Housing

One area is the US senior housing market, which encompasses a wide spectrum of real estate categories catering to later life.

China continues to battle headwinds, with the housing market its biggest challenge.

Kaufman & Broad slipped on a soft French housing market, and LSEG fell on renewed concerns that AI could disintermediate parts of its Data & Analytics business as clients increasingly access information through AI-enabled tools rather than traditional workflow products.

Lower rates would likely support higher real estate valuations, stimulate housing market activity, and accelerate M&A, further underscoring the relative attractiveness of public real estate.

Top 5 Businesses We Own Builders FirstSource (BLDR) BLDR appreciated approximately 9% during the second quarter but remains down roughly 13% year-to-date amid continued weakness in the housing market.

Berkshire Hathaway, for instance, recently acquired public homebuilder Taylor Morrison at 1.1X book value, and the Japanese conglomerate Sumitomo acquired Tri Pointe Homes for 1.2X book value.

QXO (QXO) shares underperformed during the period as investors remained focused on near-term macroeconomic headwinds, including a sluggish U.S. housing market and persistently elevated interest rates, which continued to pressure residential construction activity and sentiment across the building products sector.

In addition to the fear of losing their jobs, consumers are faced with higher inflation and mortgage rates, which has driven confidence to all-time lows.

Our positions in Irish homebuilders, Cairn Homes and Glenveagh Properties also delivered strong performance during the quarter.

China continues to battle headwinds, with the housing market probably the biggest challenge.

This bullish outlook on the multi-year investment cycle of homebuilding was recently validated by Warren Buffett's Berkshire Hathaway, which announced an $8.5 billion acquisition of national homebuilder Taylor Morrison in late May 2026.

Compass, Inc. (“Compass”) is a technology enabled residential real estate brokerage focused on the luxury and upper-middle segments of the U.S. housing market.

That said, certain company specific items impacted performance, including at Lennar Corp.—a leading U.S. homebuilder that has pivoted to be more “land light” and “production focused” in recent years.

Fair Isaac Corporation (FICO) was a detractor during the quarter as mortgage rates moved back above 6% and the credit bureaus introduced lower-priced alternatives to the traditional FICO score.

Shares of Fair Isaac (FICO) fell approximately 35% in the quarter, with most of the weakness occurring in March as mortgage rates moved back above 6%.

Similar disparities exist across the Fund’s residential, data center, and homebuilder segments.