In the third quarter, we made several adjustments to our core portfolio to better align with our long-term growth and innovation themes.

We increased our position in NVIDIA (tkr: NVDA) to bring our weighting in Technology closer to that of the S&P 500. NVIDIA remains the dominant force in AI hardware, powering nearly every major data center and cloud AI initiative globally. Its growth trajectory remains compelling, supported by superior financial results, expanding margins, a strong demand pipeline, and continued product leadership.

We exited our position in Medtronic (tkr: MDT) to reallocate toward faster-growing opportunities in the medical technology and robotics space. While Medtronic offers an attractive dividend, it continues to face challenges reigniting growth despite spinning off slower-growth segments such as its diabetes unit. Additionally, roughly half of MDT’s revenue comes from outside the U.S., and its Ireland domicile for tax purposes has drawn scrutiny in recent years. This shift allowed us to initiate positions in Boston Scientific (tkr: BSX) and Intuitive Surgical (tkr: ISRG), which bothoffer strong growth potential supported by innovative product pipelines.

Boston Scientific enhances our positioning in cardiology and minimally invasive treatments, segments supported by powerful secular trends and an aging population. The company’s robust pipeline and consistent revenue growth justify its valuation premium. BSX also has exposure to endoscopic bariatric procedures, an emerging alternative to GLP-1 medications for weight loss. These minimally invasive outpatient procedures could offer a cost-effective, one-time solution relative to ongoing pharmaceutical treatments.

Intuitive Surgical, a global leader in robotic-assisted surgery, operates on a razor-and-blade model with a large and growing installed base that drives recurring revenue through instruments and accessories. The company remains the clear leader in surgical robotics, with further growth ahead as it rolls out the next-generation robotic surgical system, Da Vinci 5. While ISRG trades at a premium valuation, we believe its leadership, innovation, and exposure to long-term secular growth trends in robotics justify that premium.

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