Ariel Focus Fund Jumps 20.76% in Q3 as Letter Flags Mosaic and SLB Pressures

Overview

• The fund outpaced major benchmarks with a 20.76% Q3 gain versus 5.33% for the Russell 1000 Value and 8.12% for the S&P 500.
• Management credits the first Federal Reserve rate cut of 2025, stronger corporate earnings, and broader market participation for the quarter’s backdrop.
• Mosaic was named the largest detractor after an earnings miss, as lower volumes and rising production costs offset higher potash and phosphate prices, even with reported net income rising year over year to $411 million.
• Recent Mosaic indicators showed a one-month return of -13.90%, a Nov. 11 close at $25.71, and 54 hedge fund holders at Q2 quarter-end, up from 48.
• SLB traded lower on OPEC+ supply increases and geopolitical uncertainty that pressured oil prices and upstream spending, with softness in Reservoir Performance and Well Construction partly offset by Digital and Production Systems; the stock closed Nov. 12 at $36.07 with a one-month return of 9.57% and was held by 63 hedge fund portfolios at Q2 quarter-end, down from 68.