Brown Brothers Harriman, an investment management firm, has issued a Q4 2025 investor letter for the BBH Selection Series – Mid-Cap ETF. A copy of the letter is available for download here. In the quarter, the ETF lost 3.9% on a total return basis, compared to a 0.2% return for the Russell Midcap Index. The year was characterized by the best performance of unprofitable and highly volatile companies. Healthcare and commodities were the top-performing sectors in the fourth quarter, while telecommunications services and real estate were lower. The company is confident that the market will eventually shift its focus to financial fundamentals, such as profitability and cash flow. Please review the fund’s top five holdings for 2025 to gain insight into their key picks.
In a Q4 2025 investor letter, BBH Select Series – mid-cap fund stocks such as Guidance Software, Inc. (NYSE:GWRE). Guidewire Software Inc. (NYSE:GWRE) is a leading provider of cloud-based software for property and casualty (P&C) insurance companies. On March 10, 2026, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $158.93 per share. Guidewire Software Inc. (NYSE:GWRE) delivered a return of 21.87% over the past month, and its shares have lost 9.90% over the past twelve months. Guidewire Software Inc. (NYSE:GWRE) has a market capitalization of $13.45 billion.
BBH Select Series – Mid-Cap Fund Guidance Software, Inc. (NYSE:GWRE) said the following in its fourth quarter 2025 investor letter:
“The biggest fund detractors to performance in the quarter were Shift4 Payments Inc. (Shift4), and Guidewire Software, Inc. (NYSE:GWRE). Both had strong fundamental performance but declined on increasing negative sentiment for the payments and software sectors, respectively. Guidance decreased -12.6% during the quarter, ending with a weight of 5.5%. Guidewire is a leading provider of core systems software to the property and casualty (P&C) insurance industry. Guidewire reported another strong quarter with annualized recurring revenue (ARR), revenue, and operating income all above guidance and expectations. ARR growth accelerated to +21% in constant currency, the company’s fastest growth since the metric began reporting in 2020, indicating continued demand drivers. Subscription revenue growth of +36% delivered incremental margins of 82% as the guide continued to demonstrate superior cost efficiencies. Full-year guidance for all metrics has been raised, while Guidewire has also introduced two new modules in the Pricing Center and the Underwriting Center, which will further increase the opportunity set for clients. The company’s investor day and user conference in the middle of the fourth quarter reinforced Guidewire’s industry leadership and exciting opportunity in the coming years. Despite these strong fundamentals, the software sector was largely out of favor over concerns that AI would reduce software coding and lower barriers to entry for enterprise software. It’s hard to deny in the short term, but our view is that as a market leader with deep vertical domain expertise, Guidewire will benefit from AI as it leverages its cloud-based core systems software, reduces internal development costs, and facilitates rapid incremental product introductions.
