CIO's Top Selection: Concentrated By Design

What Is It All About

To set expectations clearly: this strategy is entirely unconventional. It is managed by a single person, the CIO, and focused solely on risk-adjusted returns. The portfolio is highly concentrated, typically holding 15 stocks or less. While not an active trading strategy, turnover is naturally higher than that of our thematic products (typically 40-50% annually). This reflects the reality that only two to three truly high-conviction ideas emerge each year.

The benchmark is the Nasdaq 100, but stock selection can be completely uncorrelated to any benchmark in terms of geography, sector, or market cap. The only metrics that matter are the Nasdaq 100's performance and its associated volatility. This means the portfolio may at times be 100% exposed to mid-cap healthcare, or 50% in EU renewables and 50% in cash. Position sizing is based on risk contribution rather than nominal weight, with a maximum initial weight of 12.5% in any single name.

The Investment Process

The investable universe comprises approximately 4,000 stocks across Atonra’s eight thematic classifications. From this universe, stock selection follows a strict hierarchical process:

Theme/Sector Selection

The first and most important decision. Which sectors have structural tailwinds? Which themes align with the macro regime? As outlined in our 2026 Macro Outlook, fiscal dominance favors tangible (real) assets with pricing power and exposure to policy-driven spending. This guides the initial allocation framework.

Regional and Currency Allocation

Where is the best risk-adjusted opportunity within the chosen theme? The macro view on dollar dynamics, regional policy divergence, and valuation gaps determines geographic exposure. The current ~28% Greater China allocation reflects the asymmetric opportunity described in the macro note: $2tn policy-mandated spending, 2.6x P/S versus 7.3x for comparable US names, and foreign ownership at just 3.7%.

Stock Selection

Only after the theme and region are determined does individual stock picking begin, with the following criteria in mind: the highest risk-reward ratio and the most identifiable catalysts ahead. Binary outcomes are avoided wherever possible. This means limited exposure to clinical-stage biotech with single-product pipelines or companies dependent on regulatory decisions with unpredictable timing.

A Look In The Rearview Mirror

2025 tested convictions. YTD performance of +12.4% versus the Nasdaq 100's +22.1% tells an incomplete story. The 20-month track record at +62.4% vs. +41.7% reveals the strategy operating as designed. The divergence traces to a single decision.

June 3 to September 2: Defensive Rotation. Anticipating a potential market sell-off, the portfolio was rotated toward an equally weighted allocation across Atonra’s eight investment themes. This was a defensive posture designed to reduce concentration risk. During this period, the Nasdaq 100 rose 8.1%, while the CIO strategy fell 3.7%, resulting in a relative underperformance of nearly 12% over three months. The defensive rotation was wrong. The anticipated sell-off did not materialize, and the diversification diluted the strategy's natural edge.

September 3 onwards: re-concentration. On September 3rd, the portfolio was re-concentrated into high-conviction positions aligned with the macro thesis. Since then, the strategy has returned +18.1% compared to the Nasdaq 100's +9.5%, outperforming by 8.6 percentage points in just over three months. This is the strategy operating as designed: concentrated bets on the best risk-adjusted opportunities available.

Current Holdings and Catalysts

The following outlines the investment thesis and key catalysts for each holding over the next 6 to 12 months.

Technology (53.3%)

SoFi (11.8%) - Consumer Finance. The digital banking disruptor has revenue growth exceeding 35% and is improving unit economics. Catalysts: The rate-sensitive model benefits from a dovish Fed (May 2026 transition), potential S&P 500 inclusion, maximum sensitivity to the political put, domestic US exposure, and a mid-cap profile.

Riot Platforms (11.3%) - Blockchain/Data Centers. Bitcoin miner pivoting to AI/HPC data center services with 1GW capacity buildout. Catalysts: First HPC lease announcement expected early 2026 (potential re-rating trigger), 600MW Corsicana AI capacity monetization,

IBM (10.7%) - IT Services/Enterprise AI. Enterprise AI monetization with a hybrid cloud and quantum computing roadmap. Catalysts: AMD quantum computing partnership, $4.5 bn annual AI/automation savings target, and quantum computer commercialization by 2029. Enterprise AI infrastructure beneficiary, defensive tech positioning.

Marvell (6.3%) - Custom AI Silicon. Custom AI chip leader with 18 XPU sockets and $75B lifetime revenue pipeline. Catalysts: Celestial AI acquisition close (Q1 2026), 3nm custom chip ramp for hyperscalers, data center revenue growth 25%+ in 2026, potential S&P 500 inclusion.

Baidu (7.0%) - AI/Internet. China's AI leader with 40% of revenue from AI-empowered businesses growing at 50% annually. Catalysts: Kunlunxin chip spinoff/IPO, 6x surge in AI chip sales projected, AI cloud revenue accelerating to well over 50% growth in 2026, and Apollo Go robotaxi global expansion.

Alibaba (6.2%) - E-commerce/Cloud. China's tech giant with AI Cloud growing 34% YoY and 35.8% of % China cloud market share. Catalysts: $52B AI/cloud investment program, Quark AI glasses launch, continued e-commerce recovery.

Healthcare (23.4%)

Exelixis (10.1%) - Oncology Biotech. Commercial-stage oncology with $2.3B+ revenue guidance and diversified pipeline. Not a clinical-stage binary bet. Catalysts: Zanzalintinib FDA filing for colorectal cancer (2026), STELLAR-304 non-clear cell RCC data (H1 2026).

TransMedics Group (6.9%) - Medical Devices. Organ transplant revolution with 15 consecutive quarters of 30%+ growth and path to 30% operating margins by 2028. Catalysts: The launch of the Gen 3 OCS platform and the kidney program (2027) could potentially triple the addressable market.

Madrigal Pharmaceuticals (6.4%) - NASH/MASH Biotech. First-mover in $50B+ NASH market with FDA-approved Rezdiffra now annualizing >$1B in sales. Again, not a binary bet, already commercial. Catalysts: European launch continuing, compensated cirrhosis label expansion (2027), MGL-2086 Phase 1 combo trial (H1 2026).

Clean Energy (23%)

CATL (12.9%) - Battery/Energy Storage. Global battery leader with a 50%+ market share in China's EV market and pricing power. Catalysts: Hungary plant production (early 2026). Direct beneficiary of the 15th Five-Year Plan clean energy spending.

Sungrow (10.1%) - Solar/Energy Storage. Global #1 solar inverter supplier with balanced revenue mix (37% inverters, 32% storage). Catalysts: Global storage buildout acceleration, European/US manufacturing expansion. Trading at 0.5X PE/G (30% EPS growth). Macro alignment: power grid bottleneck thesis, China policy support, global energy transition capex.

How This Aligns With The Macro View

The macro thesis outlined in our coming 2026 Outlook identifies a uniquely supportive political configuration: America's 250th anniversary on July 4th, Fed chair transition in May (with the announcement of Powell's successor likely in early 2026), and midterm elections in November. The portfolio is positioned accordingly.

Mid-cap growth sensitivity. The positive small to mid-cap factor loading is deliberate. SoFi, TransMedics, Riot Platforms, and Marvell are all mid-cap names with maximum sensitivity to domestic fiscal stimulus and dovish Fed policy. The $930bn refinancing wall hits over-levered competitors hardest, creating relative winners among disciplined mid-caps.

China for uncorrelated alpha. The ~28% Greater China allocation (CATL, Sungrow, Baidu, Alibaba) provides exposure to a policy-driven rerating cycle independent of US political dynamics. The $ 2 trillion technology spending mandate of the 15th Five-Year Plan flows into semiconductors, AI, and clean energy.

Rate-sensitive beneficiaries. SoFi, Riot, and the clean energy names all benefit disproportionately from lower rates. A dovish Fed chair post-May 2026 creates tailwinds for these holdings.

AI infrastructure theme. IBM, Marvell, Baidu, and Alibaba are all well-positioned for enterprise AI infrastructure buildout, a secular trend that aligns with government capital expenditure priorities in both the US and China.

Healthcare without binary risk. Exelixis, Madrigal, and TransMedics are all commercial-stage healthcare names with proven revenue streams, not clinical-stage lottery tickets. They benefit from healthcare cost containment and M&A tailwinds, while avoiding the binary trial outcomes that characterize much of the biotech industry.

What Would Invalidate This View

• A sharp reversal in the mid-cap growth thesis would occur if inflation forced the Fed to tighten despite political pressure.
• A significant deterioration in US-China relations could impair the ~28% Greater China allocation.
• A Bitcoin collapse would materially impact the Riot Platform's position.
• Pipeline failures at Exelixis or setbacks at TransMedics would hamper healthcare exposure.

These are monitored risks rather than base case expectations, but they define the boundaries of conviction.

Risks and Suitability

This strategy carries higher risks than diversified or team-managed approaches. The concentrated, single-manager structure results in significant tracking error compared to the benchmark. Monthly volatility can be substantial, as the June-September period demonstrated; the strategy can underperform materially during defensive market rotations or when conviction is diluted.

• Single-manager risk: All decisions are made by one person. Judgment errors directly impact returns.
• Concentration risk: Never more than ~15 positions, with top holdings at 10-13% each.
• Geographic risk: ~28% Greater China exposure carries geopolitical, regulatory, and currency risks.
• Sector risk: The heavy weight of technology and healthcare means sensitivity to rate expectations and sector rotation.
• Tracking error: Performance can deviate significantly from benchmarks in either direction.

The strategy is appropriate for investors who prefer conviction-driven active management.

Conviction Summary

The 2026 political configuration, anniversary stakes, Fed transition, and midterm pressures create a stronger safety net for risk assets than fundamentals alone suggest. Mid-cap growth offers the highest beta expression of this political put. China technology provides uncorrelated alpha at compressed valuations. Healthcare offers discount opportunities without binary clinical risk.

The current positioning reflects the macro thesis: own the right equities, in the right regions, with the right structural exposures.