Brown Brothers Harriman, an investment management company, released its Q4 2025 investor letter for the BBH Select Series – Mid Cap ETF. A copy of the letter is available for download here. In the quarter, the ETF decreased by 3.9% on a total return basis compared to the Russell Midcap Index’s 0.2% return. The year was characterized by the outperformance of unprofitable and highly volatile companies. Healthcare and materials were the top-performing sectors in the fourth quarter, while communication services and real estate were down. The firm is confident that the market will eventually return its focus to financial fundamentals, such as profitability and cash flow. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, BBH Select Series – Mid Cap Fund highlighted stocks like Guidewire 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 21.87% return in the past month, and its shares 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 stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its fourth quarter 2025 investor letter:
“The Fund’s largest 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 increased negative sentiment for payments and software sectors, respectively. Guidewire declined -12.6% during the quarter, ending with a weight of 5.5%. Guidewire is the leading provider of core systems software to the property and casualty (P&C) insurance industry. Guidewire reported another strong quarter with annual 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 starting to report the metric in 2020, highlighting the sustained drivers of demand. Subscription revenue growth of +36% delivered 82% incremental margins as Guidewire continues to demonstrate excellent cost efficiency as well. Full-year guidance was raised for all metrics, while Guidewire also introduced two new modules in PricingCenter and UnderwritingCenter, which will further increase the opportunity set for customers. The company’s Investor Day and User Conference mid-fourth quarter reinforced Guidewire’s industry leadership and attractive opportunity in the years ahead. Notwithstanding these strong fundamentals, the software sector was broadly out of favor on concerns that AI will commoditize software coding and lower barriers to entry for enterprise software. This is difficult to disprove in the short term, but our view is that, as a market-leading incumbent with deep vertical domain expertise, Guide wire will be a beneficiary of AI as it drives increased adoption of its cloud-based core systems software, lowers internal development costs, and facilitates faster incremental product introductions.”
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