Here’s Why Aristotle International Equity Fund Exited Unilever (UL)

The Aristotle International Equity Fund, managed by Aristotle Capital Management, LLC, reported on its Q2 2026 investment performance and strategy in its investor letter. Global equity markets experienced a record high, with the MSCI ACWI Index increasing 14.93%, whereas global fixed income saw modest growth of 0.87%. Geopolitical tensions, specifically in the Middle East, impacted energy markets and investor confidence, underscoring market volatility.

Central banks responded differently to inflation, with the ECB raising rates due to stagflation fears, while the Fed and Bank of England kept rates unchanged.

Despite these challenges, strong earnings were observed in Europe and Asia, fueled by demand for AI infrastructure. The Aristotle International Equity Fund (Class I-2) generated an 8.40% return in the quarter, trailing behind the MSCI EAFE Index at 10.82% and the MSCI ACWI ex USA Index at 14.49%. The fund's strategy remains centered on quality investments, acknowledging the complexity of forecasting returns amid geopolitical and macroeconomic uncertainties.

The fund discussed Unilever PLC (NYSE:UL) in its Q2 2026 investor letter. Unilever, a British consumer goods company, operates in food, homecare, beauty, and personal care sectors. As of September 17, 2026, Unilever's stock closed at $62.22 per share, down 2.99% over the past month and 5.09% over the past year. The company boasts a market capitalization of $133.98 billion and traded between $54.75 and $74.98 over the last 52 weeks.

Aristotle International Equity Fund had invested in Unilever since Q2 2013, appreciating its global consumer staples portfolio, strong brand presence, emerging market exposure, and focus on high-growth, higher-margin categories. Over the past decade, Unilever streamlined its portfolio, shedding lower-growth assets, optimizing efficiency, and concentrating on brands like Dove, Knorr, and Axe, while shifting toward growing personal care, food, and home care sectors. Recently, the company spun off its ice cream business and is transforming its food portfolio.

While the fund still sees Unilever as a high-quality investment, it believes the more intriguing opportunity lies in the standalone ice cream business, which has a focused management team and a strategy tailored to the category. Consequently, the fund decided to exit Unilever and reinvest the proceeds in Magnum Ice Cream. Unilever is not among the top 40 most popular stocks among hedge funds.

According to the fund's records, 38 hedge funds held Unilever at the end of Q2 2026, up from 34 the previous quarter. Despite recognizing Unilever's investment potential, the fund thinks certain AI stocks present greater upside and reduced downside risk. For investors interested in AI stocks, the fund recommends a free report on the best short-term AI stock.

Additionally, the fund referenced Brown Advisory Global Leaders Strategy's outlook on Unilever and suggested reading other hedge fund investor letters for more insights.