After a 13% Rally, Why One Fund Decided to Walk Away From Wintrust Financial

On January 30, Shaker Investments announced a significant portfolio shift: the complete exit from Wintrust Financial, a regional bank that had gained 13% over the past year. The fund unloaded 26,185 shares in a transaction valued at approximately $3.47 million, marking the end of what was once a notable position in the holdings. This move tells a revealing story about where sophisticated investors are placing their bets in today’s market—and equally important, where they’re not.

A Strategic Retreat Despite Positive Returns

When a fund sells a stock that’s up 13% in a year, it rarely signals weakness in the company itself. Wintrust Financial shares were trading at $147.90 as of late January, and the company continues to execute steadily on its community banking and specialty finance operations. The position represented 1.44% of Shaker Investments’ 13F reportable assets under management. Yet the fund still chose to exit completely.

The reason becomes clearer when you look at what the portfolio is choosing instead. The fund’s top holdings have shifted sharply toward a different breed of financial performer: Axos Financial commands $32.63 million (13.6% of AUM), while Broadcom, Nvidia, Alphabet, and Microsoft collectively dominate the allocation with positions ranging from 4.2% to 5.3% each. This isn’t a vote of no confidence in Wintrust; it’s a statement about relative opportunity.

The Wintrust Story: Solid But Insufficient

Wintrust Financial operates across a diversified platform spanning community banking, specialty finance, and wealth management, primarily serving the Midwest and select Florida markets. The company generated $2.73 billion in revenue and $823.84 million in net income over the trailing twelve months, supported by loan growth and fee-based services. With a dividend yield of 1.35%, it represents the type of dependable regional financial institution that has historically anchored conservative portfolios.

Yet this dependability comes with inherent limitations. Like most regional banks, Wintrust’s profitability is tethered to net interest margin dynamics—the spread between what it earns on loans and what it pays on deposits. In a banking environment where deposit costs have become increasingly competitive and margin compression remains a real concern, growth is fundamentally constrained. The company’s 13% appreciation over one year, while respectable, underperformed the broader S&P 500 by roughly two percentage points, suggesting execution without meaningful multiple expansion.

The Bigger Picture: Scale and Growth Are Winning

The fund’s strategic pivot illuminates a powerful market dynamic: investors are consolidating capital toward businesses with durable competitive advantages, pricing power, and secular growth tailwinds. Over 30% of Shaker Investments’ assets now concentrate in industrials and mega-cap technology—companies where incremental capital compounds faster and market leadership appears more defensible.

Wintrust operates in an environment where regulatory pressures, rising operational costs, and deposit competition create a permanent earnings ceiling. Nvidia, Microsoft, Alphabet, and Broadcom, by contrast, are positioned in markets still in early growth phases, where margin expansion and reinvestment opportunities remain abundant. The choice between them isn’t really a choice at all for a growth-oriented portfolio.

What This Means for Investors

This transaction exemplifies a larger reallocation happening across many sophisticated portfolios: a rotation away from rate-sensitive, regionally-focused financial services toward globally-scaled technology and specialty finance operators. The fact that Wintrust was profitable, paying dividends, and delivering positive returns doesn’t alter the calculus—it simply wasn’t compelling enough relative to alternatives.

For investors considering bank stocks or regional financials, the lesson is straightforward. Strong execution and positive returns may not be sufficient if the structural headwinds facing an entire sector are outpacing the tailwinds fueling faster-growing industries. Wintrust executed well enough to rise 13% in a year. That just wasn’t enough to keep it in a portfolio that could instead allocate to businesses growing at multiples of that rate.