Date: Tuesday, October 14, 2025
Third quarter returns continued an already strong year in the U.S.
Lyrical-CS returned 3.4% in the quarter, bringing the year-to-date return to 15.7%. The S&P 500 continued to be boosted by mega-cap growth stocks and returned 8.1% in the quarter, outperforming our CS composite by 470 basis points, but we still lead that index by 90 bps for the year.
Third quarter returns continued an even stronger year for International.
TThe MSCI EAFE index returned 4.8% in the quarter and is now up 25.1% year-to-date, outperforming the S&P 500 by 10.3 percentage points. Lyrical’s International composite returned 2.6% in the quarter, underperforming the EAFE, but is still outperforming for the year by a wide margin with a 30.6% return, 550 bps ahead of the EAFE index.
Like U.S. and International, Global Value and GIVES underperformed in the quarter, but are outperforming for the year.
Lyrical Global returned 2.5% in the quarter, bringing the year-to-date return to 18.8%. The MSCI World Index was also boosted by U.S. mega-cap growth stocks and returned 7.3% in the quarter, outperforming our Global composite by 480 basis points. Year-to-date we still lead that index by 140 bps.
GIVES returned 5.6% in the quarter, compared to 10.1% for the MSCI Sustainable Impact Index. Year-to-date GIVES returned 27.7%, 10.6 percentage points ahead of the index.
We believe our uncommon combination of value and growth is as attractive as ever.
In regard to valuation, the value spread in the U.S. between our portfolio and the S&P 500 is historically wide at 80%. This compares to about a 30% average spread during the first decade of our firm. Regarding growth, our U.S. companies have an average historical EPS CAGR of over 10%, more than three percentage points faster than the S&P 500 growth of 6.4%.
If our companies keep compounding earnings, their stock prices should follow. And if that growth continues to match or outpace that of the S&P 500, their valuation multiples should rise too, and their stock prices should rise even more.
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 attachment and linked 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 SEPTEMBER 30, 2025. 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 CAPACTIY, 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.