Group 1 - ClearBridge Investments reported that the third quarter of 2025 continued the market rally, driven by reduced policy uncertainty, a Fed rate cut, and retail enthusiasm, resulting in another double-digit gain. However, the ClearBridge Small Cap Growth Strategy underperformed the Russell 2000 Growth Index, which gained 12.2% [1] - The underperformance was attributed to the smallest market caps, lowest returns on equity, and highest beta names [1] - The investor letter highlighted Avidity Biosciences, Inc. (NASDAQ:RNA) as a key stock, which had a one-month return of 23.74% and a 52-week gain of 6.55%, closing at $49.77 per share with a market capitalization of $7.262 billion on October 10, 2025 [2] Group 2 - Avidity Biosciences, Inc. is focused on RNA therapeutics and has multiple late-stage development programs aimed at treating muscular dystrophy conditions, with promising early data suggesting potential benefits from upcoming clinical trial results [3] - Despite its potential, Avidity Biosciences, Inc. was not among the 30 most popular stocks among hedge funds, with 26 hedge fund portfolios holding the stock at the end of Q2 2025, down from 28 in the previous quarter [4] - The analysis suggests that while Avidity Biosciences has investment potential, certain AI stocks may offer greater upside potential with less downside risk [4]