Portfolio Pivot: How Fund Manager Spotlights Water Scarcity Over Traditional Tech

In a dramatic portfolio repositioning revealed through recent SEC filings, Shepherd Wealth Management executed a comprehensive strategic realignment that signals growing concern over water scarcity and changing investment priorities. The fund’s Q4 2025 moves reveal far more than routine rebalancing—instead pointing toward a bold thesis about resource constraints reshaping the investment landscape.

The Trade That Signals Change: $10 Million Exit from Regional Banking

On January 20, 2026, Shepherd Wealth Management completely liquidated its entire position in Pathward Financial (NASDAQ:CASH), offloading 15,726 shares in a transaction valued at approximately $10.06 million. This exit marked a significant reversal, as Pathward had previously represented 6.7% of the fund’s assets under management—a major holding by any standard.

The liquidation process used quarterly average pricing to determine the transaction value, and following the sale, the fund held zero shares with a position value of $0. At the time of the transaction, Pathward Financial shares were trading at $74.18, having declined 5.16% over the preceding year while underperforming the broader S&P 500 Index by 17.67 percentage points.

The company itself reported solid fundamentals through September 2025, with trailing-12-month revenue of $724.3 million and net income of $191.0 million. Its dividend yield stood at 0.27% as of the filing date. Pathward operates as a diversified financial services provider, offering banking products including demand deposit accounts, commercial finance, consumer credit, and payment processing solutions.

Strategic Reallocation Reveals Water Scarcity as Growth Opportunity

The true headline from Shepherd’s reallocation wasn’t the regional bank exit—it was the aggressive pivot toward water infrastructure. The fund established a massive position in the Invesco Water Resources ETF (NASDAQ:PHO), which jumped to 27% of the portfolio, becoming the fund’s single largest holding by a wide margin.

This concentrated bet on water-related assets signals management’s conviction about water scarcity emerging as a defining investment theme. Most institutional advisors maintain strict risk limits, typically capping single positions at 5-10% of portfolio value. By allocating 27% to water resources, Shepherd is making an outsized statement about the opportunity set in this space.

The water pivot wasn’t Shepherd’s only strategic move. The fund simultaneously trimmed its big tech exposure while adding Cameco, a uranium mining company positioned to benefit from surging power demands driven by artificial intelligence infrastructure expansion. This dual move—reducing traditional technology stocks while adding nuclear energy exposure—reflects a nuanced view that growth drivers are shifting away from software and semiconductors toward physical infrastructure and energy solutions.

Market Implications: Capital Reallocation at Scale

Following the filing, Shepherd’s top holdings paint a picture of the fund’s new investment thesis:

• Invesco Water Resources ETF (NASDAQ:PHO): $39.47 million (27.4% of AUM)
• Nvidia (NASDAQ:NVDA): $11.99 million (8.3% of AUM)
• Palantir Technologies (NASDAQ:PLTR): $9.93 million (6.9% of AUM)
• Tesla (NASDAQ:TSLA): $9.14 million (6.4% of AUM)
• iShares Russell 2000 ETF (NYSEMKT:IWM): $6.35 million (4.4% of AUM)

The data reveals a fund that has dramatically deprioritized its former concentrated bets. Beyond the Pathward exit, Shepherd completely eliminated its position in Axon Enterprise despite the company’s strong earnings performance—signaling that operational excellence alone isn’t enough to retain the fund’s capital in this shifting environment.

Pathward Financial now represents 0% of fund assets, down from 6.7% in the previous quarter. This wasn’t a gradual trim; it was a clean break, suggesting management identified a change in either the company’s prospects or the broader opportunity set for capital deployment.

What This Means for Investors Watching Scarcity Trends

Shepherd Wealth Management’s dramatic moves offer a compelling case study in how sophisticated capital allocators are reassessing growth narratives. The fund’s 13F filing reveals a complete strategic overhaul, not routine rebalancing. By establishing such an outsized position in water-related assets amid rising awareness of water scarcity, the fund is betting that infrastructure-focused investments will outpace traditional technology growth over the coming years.

The concentration of capital into water resources amid growing global concerns about scarcity—combined with simultaneous exits from traditional financial services—points toward a broader market shift. For investors, this signals that resource constraints and infrastructure needs are areas garnering serious institutional attention. Whether this rotation proves prescient or proves overextended will become clearer as capital continues flowing into assets tied to long-term scarcity challenges.

The messaging is clear: in an era where water scarcity and energy demands are reshaping economics, the bets are shifting from consumption-focused growth to infrastructure-resilient positioning.