Gabelli Investment Management Firm recently released its "Focused Growth and Income Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund declined 1.61% in the second quarter of 2026, as pressure on telecommunications, income-producing securities, and rate-sensitive investments outweighed gains elsewhere in the portfolio.
The Fund noted that the interest-rate environment became less favorable during the quarter, with the Federal Reserve maintaining rates at 3.50%–3.75% and adopting a more hawkish stance, while inflation accelerated from 3.8% in April to 4.2% in May. Looking ahead, the Fund views the higher-for-longer rate environment as cyclical rather than structural and believes elevated yields across its investments improve its forward income proposition. It remains focused on companies with sustainable cash flows, pricing power, resilient business models, stable balance sheets, and the ability to compound value through economic cycles.
The Fund maintained a $0.08-per-share monthly distribution and had a 6.53% SEC yield as of December 31, 2025. In addition, please check the Fund's top five holdings to know its best picks in 2026. In its second-quarter 2026 investor letter, Gabelli Focused Growth and Income Fund highlighted stocks like XPLR Infrastructure LP (NYSE:XIFR).
XPLR Infrastructure LP (NYSE:XIFR) is a renewable energy infrastructure company that owns and operates contracted wind, solar, and battery storage assets. XPLR Infrastructure LP (NYSE:XIFR) had a one-month return of approximately -7.38%, while its shares traded between $8.68 and $13.25 over the last 52 weeks. On September 21, 2026, XPLR Infrastructure LP (NYSE:XIFR) stock closed at approximately $10.84 per unit, with a market capitalization of about $1.02 billion.
Gabelli Focused Growth and Income Fund stated the following regarding XPLR Infrastructure LP (NYSE:XIFR) in its Q2 2026 investor letter: "XPLR Infrastructure LP (NYSE:XIFR) (4.6%) (XIFR – $11.81 – NYSE) gained approximately 11% during the quarter and was the Fund's second largest contributor. The company swung to first quarter net income of $33 million — a $131 million improvement over the prior-year period — with earnings of $0.35 per unit well ahead of consensus, and management reaffirmed 2026 free cash flow before growth guidance of approximately $600–$700 million. XPLR's portfolio of contracted wind, solar, and battery storage assets is benefiting from repowering and recontracting initiatives that continue to unlock embedded asset value, while accelerating AI-driven power demand provides a structural tailwind for its clean energy fleet.
Following its repositioning as a self-funded infrastructure operator, we believe the units remain undervalued relative to the cash-generating power of the underlying assets, and continued execution against the free cash flow roadmap should drive further re-rating." XPLR Infrastructure LP (NYSE:XIFR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 29 hedge fund portfolios held XPLR Infrastructure LP (NYSE:XIFR) at the end of the first quarter, compared with 28 in the previous quarter. While we acknowledge the risk and potential of XPLR Infrastructure LP (NYSE:XIFR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame.
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