The Davenport Insider Buying Fund (DBUYX) demonstrated a commendable performance in the fourth quarter of 2025, recording a 3.18% gain and outpacing the S&P 500 Index's 2.66% rise. This quarterly success, however, did not fully compensate for the year-long performance, as the fund's annual increase of 4.26% lagged significantly behind the S&P 500's robust 17.88% growth. The quarter also marked strategic portfolio adjustments, with the introduction of new positions in DraftKings Inc. (DKNG) and Carrier Global Corp (CARR), reflecting the fund's adaptive investment strategy.
During the fourth quarter of 2025, DBUYX's investment approach focused on identifying undervalued opportunities, leading to the notable outperformance against the S&P 500. This period saw a broadening of market returns and a shift in investor preference towards value-oriented stocks, benefiting DBUYX's portfolio. The fund's strategic underweighting in sectors like Communication Services and Technology, which had previously limited its upside during growth-led rallies, proved advantageous as market dynamics evolved.
The decision to incorporate DraftKings Inc. (DKNG) and Carrier Global Corp (CARR) into the portfolio was driven by compelling factors. Extensive insider buying in both companies signaled strong confidence from management, suggesting potential for significant turnaround or sustained growth. These new positions were based on a thorough analysis of perceived undervaluation and the presence of catalysts that could unlock future value, aligning with the fund's philosophy of leveraging insider insights for investment decisions.
Looking ahead, DBUYX maintains a substantial allocation of approximately 40% in small and mid-cap companies. This exposure is anticipated to be a key differentiator, particularly as market leadership is expected to broaden beyond large-cap stocks. The fund's management believes that these smaller and mid-sized holdings are poised for considerable growth, offering a unique avenue for outperformance relative to broader market indices like the S&P 500 in the coming periods.
The fourth quarter of 2025 was a period of strategic recalibration and positive returns for the Davenport Insider Buying Fund, despite its full-year performance trailing the broader market. The fund's ability to capitalize on changing market sentiments and its forward-looking investment in specific equities like DKNG and CARR, alongside a significant small and mid-cap presence, underscore a thoughtful approach to navigating complex market conditions and seeking long-term growth opportunities.
