Sustainable Growth Advisers (SGA), an investment management company, released its third-quarter investor letter for its “Global Growth Strategy.” A copy of the letter can be downloaded here. The portfolio returned -2.3% (Gross) and -2.5% (Net) in the third quarter, compared to a 7.6% return for the MSCI ACWI and a 9.0% return for the MSCI ACWI Growth. The index returns were fueled by enthusiasm for AI, whereas factors aligned with SGA’s strategy, like quality and sales stability, lagged. SGA’s investment objective is to invest in high-quality growth businesses expected to achieve consistent mid-teens earnings growth, accompanied by stable revenue and cash flow. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, SGA Global Growth Strategy highlighted stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 5.88%, and its shares gained 45.27% over the last 52 weeks. On January 2, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $319.61 per share, with a market capitalization of $1.658 trillion.
SGA Global Growth Strategy stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third quarter 2025 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was a contributor to portfolio performance in Q3. Management raised fiscal year 2025 guidance to 30% revenue growth year-over-year, supported by robust demand for advanced semiconductor manufacturing and strong execution across its diversified business mix. The company’s technology and manufacturing leadership at leading-edge nodes enables it to maintain pricing power and deliver high margins, with recent results exceeding expectations due to Taiwan dollar appreciation and U.S. openings. As it stands today, TSMC is the sole provider for all leading-edge AI and smartphone manufacturing and this position continues to strengthen with Intel’s pull back as subsequent advancement is only iterative unless disrupted by quantum computing. The lack of competition also allows the company to maintain good margins despite heavy investments in geographical diversification.
The company’s recent steps to diversify leading-edge production into Japan, Germany, and the U.S. provide a meaningful hedge and reinforce its importance to global supply chains. TSMC remains well positioned to deliver double-digit revenue and earnings growth over the coming years. We maintained an average weight position, trimming on strength.”
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 194 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the third quarter, compared to 187 in the previous quarter. In the third quarter of 2025, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) revenue increased 6% sequentially in NT. While we acknowledge the risk and potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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 Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of best stocks for the next decade. In addition, please check out our hedge fund investor letters Q3 2025 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.
