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In the final quarter of 2025, Aristotle Funds' Core Equity Fund witnessed notable gains, largely attributed to the robust performance of General Motors (GM). The U.S. stock market experienced a surge, with the S&P 500 Index climbing by 2.66%, while the Bloomberg U.S. Aggregate Bond Index also saw an increase. Within this dynamic market, healthcare, communication services, and financial sectors led the Russell 1000 Growth Index, showcasing resilience despite a decline in consumer confidence by year-end, which sparked concerns about future spending and the employment landscape. The Federal Reserve maintained a cautious stance amidst varied economic indicators and data uncertainties, as artificial intelligence continued to be a dominant market theme. The Aristotle Core Equity Fund (Class I-2) surpassed the S&P 500 Index, achieving a 3.15% return, thanks to effective allocation strategies and astute security selection.

General Motors' contribution to this success stemmed from its adept management of tariff expenses, which proved more effective than initially projected in early 2025. Furthermore, the potential cessation of tax credits for electric vehicles could steer consumer demand back towards internal combustion engine vehicles, a segment where GM enjoys higher profitability. This strategic advantage, coupled with the company's strong market capitalization of $75.366 billion, underscored its financial health. Despite a recent monthly dip of -3.82%, GM's shares had seen an impressive 64.44% increase over the preceding 52 weeks, closing at $80.79 per share on February 26, 2026. While GM is a significant player, it does not feature in the top 30 most popular stocks among hedge funds, as per available data, which indicated 81 hedge fund portfolios held GM at the close of Q4, an increase from the previous quarter's 71.

While General Motors presents a compelling investment opportunity, especially with its strategic adaptability and strong market presence, the broader investment landscape suggests exploring emergent sectors. Specifically, certain AI stocks are believed to offer more substantial upside potential with reduced downside risk. The automotive industry is undergoing a significant transformation, with electric vehicles and autonomous driving technologies at the forefront. Companies like GM, by skillfully navigating market shifts and technological advancements, exemplify how established enterprises can maintain their relevance and profitability. Their ability to adapt to changing consumer preferences and regulatory environments is crucial for sustained growth and positive societal impact.