Ariel Investments, an investment management company, released its “Ariel Global Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2025, investors challenged the idea of “American exceptionalism.” After record highs in January, U.S. markets fell due to tariff fears and policy uncertainty, with the Magnificent Seven dropping nearly 15% due to concerns over America’s AI leadership. Meanwhile, international equity markets outperformed the U.S. in their strongest quarterly showing in 15 years. Against this backdrop, the Ariel Global fund traded +6.31% higher in the quarter, compared to the -1.32% return of its primary benchmark, the MSCI ACWI Index, and the +4.77% return of its secondary benchmark, the MSCI ACWI Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Ariel Global Fund highlighted stocks such as Bank of America Corporation (NYSE:BAC). Bank of America Corporation (NYSE:BAC) is a financial institution that offers various financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments. The one-month return of Bank of America Corporation (NYSE:BAC) was -0.63%, and its shares gained 11.05% of their value over the last 52 weeks. On June 16, 2025, Bank of America Corporation (NYSE:BAC) stock closed at $44.41 per share with a market capitalization of $334.491 billion.
Ariel Global Fund stated the following regarding Bank of America Corporation (NYSE:BAC) in its Q1 2025 investor letter:
“We initiated a position in one of the world’s leading financial institutions, Bank of America Corporation (NYSE:BAC). We think the firm’s revenue momentum across its capital markets group is underappreciated at current levels. We also expect the company’s net interest income growth to exceed Wall Street expectations, despite a conservative outlook for loan growth and re-pricing. Meanwhile, a more favorable regulatory landscape, highlighted by a less restrictive capital rule should lead to a substantial increase in share buybacks. Taken together, we view the company’s earnings outlook to be attractive, supported by higher profitability and free cash flow generation amidst an improving operating environment.”
A business owner discussing commercial business loans with a bank representative.
Bank of America Corporation (NYSE:BAC) is in 24th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 117 hedge fund portfolios held Bank of America Corporation (NYSE:BAC) at the end of the first quarter, which was 113 in the previous quarter. While we acknowledge the potential of Bank of America Corporation (NYSE:BAC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Bank of America Corporation (NYSE:BAC) and shared the list of next generation dividend aristocrat stocks. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of BAC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
