Donald Smith & Co., Inc. Portfolio Q2'2025: Top Holdings & Recent Changes
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Donald Smith & Co., Inc. continues to exemplify disciplined value investing, navigating a complex market with a portfolio that blends long-term conviction with tactical adjustments. Their Q2 2025 portfolio—valued at $4.25 billion—reflects a measured approach, with 61 positions and a top 10 concentration of 44.1%. The firm’s average holding period of 20 quarters and modest 14.8% turnover signal a patient, research-driven strategy, even as they actively manage risk and opportunity across sectors. Recent moves include notable reductions in gold miners and financials, balanced by selective additions in homebuilders and specialty insurers, underscoring a focus on intrinsic value and margin of safety.
Portfolio Overview: Value Discipline Meets Selective Opportunism
Portfolio Highlights (Q2 2025): - Market Value: $4,248.4 million - Top 10 Holdings: 44.1% of portfolio - Portfolio Size: 61 positions (+3 from prior quarter) - Average Holding Period: 20 quarters (5 years) - Turnover: 14.8%
Donald Smith & Co.’s portfolio is neither hyper-concentrated nor overly diversified—a hallmark of the firm’s “best ideas” approach. The top 10 positions account for less than half the portfolio, allowing for meaningful stakes in high-conviction names while maintaining risk management through breadth. The low turnover and long average holding period reflect a willingness to let winners compound, but the firm is not afraid to trim or exit positions as valuations shift or fundamentals deteriorate. This quarter, the portfolio saw net additions, suggesting Smith is finding new opportunities even as he pares back in areas of perceived excess.
Holdings Overview: Gold, Financials, and Homebuilders in Focus
The portfolio’s largest holding remains undisclosed in the top 10 data, but the next-largest position, AerCap Holdings N.V. (AER), saw a 4.96% reduction, now representing 8.6% of the portfolio. Eldorado Gold Corporation (EGO), a core gold mining bet, was cut sharply by 16.10%, dropping to 5.0% of assets. GENWORTH FINANCIAL INC. and IAMGOLD Corporation (IAG) also saw reductions of 3.38% and 6.48%, respectively, as Smith took profits or reduced exposure to financials and gold miners amid shifting macro conditions.
On the buy side, M/I Homes, Inc. (MHO) received a 9.78% boost, now accounting for 3.7% of the portfolio—a notable move into homebuilding as housing markets show resilience. EQUINOX GOLD CORP and JACKSON FINANCIAL INC. were also added to, with increases of 11.08% and 1.98%, respectively, suggesting Smith sees value in select gold equities and financial services. COREBRIDGE FINANCIAL INC. saw a modest 1.81% addition, while UNUM GROUP was trimmed by 6.83%. Further down the list, SIRIUSPOINT LTD. was reduced by 11.88%, reflecting ongoing portfolio optimization.
This mix of reductions and additions paints a picture of a value investor actively managing risk, taking profits where valuations have run ahead, and redeploying capital into sectors and companies where margins of safety remain attractive.
What the Portfolio Reveals
- Value Orientation: Smith’s portfolio remains anchored in traditional value sectors—financials, insurance, and commodities—but is not static. The firm is willing to reduce exposure when valuations become stretched, as seen in gold miners this quarter.
- Sector Rotation: The addition to homebuilders (M/I Homes) and select financials signals a belief in the durability of the U.S. housing market and the potential for mean reversion in undervalued financial services names.
- Risk Management: The portfolio’s structure—moderate concentration, long holding periods, and active trimming—demonstrates a balance between conviction and prudence.
- Opportunistic Moves: Smith is finding new ideas even in a mature bull market, adding positions where he sees asymmetric risk/reward.
Portfolio Concentration Analysis
| Position | Value | % of Portfolio | Recent Change |
|---|---|---|---|
| AerCap Holdings N.V. | $366.6M | 8.6% | Reduce 4.96% |
| Eldorado Gold Corporation | $213.2M | 5.0% | Reduce 16.10% |
| GENWORTH FINANCIAL INC. | $203.8M | 4.8% | Reduce 3.38% |
| IAMGOLD Corporation | $198.0M | 4.7% | Reduce 6.48% |
| M/I Homes, Inc. | $157.9M | 3.7% | Add 9.78% |
| EQUINOX GOLD CORP | $152.4M | 3.6% | Add 11.08% |
| JACKSON FINANCIAL INC | $150.9M | 3.6% | Add 1.98% |
| UNUM GROUP | $145.8M | 3.4% | Reduce 6.83% |
| COREBRIDGE FINANCIAL INC | $145.0M | 3.4% | Add 1.81% |
The top 10 holdings are a mix of financial services, gold miners, and homebuilders, with no single position dominating the portfolio. This balanced approach allows for meaningful stakes in high-conviction ideas without excessive concentration risk. The recent reductions in gold miners and financials, paired with additions in homebuilders and select insurers, reflect a dynamic response to changing market conditions while staying true to a value discipline.
Investment Lessons from Donald Smith & Co.
- Patience Pays: With an average holding period of 20 quarters, Smith demonstrates that letting winners compound is a key driver of long-term returns.
- Active Risk Management: Even with a value bias, Smith is not afraid to trim positions when valuations become stretched or fundamentals deteriorate.
- Sector Agnosticism: The portfolio spans financials, commodities, and housing, showing that value can be found across industries when priced appropriately.
- Portfolio Construction Matters: Moderate concentration and a willingness to add new ideas help balance risk and reward, even in a mature market cycle.
- Margin of Safety: Additions to homebuilders and select financials suggest Smith is finding new opportunities where the market is underestimating durability or overestimating risk.
Looking Ahead: What Comes Next?
With a portfolio turnover of just 14.8%, Donald Smith & Co. is likely to remain patient with core holdings but will continue to seek out new ideas where valuations are compelling. The firm’s cash position (not detailed in the top 10) and ongoing portfolio adjustments suggest readiness to act if market volatility creates fresh opportunities. Housing and select financials appear to be areas of current interest, while gold miners face ongoing scrutiny. Investors tracking Smith’s moves should watch for further additions in sectors trading below intrinsic value, as well as any signs of broader sector rotation.
FAQ about Donald Smith & Co. Portfolio
Q: How often does Donald Smith & Co. update its portfolio?
A: Like all U.S. investment managers with over $100 million in assets, Donald Smith & Co. files a 13F report quarterly, disclosing holdings as of the end of each quarter. These filings are made public 45 days after quarter-end.
Q: What is the firm’s investment philosophy?
A: Donald Smith & Co. is a value-oriented investment firm, seeking undervalued companies with strong balance sheets and sustainable competitive advantages. The firm is known for its patient, research-driven approach and willingness to hold positions for multiple years.
Q: How concentrated is the portfolio?
A: The top 10 holdings account for 44.1% of the portfolio, reflecting a balanced approach between conviction and diversification. No single position dominates, but the firm is willing to take meaningful stakes in its best ideas.
Q: What sectors is Smith focused on now?
A: The portfolio has significant exposure to financials, insurance, gold miners, and homebuilders. Recent moves suggest a rotation into housing and select financials, with reductions in gold miners.
Q: How can I track Donald Smith & Co.’s portfolio changes?
A: ValueSense provides up-to-date analysis of Donald Smith & Co.’s portfolio, including detailed position changes, sector allocations, and intrinsic value metrics. Visit the Donald Smith & Co. superinvestor page for the latest insights.
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