Year-End 2024 – Sequoia Fund Letter

Sequoia Fund returned 20.79% in 2024, trailing the S&P 500's 25.02% return. The fund's managers attribute underperformance to the market's extreme concentration: the Magnificent Seven stocks accounted for nearly two-thirds of the S&P 500's 2023 return and half of 2024's return, now comprising over one-third of the index. The managers note this concentration exceeds historical peaks including the dot-com bubble and Nifty Fifty. They argue the market is "far from cheap" and rising at "unsustainable" rates. The fund maintains a company-by-company investment approach, declining to bet on most Magnificent Seven stocks at current prices. Top holdings include Rolls-Royce (8.9%), Intercontinental Exchange (7.8%), and Formula One (7.7%). The fund exited Carmax and Lumine, trimmed Taiwan Semiconductor and SAP after strong gains, and added to Universal Music Group, Charter Communications, and initiated a position in ICON plc.