Many investors and financial advisors define risk by how a portfolio looks at a glance. WestEnd takes a different view. In this month’s letter, we explain why we believe risk comes from owning businesses with deteriorating fundamentals and weakening earnings — not simply from owning a more focused portfolio. We also show how rising earnings estimates, active monitoring, and decisive action in changing market environments help shape how we manage portfolio risk.

Q1 2026 earnings season offered a useful stress test for WestEnd’s Core portfolio, and the results were broadly encouraging. Across 29 Core holdings analyzed, 25 beat EPS estimates, 26 beat revenue estimates, and 24 beat on both metrics, while management commentary continued to reinforce themes such as energy resilience, infrastructure buildout, industrial demand, and AI-related physical investment. This monthly letter also highlights Fluor as an example of active risk management when a holding no longer offers the same near-term risk/reward.

Despite tariff pressures and global uncertainty, the U.S. and world economy continue to show resilience—and that strength is fueling better-than-expected corporate earnings.