Brown Advisory, an investment management company, released its “Brown Large-Cap Growth Strategy” for the first-quarter 2026 investor letter. A copy of the letter is available to download here. The Brown Advisory Large-Cap Growth Strategy experienced a decline in the first quarter of 2026, modestly trailing the Russell 1000 Growth Index. Despite negative absolute returns amidst volatility, relative performance improved significantly as the quarter progressed. Initial pressures stemmed from weaknesses in the software sector, affected by concerns over AI disrupting traditional models. Conversely, sectors like Industrials and Consumer Discretionary positively contributed to performance, while Information Technology and Health Care were the largest detractors. The strategy’s ability to outperform in a down market indicates the quality of holdings. As market leadership broadens, the firm’s focus remains on maintaining a diversified portfolio of high-quality growth companies, aiming for strong long-term results. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Brown Advisory Large-Cap Growth Strategy highlighted Veralto Corporation (NYSE:VLTO). Veralto Corporation (NYSE:VLTO) is an industrial technology company specializing in water analytics, water treatment, marking and coding, and packaging and color solutions. On July 2, 2026, Veralto Corporation (NYSE:VLTO) closed at $92.55 per share, reflecting a market capitalization of $22.73 billion. Veralto Corporation (NYSE:VLTO) posted a one-month return of 7.55%, while its shares lost 10.80% over the past 52 weeks.
Brown Advisory Large-Cap Growth Strategy stated the following regarding Veralto Corporation (NYSE:VLTO) in its Q1 2026 investor letter:
“We exited Veralto Corporation (NYSE:VLTO) as we saw more limited near-term growth and visibility relative to other areas of the portfolio. While the company operates in attractive end markets and continues to execute well, the path to accelerating growth is increasingly dependent on capital deployment, which has yet to be demonstrated at scale, leading us to exit the position.”
Veralto Corporation (NYSE:VLTO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 57 hedge fund portfolios held Veralto Corporation (NYSE:VLTO) at the end of the first quarter, up from 55 in the previous quarter. While we acknowledge the risk and potential of Veralto Corporation (NYSE:VLTO) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Veralto Corporation (NYSE:VLTO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Veralto Corporation (NYSE:VLTO) and shared the list of best water infrastructure stocks to buy as AI data centers strain resources. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
