Shepherd Wealth Management Pivots to Water Scarcity Solutions, Exits Banking and Tech Positions

On January 20, 2026, Shepherd Wealth Management disclosed a dramatic portfolio restructuring through its SEC 13F filing, revealing a strategic pivot away from traditional financial services and technology stocks toward water infrastructure and renewable energy. The fund’s most striking move centers on addressing global water scarcity through a massive 27% allocation to the Invesco Water Resources ETF, now its largest holding worth $39.47 million. Simultaneously, the firm completely liquidated its position in Pathward Financial and reduced big tech exposure, signaling a fundamental shift in how the wealth manager views emerging investment opportunities in a resource-constrained world.

Strategic Portfolio Realignment Reflects Water Scarcity Focus

The investment thesis underlying Shepherd Wealth Management’s Q4 2025 repositioning appears driven by conviction that water scarcity represents one of the defining investment themes of the coming decade. This concentration—allocating 27% of the fund’s assets under management to a single water resources position—far exceeds conventional portfolio guidelines that typically cap individual positions at 5-10% to manage risk. The decision reflects management’s assessment that freshwater stress, aging water infrastructure, and climate-driven supply challenges across the United States create both urgency and opportunity.

The water resources ETF position signals the firm’s belief that companies providing water treatment solutions, infrastructure improvements, and efficiency technologies will outperform as scarcity pressures mount. This concentrated bet suggests Shepherd views water-related investments as offering asymmetric return potential compared to mature sectors like regional banking or cyclical technology stocks.

The Pathward Financial Exit: Full Position Liquidation

At the core of this strategic overhaul sits the complete exit from Pathward Financial, a diversified financial services provider headquartered in the regional banking sector. The fund sold all 15,726 shares held in the company, representing a $10.06 million transaction based on quarterly average pricing. This position previously constituted 6.7% of the fund’s assets under management—a significant allocation that has now been entirely unwound.

Pathward Financial, trading at $74.18 per share as of the transaction date, has underperformed the broader market substantially. Over the trailing 12 months, the regional bank declined 5.16% in value, lagging the S&P 500 Index by 17.67 percentage points. Despite the company’s solid fundamentals—reporting trailing-12-month revenue of $724.3 million and net income of $191.0 million as of September 30, 2025—the exit reflects Shepherd’s reduced conviction in traditional regional banking models amid shifting market conditions.

The firm’s post-exit portfolio now excludes Pathward Financial entirely, with the capital redistributed toward thematic positions aligned with resource scarcity and energy transition opportunities. This represents not a tactical trim but a complete strategic pivot, particularly notable given that Pathward remains profitable and dividend-yielding at 0.27% as of January 20, 2026.

Aggressive Tech Reduction and Strategic New Positions

Beyond the banking exit, Shepherd Wealth Management also completely liquidated its entire position in Axon Enterprise, a high-performing law enforcement technology company, despite strong earnings performance. This decision further underscores the fund’s shift away from traditional growth narratives.

Simultaneously, the firm established a new position in Cameco, a uranium mining company positioned to benefit from surging electricity demand driven by AI data center buildouts. This tactical addition complements the broader water infrastructure thesis, combining exposure to two critical resource themes: water scarcity and the energy transition powering artificial intelligence infrastructure.

After the reshuffling, the fund’s remaining tech exposure remains meaningful but reduced. Nvidia held the second-largest position at $11.99 million (8.3% of AUM), followed by Palantir Technologies at $9.93 million (6.9% of AUM) and Tesla at $9.14 million (6.4% of AUM). A small-cap position in IWM rounded out the top five holdings at $6.35 million (4.4% of AUM).

What Water Scarcity Trends Reveal About Future Investment Opportunities

Shepherd Wealth Management’s aggressive repositioning toward water infrastructure and away from regional banking and mature tech holdings offers investors a window into evolving perceptions of systemic risks and opportunities. The 27% water allocation—unconventional for a diversified fund—suggests management sees water scarcity as a secular trend comparable in magnitude to the technology boom that drove market outperformance over the past decade.

Water stress increasingly impacts agricultural productivity, industrial operations, and consumer demand across developed economies. Investment opportunities in water treatment, desalination, recycling infrastructure, and agricultural efficiency technologies are expected to expand as scarcity pressures intensify. For investors monitoring macro trends, the fund’s reallocation provides a signal that specialized exposure to water solutions deserves consideration within broader portfolio construction.

The exit from underperforming regional banking while simultaneously reducing traditional tech exposure suggests Shepherd believes capital is better deployed toward themes directly addressing physical resource constraints than toward mature financial services or growth-at-any-price technology narratives.