TCW Funds, an investment management firm, published its second-quarter 2026 investor letter for the 'TCW Concentrated Large Cap Growth Fund.' A copy of the letter can be downloaded here. During the second quarter, AI monetization, a fragile Middle East ceasefire, and a Federal Reserve leadership transition were the significant events. All major indices ended higher, driven by resilient economic growth and strong corporate earnings.
April marked a recovery from March lows, with the S&P 500 achieving record highs by early June, largely due to robust corporate earnings linked to AI capital spending. Although the fund appreciated 14.45% in the quarter, it trailed the Russell 1000® Growth Index's 16.74% and the S&P 500's 15.20% returns. Holdings in healthcare and financials hurt relative results most, while information technology and consumer discretionary holdings positively impacted relative performance during the quarter.
Please review the Fund's top five holdings to gain insights into their key selections for 2026. In its Q2 2026 investor letter, TCW Concentrated Large Cap Growth Fund highlighted Intuitive Surgical, Inc. (NASDAQ:ISRG). Intuitive Surgical, Inc. (NASDAQ:ISRG) is a leader in robotic-assisted surgery that develops, manufactures, and markets products for improving the quality of and access to minimally invasive care.
On July 20, 2026, Intuitive Surgical, Inc. (NASDAQ:ISRG) closed at $401.27 per share. The one-month return of Intuitive Surgical, Inc. (NASDAQ:ISRG) was -0.77%, and its shares lost 16.32% over the past 52 weeks. Intuitive Surgical, Inc. (NASDAQ:ISRG) has a market capitalization of $125.08 billion.
TCW Concentrated Large Cap Growth Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q2 2026 investor letter: "In the healthcare sector, shares of Intuitive Surgical, Inc. (NASDAQ:ISRG) moved lower despite releasing solid quarterly results. Revenue and Da Vinci procedure growth topped consensus estimates, but China and Japan system placements continue to disappoint, however. ISRG repurchased 2.3M shares of its common stock (for $1.1B) in 1Q26 and management raised 2026 guidance.
Shares have been challenged YTD due to increasing negative investor sentiment in healthcare medtech stocks, as well as the fact that ISRG is a high growth, high multiple security. We note that we are still relatively early in the launch of Da Vinci 5, which we believe will drive further penetration (both into new hospitals and into new procedure categories) and further establish ISRG's lead in robotic-assisted surgery. ISRG has a 20-year lead on competitors, a strong competitive moat, and we remain constructive on shares." Intuitive Surgical, Inc. (NASDAQ:ISRG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.
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