In a challenging market environment, The Ithaka Group’s portfolio underperformed the Russell 1000 Growth Index during the first quarter of 2026, posting a return of -15.5% compared to the benchmark’s -9.8%, gross of fees. This resulted in a relative underperformance of 570 basis points, primarily driven by stock selection, which detracted 540 basis points.
Technology Sector Drives Underperformance
Technology emerged as the primary source of underperformance, with widespread weakness across holdings. Among the 17 positions maintained throughout the quarter, only five outperformed the benchmark.
Key Contributors and Detractors
Howmet Aerospace shares rose sharply in the quarter following a robust February earnings report that exceeded analyst expectations on both revenue and earnings.
Netflix intends to deploy proceeds from funds raised in anticipation of a potential merger, along with a $2.8 billion breakup fee from Paramount, toward share repurchases.
Microsoft shares lagged due to investor concerns over substantial capital expenditures for AI infrastructure and uncertainty surrounding short-term returns on these investments.
