| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.4% | 8.7% | 35.4% |
| 2025 | 2024 |
|---|---|
| 35.4% | 0.5% |
The Polaris International Equity Composite delivered exceptional performance in Q4 2025, gaining 8.74% for the quarter and 35.37% for the full year, significantly outpacing the MSCI EAFE benchmark. This marked the first reversal in market leadership in the 2020s, driven by converging forces including a weaker U.S. dollar, favorable international valuations, and slowing momentum in U.S. technology. The portfolio demonstrated strong sector diversification with outperformance across information technology, industrials, healthcare, and consumer sectors. Key contributors included Korean memory manufacturers SK Hynix and Samsung Electronics, benefiting from supply-demand constraints and expected 2026 price increases. The investment approach remains disciplined, focusing on quality companies with strong cash flows and shareholder-friendly management teams rather than chasing trends. Looking ahead to 2026, international equities remain compelling due to attractive valuations, increasingly shareholder-friendly corporate behavior, and continued U.S. dollar weakness, supporting the case for diversification beyond U.S. assets while maintaining focus on genuine business momentum over distant promises.
International equity markets offer compelling diversification opportunities driven by attractive valuations, weakening U.S. dollar, and strong performance across developed and emerging markets, with the Polaris International Equity Composite demonstrating the strategic advantages through significant outperformance of both international and U.S. benchmarks.
As we enter 2026, international equities remain compelling with attractive valuations, increasingly shareholder-friendly corporate behavior, and a weakening U.S. dollar making a strong case for diversification beyond U.S. assets. The investment approach remains disciplined and focused on strong cash flows from quality companies with good management teams actively creating shareholder value.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | 000270.KS, 000660.KS, 005930.KS, 1299.HK, 2318.HK, 267270.KS, 5871.TW, 6758.T, 8001.T, 8002.T, 8591.T, 8729.T, BABA, BARN.SW, CAP.PA, DHL.DE, IAG.L, JAZZ, LIN, LTM, LUN.TO, MG.TO, ML.PA, NVS, NXT.L, VIPS, YAR.OL | Asia, diversification, Europe, industrials, international, Outperformance, technology, value |
000660 KS 005930 KS CAP FP 7267 JP JAZZ |
Memory chip suppliers SK Hynix and Samsung Electronics were top contributors as supply-demand constraints benefit memory manufacturers. The market expects memory price increases in 2026,… |
| Oct 16 2025 | 2025 Q3 | 8002 JP, 8306 JP, BARN SW, LUN CN, VIPS | Artificial Intelligence, Europe, financials, industrials, semiconductors | - | The letter highlights a two-speed global economy driven by AI investment versus slower cyclical recovery in other sectors. Strong financial sector results in Japan and… |
| Jul 22 2025 | 2025 Q2 | 000660 KS, 8002 JP, GNC LN, IAG LN, JAZZ, LTM, NXT LN | diversification, earnings growth, International Equities, Rotation, valuation |
8002 JP 000660 KS GNC LN |
The commentary focuses on international equity rotation driven by improving earnings, attractive valuations, and policy reform. Management highlights Europe and Asia as sources of relative… |
| Mar 31 2025 | 2025 Q1 | 066570 KS, DG FP, DNB, DTE GR, FTK GR, IAG LN, MG LN, MXCN, NXT LN, OTEX, SB1NO NO, SW, VIPS | - | - | - |
| Dec 31 2024 | 2024 Q4 | 000660 KS, 066570 KS, LTM, MEOH, SONY, UOB SP | - | - | - |
| Sep 30 2024 | 2024 Q3 | 000270 KS, 9433 JP, BRRLY, K900 GR, MX CN | - | - | - |
| Jun 30 2024 | 2024 Q2 | 000270 KS, DG FP, DTG GR, FTK GR, GNC LN, HXSCL, LUN CN | - | - | - |
| May 9 2024 | 2024 Q1 | - | - | - | - |
| Jan 18 2024 | 2023 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CopperMarket shifted from deficit to surplus as Chinese demand stalled for first time in 25 years while supply expanded by 3 million tonnes since 2021. Exchange inventories reached 1.2 million tonnes, highest since 2003. Bearish outlook as China transitions from under-consuming to over-consuming copper. |
Base Metals China Inventories Surplus | |
E-commerceSeveral investments in e-commerce leaders across Asia and Latin America, including MercadoLibre, Sea Limited and Alibaba, faced a more competitive operating environment during the period. As long-term investors, SGA observes that competitive intensity in these markets tends to ebb and flow over shorter time horizons, with market leaders typically emerging from such periods with strengthened strategic positions given inherent network effects. |
Marketplaces Competition Network Effects Asia Latin America | |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
Infrastructure SpendingPlaying on the continued theme of infrastructure spending, defense and energy sustainability, positions in Industrial and Energy sectors including Oshkosh, Coterra, OSI Systems, and Herc Holdings added positively to performance. |
Defense Energy Industrial Government Sustainability | |
Semiconductor CycleThe portfolio's underweight to South Korean semiconductor companies, including Samsung Electronics and SK Hynix, was a key driver of relative underperformance. These stocks continued to benefit from strong AI-related memory demand and elevated investor enthusiasm. Memory chips are largely a commoditized product with weak pricing power, extreme capital intensity and pronounced boom-bust cycles that lead to volatile earnings. |
Memory South Korea Cyclical Commoditized Volatility | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
| 2025 Q2 |
Rotation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 22, 2025 | Fund Letters | Bernard Horn | 8002 JP | Marubeni Corporation | Industrials | Trading Companies & Distributors | Bull | New York Stock Exchange | buybacks, conglomerate, Governance, Japan, Trading | Login |
| Jul 22, 2025 | Fund Letters | Bernard Horn | 000660 KS | SK hynix Inc. | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, datacenters, growth, HBM, semiconductors | Login |
| Jul 22, 2025 | Fund Letters | Bernard Horn | GNC LN | Greencore Group plc | Consumer Staples | Packaged Foods & Meats | Bull | New York Stock Exchange | convenience, Food, scale, Staples, UK | Login |
| Jan 20, 2026 | Fund Letters | Bernard Horn | 000660 KS | SK Hynix Inc. | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, Cyclicality, Memory, Pricing, semiconductors | Login |
| Jan 20, 2026 | Fund Letters | Bernard Horn | 005930 KS | Samsung Electronics Co., Ltd. | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI, Memory, recovery, scale, semiconductors | Login |
| Jan 20, 2026 | Fund Letters | Bernard Horn | CAP FP | Capgemini SE | Information Technology | IT Consulting & Services | Bull | Euronext Stock Exchange | AI, cloud, Digital, efficiency, Itservices | Login |
| Jan 20, 2026 | Fund Letters | Bernard Horn | 7267 JP | Honda Motor Co., Ltd. | Consumer Discretionary | Automobile Manufacturers | Bull | New York Stock Exchange | Autos, Capitalallocation, Cyclicality, Japan | Login |
| Jan 20, 2026 | Fund Letters | Bernard Horn | JAZZ | Jazz Pharmaceuticals plc | Health Care | Biotechnology | Bull | NASDAQ | Biotech, FDA, growth, Oncology, pipeline | Login |
| TICKER | COMMENTARY |
|---|---|
| 000270.KS | South Korean car manufacturer Kia Corp. fared well as sales volumes were expected to reach an all-time high in 2025. An upcoming key model refresh cycle and positive U.S.-Korea tariff resolutions portend strong sales volumes into 2026. |
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 1299.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 2318.HK | Top gainers included Ping An Insurance (+23%) |
| 267270.KS | HD Hyundai Electric was up nearly 30% for the quarter, capitalizing on increased demand to expand/upgrade power infrastructure. The company will complete the construction of a new Korean power distribution equipment plant by the end of 2025. |
| 5871.TW | Chailease Holding Co. had lackluster results, with lower revenues and higher credit losses; in this context, the company is taking a more cautious lending approach. These challenges are linked to a general slow macroeconomy (in China and Thailand) and intense market competition, which have impacted demand for leasing and financing services. |
| 6758.T | Sony |
| 8001.T | Japanese trading/investment companies Marubeni Corp. and Itochu Corp. both posted gains in excess of 10% for the quarter, executing on both organic and acquisitive growth initiatives, while focusing on better shareholder returns. |
| 8002.T | Japanese trading/investment companies Marubeni Corp. and Itochu Corp. both posted gains in excess of 10% for the quarter, executing on both organic and acquisitive growth initiatives, while focusing on better shareholder returns. |
| 8591.T | Japanese diversified financial services group ORIX Corp. gained on strong quarterly earnings, with record net income and earnings per share. The company collected large capital gains from asset sales, namely the divestment of its stake in Greenko, while also partnering with Qatar Investment Authority to launch a new private equity fund. ORIX management raised its full-year earnings forecast and expanded its share repurchase program, boosting investor confidence. |
| 8729.T | Japan's Sony Financial Group Inc. (spin-off from Sony Group) was also exited. |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| BARN.SW | Barry Callebaut successfully navigated unprecedented cocoa price volatility while strengthening its balance sheet. The company partnered with Planet A Foods to scale cocoa-free chocolate alternatives; these efforts were lauded by investors. |
| CAP.PA | Mondrian's disciplined, bottom-up valuation framework allows for selective exposure to AI-related opportunities while we maintain a focus on companies trading at compelling valuations, with limited balance sheet risk, such as Capgemini and Samsung outside the US and Microsoft and Alphabet within the US. |
| DHL.DE | DHL Group reported quarterly results that beat profit expectations (despite a slight revenue dip), driven by cost efficiencies and e-commerce growth. |
| IAG.L | International Consolidated Airlines gained on the same demand metrics, with better-than-expected earnings and balance sheet strength enabling strategic growth (new routes, fleet additions) and buybacks. |
| JAZZ | Jazz Pharmaceuticals, in the Health Care sector, was a top performer, advancing nearly 30% driven by strong third quarter performance and positive clinical trial results for one of its cancer drugs. We continue to hold the company in the Fund. |
| LIN | While the company remains a high-quality global leader in industrial gases, shares of Linde plc declined nearly 10% in Q4 due to a persistent industrial gas volume recession, softer guidance and global macroeconomic concerns. From a macro standpoint, the company continues to struggle with negative base volumes in its core industrial segments. |
| LTM | LATAM Airlines Group, the third largest contributor, is a leading commercial airline in South America that was added to the Fund in 2023. Needless to say, the airline industry had been hit extremely hard by the pandemic, although Latin America was arguably among the hardest hit of all, as the region's air travel was severely restricted, while its airlines were generally not provided with government assistance, unlike in the cases of some airlines in Europe, North America, and Asia. The consequences for much of the industry in Latin America were dire, with numerous carriers in the region (including LATAM) either entering bankruptcy or negotiated settlements with creditors outside of bankruptcy. Shares of LATAM were purchased in the Fund in 2023, shortly after its emergence from bankruptcy. The stigma of the bankruptcy and the sting of the pandemic repelled investors, enabling the Fund to purchase shares at what we believed to be a modest valuation that, again, priced in very low expectations. This was despite our view that LATAM had a much-improved financial profile, competitive position, and cost structure post-bankruptcy, as that process enabled LATAM to meaningfully reduce its debt load and significantly reduce operating costs through headcount reductions, supplier contract renegotiations, and other efficiency initiatives. Since then, LATAM shares have benefited from a recovery and growth in passenger volumes as the region continues to recover from the severe 2020-2021 downturn, and in 2025, performance was driven by impressive business results that have resulted in increased profitability, share repurchases, and improved analyst expectations. |
| LUN.TO | During the fourth quarter and full-year 2025, Lundin Mining and Capstone Copper provided two of the Fund's largest contributions to performance. We have been optimistic, over a long holding period for both companies, that the indispensable nature of copper to modern economies and the exceptional difficulty of maintaining current global supply would become better appreciated. During the last couple of years, we would say that a growing awareness has begun. |
| MG.TO | During the quarter, Chinese online discount retailer Vipshop Holdings Ltd., Canadian auto parts manufacturer Magna International and Swiss pharma Novartis AG were sold as each reached target valuation limits. |
| ML.PA | French tire manufacturer Michelin sold off in October after the company issued a significant guidance cut, in part due to tariff-induced margin pressure. |
| NVS | During the quarter, Chinese online discount retailer Vipshop Holdings Ltd., Canadian auto parts manufacturer Magna International and Swiss pharma Novartis AG were sold as each reached target valuation limits. |
| NXT.L | We initiated two new positions during the year—Greggs and AJ Bell, whilst reducing our exposure to NEXT and Compass Group; and selling out of AutoZone entirely during September. |
| VIPS | During the quarter, Chinese online discount retailer Vipshop Holdings Ltd., Canadian auto parts manufacturer Magna International and Swiss pharma Novartis AG were sold as each reached target valuation limits. |
| YAR.OL | Yara's shares performed well on the back of EPS revisions. Part of the surprisingly high EPS growth was due to Yara International increasing its EPS from $1.75 in 2024 to around $4.25 estimated for 2025 (vs $2.65 expected for 2025 at the start of the year). We expect Yara to again surpass analysts' earnings expectations over the next few years for various reasons related to tight new supply and the recently commenced Carbon Border Adjustment Mechanism (CBAM) in the EU. This is a very well managed business that we have owned for over 20 years that we think we understand well. |
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