.lyricalam.com/notes for a discussion of material risks of an investment.
Summary Performance Data:
ALL DATA IS AS OF June 30, 2026. THIS DOCUMENT IS CONFIDENTIAL AND INTENDED SOLELY FOR THE RECIPIENT. IT MAY NOT BE REPRODUCED OR REDISTRIBUTED WITHOUT THE PRIOR WRITTEN CONSENT OF LYRICAL ASSET MANAGEMENT (LAM).
THIS IS NOT AN OFFERING OR THE SOLICITATION OF AN OFFER TO INVEST IN THE STRATEGY PRESENTED. ANY SUCH OFFERING CAN ONLY BE MADE FOLLOWING A ONE-ON-ONE PRESENTATION, AND ONLY TO QUALIFIED INVESTORS IN THOSE JURISDICTIONS WHERE PERMITTED BY LAW.
THERE IS NO GUARANTEE THAT THE INVESTMENT OBJECTIVES OF OUR STRATEGIES WILL BE ACHIEVED. RISKS OF AN INVESTMENT INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS OF INVESTING IN EQUITY SECURITIES GENERALLY, AND IN A VALUE INVESTING APPROACH, MORE SPECIFICALLY. MOREOVER, PAST PERFORMANCE SHOULD NOT BE CONSTRUED AS AN INDICATOR OF FUTURE PERFORMANCE. THE FOREGOING INFORMATION HAS NOT BEEN PROVIDED IN A FIDUCIARY CAPACITY, AND IT IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSIDERED AS, IMPARTIAL INVESTMENT ADVICE.
INDEXES ARE PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY, ARE UNMANAGED, REFLECT REINVESTMENT OF INCOME AND DIVIDENDS AND DO NOT REFLECT THE IMPACT OF ADVISORY FEES. INVESTORS CANNOT INVEST DIRECTLY IN AN INDEX. COMPARISONS TO INDEXES HAVE LIMITATIONS BECAUSE INDEXES HAVE VOLATILITY AND OTHER MATERIAL CHARACTERISTICS THAT DIFFER FROM THOSE OF LYRICAL’S STRATEGIES.
THE S&P 500 INDEX IS A MARKET CAPITALIZATION WEIGHTED INDEX COMPRISED OF 500 WIDELY-HELD COMMON STOCKS. THE S&P 500 VALUE INDEX MEASURES THE PERFORMANCE OF THE LARGE CAP VALUE SEGMENT OF THE U.S. EQUITY UNIVERSE. IT INCLUDES THOSE S &P 500 COMPANIES WITH LOWER PRICE TO BOOK RATIOS AND LOWER EXPECTED GROWTH VALUES.
THE S&P 500 EQUAL WEIGHT INDEX (EWI) IS THE EQUAL-WEIGHT VERSION OF THE WIDELY-USED S&P 500. THE INDEX INCLUDES THE SAME CONSTITUENTS AS THE CAPITALIZATION WEIGHTED S&P 500, BUT EACH COMPANY IN THE S&P 500 EWI IS ALLOCATED A FIXED WEIGHT - OR 0.2% OF THE INDEX TOTAL AT EACH QUARTERLY REBALANCE.
THE MSCI EAFE INDEX IS DESIGNED TO REPRESENT THE PERFORMANCE OF LARGE AND MID-CAP SECURITIES ACROSS 21 DEVELOPED MARKETS, INCLUDING COUNTRIES IN EUROPE, AUSTRALASIA AND THE FAR EAST, EXCLUDING THE U.S. AND CANADA. THE INDEX IS AVAILABLE FOR A NUMBER OF REGIONS, MARKET SEGMENTS AND SIZES AND COVERS APPROXIMATELY 85% OF THE FREE FLOAT-ADJUSTED MARKET CAPITALIZATION IN EACH OF THE 21 COUNTRIES.
THE MSCI WORLD INDEX CAPTURES LARGE AND MID-CAP REPRESENTATION ACROSS 23 DEVELOPED MARKETS (DM) COUNTRIES. WITH 1,430 CONSTITUENTS, THE INDEX COVERS APPROXIMATELY 85% OF THE FREE FLOAT-ADJUSTED MARKET CAPITALIZATION IN EACH COUNTRY.
THE MSCI ACWI SUSTAINABLE IMPACT INDEX IS DESIGNED TO IDENTIFY LISTED COMPANIES WHOSE CORE BUSINESS ADDRESSES AT LEAST ONE OF THE WORLD’S SOCIAL AND ENVIRONMENTAL CHALLENGES, AS DEFINED BY THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS. THE SUSTAINABLE IMPACT CATEGORIES INCLUDE: NUTRITIOUS PRODUCTS, TREATMENT OF MAJOR DISEASES, SANITARY PRODUCTS, EDUCATION, AFFORDABLE HOUSING, LOANS TO SMALL AND MEDIUM SIZE ENTERPRISES, ALTERNATIVE ENERGY, ENERGY EFFICIENCY, GREEN BUILDING, SUSTAINABLE WATER, AND POLLUTION PREVENTION. TO BE ELIGIBLE FOR INCLUSION IN THE INDEX, COMPANIES MUST GENERATE AT LEAST 50% OF THEIR SALES FROM ONE OR MORE OF THE SUSTAINABLE IMPACT CATEGORIES AND MAINTAIN MINIMUM ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) STANDARDS. THE PARENT INDEX IS MSCI ACWI. CONSTITUENT SELECTION IS BASED ON DATA FROM MSCI ESG RESEARCH.