While the market was less focused on bottom-up fundamentals and more focused on broad factor movements, we believe the portfolio is well positioned for medium-term outcomes and that its fundamental approach will eventually be rewarded. Our research indicates that the major trends that we invest behind remain strong. Nevertheless, we continued to look for areas where we can reduce our exposure to unpaid risk.

Software

We bought shares of companies focused on building innovative solutions to help businesses better manage the growing volume and variety of data and develop collaboration tools to increase efficiencies.

• We bought shares in Snowflake, a cloud data warehousing platform.� We like Snowflake's cloud native architecture, adept management team, and opportunities to penetrate a large and growing market driven by increasing investments in machine learning and artificial intelligence.
• We bought Atlassian, a leading provider workflow and collaboration software for enterprises. In our view, the company epitomizes a new breed of software developers that directly target users in marketing its products, employing a low-cost flywheel approach rather than a traditional top-down sales model. We appreciate the long growth runway of the company as it benefits from the secular tailwinds of digital transformation, cloud migration, and hybrid work.
• At a time when many companies are interested in productivity tools, we bought shares in MongoDB, a document-oriented database solutions company with a sticky client base and fast-growing cloud business. We like the company's growth trajectory as enterprises look for new ways to scale and structure data across on-premises and cloud infrastructures.

Semiconductors

In semiconductors, we sold share of our core holdings and maintained an underweight position. Based on our research, we think this industry is late in its business cycle.

• Seeking to reduce risk, we sold shares in Taiwan Semiconductor Manufacturing, a leading-edge process foundry, to balance risk and reward. We see this firm outgrowing competitors through incremental outsourcing from manufacturers and design houses.

Internet

Seeking to balance risk and reward, we sold share in consumer internet, especially companies facing regulatory risks or increased competition.

• We sold shares of Sea seeking to better match risk and reward. Sea is an internet platform focused on gaming, social media, e-commerce, digital wallet, and digital finance. While we are attracted to Sea's ability to lead secular trends within fast-growing markets, we will monitor how the company evolves its growth strategy to potentially leverage new sources of cash.
• We sold shares of Tencent Holdings, China's largest video game and social media platform, seeking to balance risk and return as the company tries to find ways to regain momentum amid rising competition and ongoing regulatory interventions. We appreciate Tencent's global position, its savvy management team, and its solid basis for long-term growth.

Media & Entertainment

Slowing growth and increased competition caused us to sell certain media and video gaming stocks.

• We expected to see Netflix's strong slate of programming draw in more new subscribers than it did in the fourth quarter. Instead, the company missed subscriber addition estimates and guided for a sub-par first quarter, settling on a lower-than-expected revenue trajectory. We sold it in favor of other opportunities.
• We sold shares in Roblox during the period seeking to better align risk and reward. We are attracted to the powerful social network effects Roblox utilizes in drawing in new active users and creators. This sets up a positive feedback loop and helps the platform widen its moat, expand its addressable market, and potentially deliver durable earnings.

Industrials

Supply chain problems continued to hamper electric vehicle (EV) makers' ability to meet robust demand, with some models requiring months-long delivery wait times. Adding to these woes, the war in Ukraine and associated trade conflicts caused supply shortages and rising prices for the raw materials needed in lithium batteries used to power EVs.

• We sold shares of Tesla seeking to manage our position size. We appreciate that Tesla is the lead disruptor in the electric vehicle market, leveraging its advantages in manufacturing, software, and brand. We expect it to eventually be able to move down the cost curve and unlock new parts of the market while increasing unit margins.