Here's Why SGA U.S. LCG Liquidated Its Position in Aon plc (AON)

Sustainable Growth Advisers (SGA), an investment management company, released its second-quarter 2026 investor letter for its 'U.S. Large Cap Growth Strategy.' The letter can be downloaded here. SGA focuses on building high-conviction portfolios of quality growth businesses expected to achieve mid-teens earnings growth with less variability. Their investment strategy aims to protect and compound client capital. In Q2, the SGA U.S. LCG Portfolio returned 6.8% (Gross) and 6.6% (Net), underperforming the Russell 1000 Growth Index's 16.7% return and the S&P 500 Index's 15.2% return. The underperformance was driven by momentum market dynamics and the disparity between AI CapEx beneficiaries and other market segments. The firm remains confident in the portfolio's fundamental resilience and downside protection during market dips and is poised for a shift in market leadership dynamics, with projected revenue growth of 14% and earnings growth of 19% over the next three years. The portfolio valuations are at favorable levels, suggesting strong potential for future performance. Also, check the fund's top five holdings to see its best picks in 2026. In its second-quarter 2026 investor letter, SGA U.S. Large Cap Growth Strategy highlighted Aon plc (NYSE:AON). Aon plc (NYSE:AON), a professional services firm providing risk management, insurance brokerage, and human capital consulting solutions to organizations, was liquidated from the Strategy's holdings during the quarter. On September 04, 2026, Aon plc (NYSE:AON) closed at $323.09 per share. Over the past month, Aon plc (NYSE:AON) declined 9.49%, and its shares lost 12.68% over the past 52 weeks. Aon plc (NYSE:AON) has a market capitalization of $68.54 billion. SGA U.S. Large Cap Growth Strategy stated the following regarding Aon plc (NYSE:AON) in its Q2 2026 investor letter: 'We liquidated our position in Aon plc (NYSE:AON) during the quarter. Aon continues to execute well operationally and has outperformed peers during a period of softer insurance pricing. The backdrop has become less favorable as the insurance industry entered a softer phase following several years of strong property insurance pricing driven by inflation and elevated catastrophe losses. As pricing has moderated, revenue growth across the brokerage industry has come under pressure, creating a headwind for firms whose revenues are tied to insurance premiums. Although Aon has navigated this environment better than competitors and we continue to view the underlying business as high-quality and resilient, we exited the position and reallocated the funds to a more attractive long-term growth opportunity in Arista Networks.' Aon plc (NYSE:AON) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 61 hedge fund portfolios held Aon plc (NYSE:AON) at the end of the second quarter, compared to 65 in the previous quarter. While we acknowledge the potential of Aon plc (NYSE:AON) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we discussed Aon plc (NYSE:AON) and noted that it is set to acquire USI Insurance Services from KKR and other shareholders for $17 billion in cash. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. This article is originally published at Insider Monkey.