WEC Energy Group Inc

We believe WEC Energy Group (WEC) should benefit from stable and visible earnings growth from attractive service areas with favorable regulatory oversight. Our build-up in exposure to Utilities in the last year aided relative performance in the quarter, indicating our confidence in the sector's resilience and growth potential.

Throughout the year, the Fund maintained a disciplined approach to balancing risk and return, selectively adding to high quality businesses when valuations became compelling. We believe additions such as WEC Energy enhanced long term positioning.

WEC Energy rose, supported by AI-related energy demand driving investments for load growth combined with consistent operational execution. The company is benefiting from the increasing energy needs associated with the surge in AI, which is leading to greater investments in infrastructure to meet this demand. This operational execution positions WEC Energy favorably in the current market environment, suggesting a positive outlook for its performance.

The Fund initiated a new position in WEC Energy Group earlier this year for two reasons: First, WEC operates in a stable service area with one of the most balanced regulatory environments for a utility. Second, their Wisconsin service territory is seeing considerable investment in AI-related data centers which should provide a tailwind to rate base growth as well as long-term earnings growth.

During the quarter, the Fund started a new position in WEC Energy Group (WEC). WEC, a public utility headquartered in Wisconsin, operates in one of the most balanced regulatory environments for a utility and its stable service area led us to add the name early in the quarter. Additionally, the Fund is overweight equities, and WEC provides a quasi-fixed income holding in utilities, by which we mean the utility has a limited return profile within its regulatorily defined returns.