In his Q2 2025 commentary for the Ariel Appreciation Fund, John Rogers outlines a strategy rooted in long-term conviction and an ability to tune out macro noise. “It’s impossible to control tariff policies, global trade negotiations and/or how geopolitics may reverberate across the economic landscape,” Rogers writes. “As such, in times like these, we remain measured, deliberate and actively patient—with a willingness to take advantage of volatility with an eye towards long-term gains.”
That mindset proved useful during a volatile quarter. After “Liberation Day” tariffs spooked markets in April, stocks rebounded sharply thanks to strong corporate earnings and renewed enthusiasm for AI. Ariel Appreciation Fund returned +5.81% for the quarter, slightly ahead of its value benchmark but behind the broader Russell Midcap Index.
Rogers emphasizes Ariel’s bottom-up stock picking, explaining that “our current pro-cyclical positioning reflects our bottom-up conviction in undervalued businesses rather than macroeconomic prognostication.” That meant holding—and in some cases adding to—names that the team believes are fundamentally sound, even when sentiment has turned.
Take Sphere Entertainment, for example. The stock traded higher after an earnings beat. Rogers believes there’s more to come: “We expect financial results will continue to ramp as Sphere debuts its next fully immersive experience, The Wizard of Oz… Advertising, sponsorship and suite revenue should provide further upside.” The team also likes the potential for new venues: “Expansion with additional spheres beyond Abu Dhabi remains a priority.”
Another standout was nVent Electric. “Notably, management raised its 2025 organic sales outlook on increasing orders and rising backlog,” Rogers writes, adding that the company is offsetting tariff exposure through “pricing, productivity and supply chain strategies.”
On the other end, Core Labs and Schlumberger underperformed due to oil price weakness and global uncertainty. Yet Rogers sees opportunity: “We think SLB is the best positioned among the oilfield services companies… In the long run, we expect SLB will continue to evolve their capabilities to help clients with rising energy needs going forward.”
Ariel also took advantage of market dislocations to add two new names. Fiserv came in after a pullback: “In our view, FI offers a rare opportunity to own a best-in-class financial technology business.” Goldman Sachs was repurchased after dropping back into midcap territory: “In our view, GS has one of the strongest investment banking franchises on Wall Street.”
You can read the entire letter here:
Q2 2025 Ariel Appreciation Fund Letter
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