Q2 2025 LP Letter

Dear Partner,

In Q2 2025, the NJC Horizon Fund gained 24.0%, bringing year-to-date performance to 11.7% net of all fees. This represents relative year-to-date outperformance of 62% compared to the Nasdaq 100 (QQQ +7.3%) and 143% compared to the S&P 500 (SPY +4.8%), underscoring our ability to navigate volatility and capitalize on opportunities where others saw only risk.

Strategic Positioning During Trade Volatility

We capitalized on market dislocations following the announcement, and subsequent deferral of, unexpectedly aggressive tariffs. During this period, we sold several stable but richly valued holdings we believed were vulnerable to rising trade risks. This included the full liquidation of our large position in John Deere, where we expected international demand for U.S. agricultural products and machinery to face sharp retaliatory pressures.

Proceeds were redeployed into a set of long-held, high-conviction names largely insulated from trade tensions, including Mercado Libre, Atlassian, The Trade Desk, Snowflake, Intuitive Surgical, and Vertex Pharmaceuticals. We also increased our position in Taiwan Semiconductor despite its exposure to trade dynamics, as insatiable demand for its products grants it ample pricing power to offset potential headwinds.

Emerging Opportunities in eVTOL

We also expanded our holdings in eVTOL (Electric Vertical Take-off and Landing) companies Joby Aviation and Archer Aviation, bringing total exposure to roughly 2% of the portfolio. Both recently secured contracts to begin operations in the United Arab Emirates and are nearing the final stages of FAA certification. eVTOL aircraft—essentially large drones capable of carrying passengers—offer a safer, quieter alternative to helicopters for short-range air travel. Their simpler mechanics and extensive hardware redundancies position them well for use in air taxi, air ambulance, and logistics services.

While valuations in this sector are frequently stretched, volatility often creates moments of exceptional opportunity. If the technology continues to meet safety expectations, the combination of rising demand, scaling production, and easing regulatory hurdles suggests the industry is approaching an inflection point. We remain alert to opportunities to significantly expand our positions as this market evolves.

Outlook: Opportunities and Risks

As we look to the months ahead, we remain focused on opportunities where innovation, competitive advantage, and favorable market dynamics align. At the same time, we are mindful of several headwinds, including elevated policy uncertainty and valuations that remain rich across many sectors.

Periods of volatility are likely to persist, but we continue to view them as fertile ground for disciplined, long-term investors. Our strategy remains anchored in owning exceptional businesses at attractive valuations and taking advantage of short-term dislocations when they arise.

Thank you, as always, for your trust and partnership as we navigate the remainder of the year.

-Nick Carpenter
Manager, NJC Horizon Fund, LLP