Aristotle Growth Equity Fund Exited UnitedHealth Group (UNH) Due to Lowered Guidance

Aristotle Funds, an investment advisor, released its “Growth Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10%. Within the Russell 1000 Growth Index, healthcare, communication services, and financials were the top-performing sectors, while utilities, real estate, and materials lagged. The U.S. economy showed resilience. However, consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market. Against this backdrop, the Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index’s 1.12%. Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Aristotle Growth Equity Fund highlighted stocks like UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a multinational health benefits company based in Eden Prairie, Minnesota. On February 25, 2026, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $284.20 per share. One-month return of UnitedHealth Group Incorporated (NYSE:UNH) was -2.77%, and its shares lost 39.35% over the past 52 weeks. UnitedHealth Group Incorporated (NYSE:UNH) has a market capitalization of $257.439 billion.

Aristotle Growth Equity Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its fourth quarter 2025 investor letter:

"We sold UnitedHealth Group Incorporated (NYSE:UNH) as the company lowered guidance on several occasions last year and they have seen increased utilization and acuity across many of their insured business lines resulting in a higher-than-expected medical cost ratio and thus lowered earnings. The CEO was replaced by the former CEO, and the CFO was recently replaced as well. The shares have bounced back considerably, rising over 50% from the early August lows. We believe it could take several years for UnitedHealth Groups’ earnings to return to prior year levels. The stock is now trading at a premium multiple, despite solid evidence of a recovery in earnings."

UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 145 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the fourth quarter, up from 140 in the previous quarter. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared a list of best Warren Buffett dividend stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.