Bailard International Equity Strategy

Investor Summary

Bailard, Inc. is an independent, values-driven asset and wealth management firm founded in 1969 by three Stanford Graduate School of Business alumni and based in Foster City and San Francisco, California. The firm operates under six core values: accountability, compassion, courage, excellence, fairness, and independence. Bailard is majority employee-owned, women-led, and serves individuals, families, and institutions through comprehensive wealth management and long-term asset management across equities, fixed income, private real estate, and sustainable investing. As of September 2025, Bailard employs 85 people, with 54% being women and minorities, maintains 80% employee ownership, and has a 14-year average professional tenure among professionals with 47% of VPs and above being women.

Fund Strategy

The Bailard International Equity Strategy provides broad developed and emerging market exposure, blending quantitative country evaluation and quantitative stock evaluation, together with a key layer of qualitative oversight. Country awareness underlies the whole process. The investment philosophy is centered around three uncorrelated sources of alpha: country selection, security selection, and tactical currency hedging. The strategy uses a dynamic quantitative methodology to rank 47 countries based on proprietary behavioral finance factors and assesses stocks using metrics like value, momentum, earnings revisions, and quality tailored by country-specific patterns. Conviction in a position requires the overlap of three perspectives: high country ranking, high stock ranking, and positive qualitative view. Risk is rigorously managed through tracking error constraints, with ex-ante tracking error generally constrained to 4% to 6% to limit volatility and benchmark underperformance.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
8.53%	1.32%	1.32%

Executive Summary

The Bailard International Equity Strategy generated a 1.32% net return in Q1 2026, outperforming the MSCI EAFE Index which fell 1.24%. The quarter was dominated by geopolitical shock from military strikes in the Middle East, which effectively closed the Strait of Hormuz and triggered a severe energy crunch. Brent crude surged 94%, driving Energy sector returns of 40.3% while most other sectors declined. The strategy's all-weather approach helped navigate this volatility through diversified country allocation and balanced cyclical/defensive positioning. Norway was the standout performer, benefiting from its energy-exporting economy, while Korea continued strong performance on AI/semiconductor exposure despite March volatility. The team made tactical adjustments, trimming European cyclicals vulnerable to higher energy costs while adding to energy-exporting countries like Canada. Central banks turned hawkish as energy-driven inflation expectations rose, pushing out Fed rate cut expectations. The managers remain confident in their quantitative and fundamental process to adapt to ongoing uncertainty.

Forward Outlook

The team remains confident that the portfolio and investment process are well-suited to navigate ongoing volatility from Middle East events. They maintain diversification across countries and a careful balance of cyclicals and defensives. Portfolio adjustments aim to respond to shifting probabilities through quantitative and fundamental understanding. They believe maintaining a portfolio that reflects current uncertainty and retaining a robust process to adapt to future effects is more fruitful than predicting precise outcomes.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Mar 31 2026	2026 Q1	NVO	AI, energy, Geopolitical, inflation, international, Korea, Norway	-	Bailard's international strategy outperformed during Q1's geopolitical shock, generating 1.32% net returns versus MSCI EAFE's -1.24% decline. Middle East conflict drove energy prices up 94%, benefiting Norway while hurting cyclicals. The all-weather approach enabled tactical positioning adjustments, trimming European banks/industrials while adding energy exporters. Strong performance in Korea and Taiwan on AI themes.
Feb 6 2026	2025 Q4	ASML, AZN.L, ROG.SW	AI, defense, EAFE, Geopolitical, gold, international, Korea, Utilities	-	Bailard's international strategy delivered 34.9% annual returns, outpacing U.S. markets by the widest margin in 30 years. Broad-based gains across AI infrastructure, financials, and precious metals drove performance. Despite geopolitical risks around Taiwan and U.S. policy uncertainty, the manager expects multi-year international equity leadership supported by diverse themes and attractive valuations.
Oct 31 2025	2025 Q3	NVO	AI, Defense Spending, Geopolitical, infrastructure, international, monetary policy, Trade Policy, Valuations	-	Bailard's international equity strategy outperformed with 5.6% Q3 returns, benefiting from Fed rate cuts and improving trade negotiations. Despite political instability in Japan and France, the strategy remains constructive on international equities trading at 40% discount to U.S. peers, with exposure to defense spending, AI themes, and infrastructure investment providing secular tailwinds.
Jul 27 2025	2025 Q2	-	Currency, defense, emerging markets, Eurozone, geopolitics, infrastructure, international, Trade Policy	-	Bailard's international equity strategy returned 11.37% in Q2 despite trade policy volatility that drove the dollar to its worst first half since 1973. Eurozone markets led gains while emerging markets were mixed. The manager sees a favorable long-run cycle emerging from structural shifts toward self-reliance and infrastructure investment, despite ongoing geopolitical uncertainties.
Mar 31 2025	2025 Q1	NVO	EAFE, Europe, Geopolitical, international, momentum, Trade Policy, value, volatility	-	Bailard's international strategy capitalized on European strength and value rotation, delivering 8.81% returns versus 6.86% for EAFE. Trump administration policy uncertainty created opportunities as investors repositioned toward undervalued non-US equities. European structural reforms and attractive valuations provide compelling longer-term prospects despite near-term volatility from trade policy implementation.
Dec 31 2024	2024 Q4	TSM	Currency, EAFE, Elections, emerging markets, international, value	-	Bailard's international strategy outperformed benchmarks despite currency headwinds and global political turmoil in Q4. Strong sector positioning in Communications Services and Technology, plus geographic allocation avoiding major laggards, drove relative performance. With EAFE trading at 45.7% discount to US markets, the manager sees compelling value opportunities in global leaders positioned for growth and re-rating.
Sep 30 2024	2024 Q3	ASML, NVO	China, emerging markets, Europe, international, Japan, rates, Stimulus, technology	-	International equities delivered solid Q3 returns driven by central bank easing and Chinese stimulus measures. Technology leadership reversed on semiconductor export concerns while defensive sectors rebounded strongly. Portfolio repositioned toward UK and Germany while trimming Nordic exposure. Outlook remains constructive on continued monetary easing and structural growth themes despite geopolitical and European economic risks.
Jun 30 2024	2024 Q2	NVO, TSM	Elections, emerging markets, international, momentum, monetary policy, value	-	Bailard's international strategy outperformed in Q2 through strong stock selection despite election volatility and monetary policy divergence. The team added exposure to Singapore, Sweden, and China while reducing France and Australia. They remain optimistic on non-US opportunities, focusing on fundamentals over headlines while positioning for multiple catalysts across developed and emerging markets.
Dec 31 2023	2023 Q4	-	EAFE, international, momentum, rates, technology, value	-	Bailard's international strategy posted solid Q4 returns as markets rallied on rate cut expectations and declining Treasury yields. Technology leadership and systematic country allocation drove performance. The manager remains optimistic for 2024 international equity returns despite economic growth concerns, maintaining disciplined factor-based positioning across developed and emerging markets.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Mar 31 2026

2026 Q1

NVO

AI, energy, Geopolitical, inflation, international, Korea, Norway

Bailard's international strategy outperformed during Q1's geopolitical shock, generating 1.32% net returns versus MSCI EAFE's -1.24% decline. Middle East conflict drove energy prices up 94%, benefiting Norway while hurting cyclicals. The all-weather approach enabled tactical positioning adjustments, trimming European banks/industrials while adding energy exporters. Strong performance in Korea and Taiwan on AI themes.

Feb 6 2026

2025 Q4

ASML, AZN.L, ROG.SW

AI, defense, EAFE, Geopolitical, gold, international, Korea, Utilities

Bailard's international strategy delivered 34.9% annual returns, outpacing U.S. markets by the widest margin in 30 years. Broad-based gains across AI infrastructure, financials, and precious metals drove performance. Despite geopolitical risks around Taiwan and U.S. policy uncertainty, the manager expects multi-year international equity leadership supported by diverse themes and attractive valuations.

Oct 31 2025

2025 Q3

NVO

AI, Defense Spending, Geopolitical, infrastructure, international, monetary policy, Trade Policy, Valuations

Bailard's international equity strategy outperformed with 5.6% Q3 returns, benefiting from Fed rate cuts and improving trade negotiations. Despite political instability in Japan and France, the strategy remains constructive on international equities trading at 40% discount to U.S. peers, with exposure to defense spending, AI themes, and infrastructure investment providing secular tailwinds.

Jul 27 2025

2025 Q2

Currency, defense, emerging markets, Eurozone, geopolitics, infrastructure, international, Trade Policy

Bailard's international equity strategy returned 11.37% in Q2 despite trade policy volatility that drove the dollar to its worst first half since 1973. Eurozone markets led gains while emerging markets were mixed. The manager sees a favorable long-run cycle emerging from structural shifts toward self-reliance and infrastructure investment, despite ongoing geopolitical uncertainties.

Mar 31 2025

2025 Q1

NVO

EAFE, Europe, Geopolitical, international, momentum, Trade Policy, value, volatility

Bailard's international strategy capitalized on European strength and value rotation, delivering 8.81% returns versus 6.86% for EAFE. Trump administration policy uncertainty created opportunities as investors repositioned toward undervalued non-US equities. European structural reforms and attractive valuations provide compelling longer-term prospects despite near-term volatility from trade policy implementation.

Dec 31 2024

2024 Q4

TSM

Currency, EAFE, Elections, emerging markets, international, value

Bailard's international strategy outperformed benchmarks despite currency headwinds and global political turmoil in Q4. Strong sector positioning in Communications Services and Technology, plus geographic allocation avoiding major laggards, drove relative performance. With EAFE trading at 45.7% discount to US markets, the manager sees compelling value opportunities in global leaders positioned for growth and re-rating.

Sep 30 2024

2024 Q3

ASML, NVO

China, emerging markets, Europe, international, Japan, rates, Stimulus, technology

International equities delivered solid Q3 returns driven by central bank easing and Chinese stimulus measures. Technology leadership reversed on semiconductor export concerns while defensive sectors rebounded strongly. Portfolio repositioned toward UK and Germany while trimming Nordic exposure. Outlook remains constructive on continued monetary easing and structural growth themes despite geopolitical and European economic risks.

Jun 30 2024

2024 Q2

NVO, TSM

Elections, emerging markets, international, momentum, monetary policy, value

Bailard's international strategy outperformed in Q2 through strong stock selection despite election volatility and monetary policy divergence. The team added exposure to Singapore, Sweden, and China while reducing France and Australia. They remain optimistic on non-US opportunities, focusing on fundamentals over headlines while positioning for multiple catalysts across developed and emerging markets.

Dec 31 2023

2023 Q4

EAFE, international, momentum, rates, technology, value

Bailard's international strategy posted solid Q4 returns as markets rallied on rate cut expectations and declining Treasury yields. Technology leadership and systematic country allocation drove performance. The manager remains optimistic for 2024 international equity returns despite economic growth concerns, maintaining disciplined factor-based positioning across developed and emerging markets.

QUARTER	THEMES	TAGS
2026 Q1	Energy The effective closure of the Strait of Hormuz triggered a severe energy crunch, sending Brent crude futures surging 94% for the quarter. Energy sector returned 40.3% for EAFE, with Norway benefiting significantly as an energy-exporting economy. Higher energy prices create uneven impacts globally, negatively affecting transportation, petrochemicals, and manufacturing while positively impacting non-Gulf oil producers and refiners.	Oil Natural Gas Energy Transition Refiners Norway
	Geopolitical Military strikes in the Middle East created a major geopolitical shock that drove significant market volatility. The closure of the Strait of Hormuz disrupted global energy supply chains. Disruptive events are rarely short-lived, with ongoing political, economic, and financial reverberations expected similar to past events like COVID or Brexit.	Middle East Sanctions Trade Policy Defense
	AI Korea continued its strong performance from 2025 into early 2026 on AI/semiconductor exposure, with the country index rallying 56% in the first two months. Taiwan was also relatively strong on continued AI buildouts. However, fears of AI disruption hurt many of China's Internet giants during the quarter.	AI Semiconductors South Korea Taiwan China
	Inflation Higher energy prices pushed inflation expectations upward, causing central banks to turn more hawkish. Macroeconomists cut global growth forecasts and increased inflation estimates. Elevated energy costs have historically been sufficient to disrupt economic momentum and create downside risk to growth.	Inflation Rates Growth
2025 Q4	AI AI has been the defining theme of market leadership in 2025, driving data center capex and benefiting companies like Bloom Energy and Sandisk. The theme experienced volatility in Q4 with concerns over durability, but reasserted dominance after NVIDIA's strong earnings. AI data centers require enormous power and storage, creating opportunities for infrastructure providers.	Data Centers Infrastructure Power Storage Semiconductors
	Electrification The portfolio maintains its largest absolute and relative exposure to the Electrification theme within Industrials. However, the manager has modestly reduced exposure to some larger holdings in this theme during the quarter, suggesting a more selective approach while maintaining conviction in the broader trend.	Power Grid Infrastructure Energy Transition
	Biotech Biotech was a standout performer during the quarter, delivering its best quarter in five years. The sector benefited from an improving rate environment, easing regulation with more M&A activity, and excitement around AI's promise in driving efficiencies in drug discovery. Performance broadened beyond the AI theme.	Pharmaceuticals Drug Discovery M&A Regulation
	Aerospace The portfolio continues to have conviction in the Aerospace theme alongside Electrification within the Industrials sector. Rocket Lab, an end-to-end space company, was mentioned as a new position with strong earnings results and growing backlog, though lack of exposure for most of the period created a relative performance detractor.	Space Defense Launch Services Satellites
	Solar First Solar was highlighted as a top contributor, benefiting from being a vertically integrated US manufacturer using superior thin-film technology. The company gained from Trump Administration's policies driving US demand for non-China solar products, positioning it well for large-scale deployment advantages.	Renewable Energy Manufacturing Trade Policy
2025 Q3	Defense Spending Defense themes retained momentum throughout the quarter as one of the core equity themes that remained strong. The strategy participates in expanding defense budgets as a secular tailwind for international equities.	Defense Military Security Budgets Spending
	AI The AI thematic received fresh stimulus with significant investment pledges from tech giants during the quarter. Artificial intelligence applications and buildouts represent a secular theme that international equities participate in.	Artificial Intelligence Technology Investment Applications Buildouts
	Infrastructure Spending Infrastructure spending is identified as one of the variety of secular themes that international equities participate in, providing long-term tailwinds for the asset class.	Infrastructure Investment Development Spending Secular
	Trade Policy Trade tensions continued to simmer with negotiations progressing more favorably than anticipated. Deals with EU, Japan, and South Korea concluded at 15% baseline rates, while talks with India and Brazil soured with 50% tariffs imposed.	Trade Tariffs Negotiations Policy Tensions
2025 Q2	Trade Policy U.S. trade uncertainties and tariff negotiations dominated the quarter, with Trump's April 2nd tariff announcement causing market volatility before a 90-day pause. The administration's escalate to de-escalate pattern continues with deadline extensions, while nations pursue strategic alliances and self-reliance efforts in response to U.S.-induced unpredictability.	Tariffs Trade Geopolitics Dollar Policy
	Defense Spending Defense emerged as one of the themes with increased expectations year-to-date. Middle East tensions escalated with Israeli and U.S. airstrikes on Iran's nuclear facilities, triggering retaliatory attacks and highlighting ongoing geopolitical risks that support defense investment themes.	Defense Geopolitics Military Conflict Security
	Infrastructure Spending Infrastructure was identified as one of the themes seeing increased expectations year-to-date. The European Union's efforts to reform fragmented financial markets to better balance capital supply with internal demands for infrastructure investment should provide opportunities for various firms in the region.	Infrastructure Capital Investment Europe Development
	Dollar The U.S. dollar experienced its worst first half since 1973, slumping over 10% amid trade uncertainties and policy back-and-forth. The euro, pound, and Swiss franc hit three-year highs while the Taiwan dollar surged 8% amid dollar hedging by exporters, providing a boost for non-U.S. firms' revenues and profits.	Currency Dollar Exchange Hedging Volatility
2025 Q1	Trade Policy Trump administration's tariff policies created significant uncertainty, with initial targets including Canada, Mexico, and China. The broad application and stop-start implementation raised questions about effectiveness in changing trading patterns. Policy uncertainty is expected to impact economic statistics through pulled-forward imports, delayed real investment, and disrupted supply chains.	Tariffs Trade Policy Uncertainty Implementation
	Europe European markets experienced strong performance with significant structural reforms following geopolitical tensions. German legislation loosened fiscal restrictions enabling investments in defense, infrastructure, and climate initiatives. European stocks rallied particularly in Banking and Aerospace & Defense sectors, with the Eurozone showing exceptional strength across multiple countries.	Reform Defense Infrastructure Banking Aerospace
	Value EAFE Value significantly outperformed EAFE Growth by better than 9% during the quarter. This reflected improving economic expectations and investor repositioning towards underappreciated opportunities. Non-US equities trade at a discount across all eleven sectors and roughly 40% discount overall on a trailing earnings basis.	Outperformance Discount Undervalued Repositioning Opportunities
	Momentum The strategy's emphasis on momentum proved effective as many year-end top developed market rankings continued in strength during the first quarter. Countries like Singapore, Germany, Austria, and Spain maintained their momentum, while the model successfully identified emerging trends like Norway's rise through the quarter.	Rankings Continuation Trends Performance Model
2024 Q4	E-commerce E-commerce related firms reported strong earnings growth during the quarter. Singapore and Canada performed well partly due to significant e-commerce constituents. The portfolio maintained positioning in areas within Consumer Discretionary that included e-commerce exposure.	E-commerce Consumer Discretionary Earnings Growth Singapore Canada
	Semiconductors Taiwan Semiconductor Manufacturing Company continued its strength, helping Taiwan outperform with a 3.3% gain. However, Samsung continued to struggle, contributing to South Korea's underperformance. The semiconductor sector showed mixed results during the quarter.	Taiwan Semiconductor Samsung Taiwan South Korea Technology
2024 Q3	China Chinese policymakers announced new stimulus measures which prompted a rally in mainland and Hong Kong markets. China's policy shift indicated at quarter's end caused a rapid rally with China up 23.5% for the quarter and 23.9% in September alone. The stimulus unleashed from the Chinese government gives renewed hope for a growth revival in the region.	Stimulus Policy Rally Growth Recovery
	Rates Falling inflation statistics led markets to anticipate a dovish Federal Reserve which followed through with a half-point rate cut near quarter's end. The ECB cut rates first in June then again in September, and the BoE cut in August. With inflationary pressures largely behind us, the market can expect central banks to continue easing and attempt to navigate a soft landing.	Central Banks Easing Inflation Fed Dovish
	Semiconductors Semiconductor firms' past performance leadership was shaken by concern over export restrictions to China. EAFE Technology fell 2.4% after leading for the first half of the year. The portfolio's selection within Technology was additive by avoiding many of the worst-performing Semiconductor companies.	Export Restrictions Technology Performance Selection
2024 Q2	Elections Multiple major elections occurred during Q2 including South Korea, South Africa, Mexico, India, European Parliament, and France, with voters' discontent being a common thread as many incumbents underperformed expectations. Elections impacted country index returns significantly, with Turkey, South Africa, and India seeing positive investor reactions while Mexico lagged due to concerns over ruling party power concentration.	Elections Politics Emerging Markets Volatility Country Selection
	Monetary Policy A global monetary loosening cycle began to take shape with the European Central Bank, Bank of Canada, and Swiss National Bank all loosening policy while the Fed held rates steady. The expected monetary divergence between the US Federal Reserve and other central banks materialized, creating currency pressures including Japanese yen weakness that prompted intervention.	Central Banks Interest Rates Monetary Policy Currency Fed
2023 Q4	Rates The quarter saw a clear regime shift with the monetary tightening cycle ending and increased expectations for rate cuts in 2024. Declining U.S. Treasury yields in the final two months drove broad developed markets higher, with yields ending below 4% after peaking near 5% in October.	Interest Rates Fed Policy Treasury Yields Monetary Policy Rate Cuts
	Technology Technology sector was a prime beneficiary of lower discount rates, with longer-duration tech stocks leading the rally. The EAFE Technology sector gained 21.3% for the quarter, and the composite maintained a Technology overweight of +2.4%.	Tech Stocks Duration Sector Performance Overweight Valuations

QUARTER

THEMES

Energy

The effective closure of the Strait of Hormuz triggered a severe energy crunch, sending Brent crude futures surging 94% for the quarter. Energy sector returned 40.3% for EAFE, with Norway benefiting significantly as an energy-exporting economy. Higher energy prices create uneven impacts globally, negatively affecting transportation, petrochemicals, and manufacturing while positively impacting non-Gulf oil producers and refiners.

Oil Natural Gas Energy Transition Refiners Norway

Geopolitical

Military strikes in the Middle East created a major geopolitical shock that drove significant market volatility. The closure of the Strait of Hormuz disrupted global energy supply chains. Disruptive events are rarely short-lived, with ongoing political, economic, and financial reverberations expected similar to past events like COVID or Brexit.

Middle East Sanctions Trade Policy Defense

AI

Korea continued its strong performance from 2025 into early 2026 on AI/semiconductor exposure, with the country index rallying 56% in the first two months. Taiwan was also relatively strong on continued AI buildouts. However, fears of AI disruption hurt many of China's Internet giants during the quarter.

AI Semiconductors South Korea Taiwan China

Inflation

Higher energy prices pushed inflation expectations upward, causing central banks to turn more hawkish. Macroeconomists cut global growth forecasts and increased inflation estimates. Elevated energy costs have historically been sufficient to disrupt economic momentum and create downside risk to growth.

Inflation Rates Growth

2025 Q4

AI

AI has been the defining theme of market leadership in 2025, driving data center capex and benefiting companies like Bloom Energy and Sandisk. The theme experienced volatility in Q4 with concerns over durability, but reasserted dominance after NVIDIA's strong earnings. AI data centers require enormous power and storage, creating opportunities for infrastructure providers.

Data Centers Infrastructure Power Storage Semiconductors

Electrification

The portfolio maintains its largest absolute and relative exposure to the Electrification theme within Industrials. However, the manager has modestly reduced exposure to some larger holdings in this theme during the quarter, suggesting a more selective approach while maintaining conviction in the broader trend.

Power Grid Infrastructure Energy Transition

Biotech

Biotech was a standout performer during the quarter, delivering its best quarter in five years. The sector benefited from an improving rate environment, easing regulation with more M&A activity, and excitement around AI's promise in driving efficiencies in drug discovery. Performance broadened beyond the AI theme.

Pharmaceuticals Drug Discovery M&A Regulation

Aerospace

The portfolio continues to have conviction in the Aerospace theme alongside Electrification within the Industrials sector. Rocket Lab, an end-to-end space company, was mentioned as a new position with strong earnings results and growing backlog, though lack of exposure for most of the period created a relative performance detractor.

Space Defense Launch Services Satellites

Solar

First Solar was highlighted as a top contributor, benefiting from being a vertically integrated US manufacturer using superior thin-film technology. The company gained from Trump Administration's policies driving US demand for non-China solar products, positioning it well for large-scale deployment advantages.

Renewable Energy Manufacturing Trade Policy

2025 Q3

Defense Spending

Defense themes retained momentum throughout the quarter as one of the core equity themes that remained strong. The strategy participates in expanding defense budgets as a secular tailwind for international equities.

Defense Military Security Budgets Spending

AI

The AI thematic received fresh stimulus with significant investment pledges from tech giants during the quarter. Artificial intelligence applications and buildouts represent a secular theme that international equities participate in.

Artificial Intelligence Technology Investment Applications Buildouts

Infrastructure Spending

Infrastructure spending is identified as one of the variety of secular themes that international equities participate in, providing long-term tailwinds for the asset class.

Infrastructure Investment Development Spending Secular

Trade Policy

Trade tensions continued to simmer with negotiations progressing more favorably than anticipated. Deals with EU, Japan, and South Korea concluded at 15% baseline rates, while talks with India and Brazil soured with 50% tariffs imposed.

Trade Tariffs Negotiations Policy Tensions

2025 Q2

Trade Policy

U.S. trade uncertainties and tariff negotiations dominated the quarter, with Trump's April 2nd tariff announcement causing market volatility before a 90-day pause. The administration's escalate to de-escalate pattern continues with deadline extensions, while nations pursue strategic alliances and self-reliance efforts in response to U.S.-induced unpredictability.

Tariffs Trade Geopolitics Dollar Policy

Defense Spending

Defense emerged as one of the themes with increased expectations year-to-date. Middle East tensions escalated with Israeli and U.S. airstrikes on Iran's nuclear facilities, triggering retaliatory attacks and highlighting ongoing geopolitical risks that support defense investment themes.

Defense Geopolitics Military Conflict Security

Infrastructure Spending

Infrastructure was identified as one of the themes seeing increased expectations year-to-date. The European Union's efforts to reform fragmented financial markets to better balance capital supply with internal demands for infrastructure investment should provide opportunities for various firms in the region.

Infrastructure Capital Investment Europe Development

Dollar

The U.S. dollar experienced its worst first half since 1973, slumping over 10% amid trade uncertainties and policy back-and-forth. The euro, pound, and Swiss franc hit three-year highs while the Taiwan dollar surged 8% amid dollar hedging by exporters, providing a boost for non-U.S. firms' revenues and profits.

Currency Dollar Exchange Hedging Volatility

2025 Q1

Trade Policy

Trump administration's tariff policies created significant uncertainty, with initial targets including Canada, Mexico, and China. The broad application and stop-start implementation raised questions about effectiveness in changing trading patterns. Policy uncertainty is expected to impact economic statistics through pulled-forward imports, delayed real investment, and disrupted supply chains.

Tariffs Trade Policy Uncertainty Implementation

Europe

European markets experienced strong performance with significant structural reforms following geopolitical tensions. German legislation loosened fiscal restrictions enabling investments in defense, infrastructure, and climate initiatives. European stocks rallied particularly in Banking and Aerospace & Defense sectors, with the Eurozone showing exceptional strength across multiple countries.

Reform Defense Infrastructure Banking Aerospace

Value

EAFE Value significantly outperformed EAFE Growth by better than 9% during the quarter. This reflected improving economic expectations and investor repositioning towards underappreciated opportunities. Non-US equities trade at a discount across all eleven sectors and roughly 40% discount overall on a trailing earnings basis.

Outperformance Discount Undervalued Repositioning Opportunities

Momentum

The strategy's emphasis on momentum proved effective as many year-end top developed market rankings continued in strength during the first quarter. Countries like Singapore, Germany, Austria, and Spain maintained their momentum, while the model successfully identified emerging trends like Norway's rise through the quarter.

Rankings Continuation Trends Performance Model

2024 Q4

E-commerce

E-commerce related firms reported strong earnings growth during the quarter. Singapore and Canada performed well partly due to significant e-commerce constituents. The portfolio maintained positioning in areas within Consumer Discretionary that included e-commerce exposure.

E-commerce Consumer Discretionary Earnings Growth Singapore Canada

Semiconductors

Taiwan Semiconductor Manufacturing Company continued its strength, helping Taiwan outperform with a 3.3% gain. However, Samsung continued to struggle, contributing to South Korea's underperformance. The semiconductor sector showed mixed results during the quarter.

Taiwan Semiconductor Samsung Taiwan South Korea Technology

2024 Q3

China

Chinese policymakers announced new stimulus measures which prompted a rally in mainland and Hong Kong markets. China's policy shift indicated at quarter's end caused a rapid rally with China up 23.5% for the quarter and 23.9% in September alone. The stimulus unleashed from the Chinese government gives renewed hope for a growth revival in the region.

Stimulus Policy Rally Growth Recovery

Rates

Falling inflation statistics led markets to anticipate a dovish Federal Reserve which followed through with a half-point rate cut near quarter's end. The ECB cut rates first in June then again in September, and the BoE cut in August. With inflationary pressures largely behind us, the market can expect central banks to continue easing and attempt to navigate a soft landing.

Central Banks Easing Inflation Fed Dovish

Semiconductors

Semiconductor firms' past performance leadership was shaken by concern over export restrictions to China. EAFE Technology fell 2.4% after leading for the first half of the year. The portfolio's selection within Technology was additive by avoiding many of the worst-performing Semiconductor companies.

Export Restrictions Technology Performance Selection

2024 Q2

Elections

Multiple major elections occurred during Q2 including South Korea, South Africa, Mexico, India, European Parliament, and France, with voters' discontent being a common thread as many incumbents underperformed expectations. Elections impacted country index returns significantly, with Turkey, South Africa, and India seeing positive investor reactions while Mexico lagged due to concerns over ruling party power concentration.

Elections Politics Emerging Markets Volatility Country Selection

Monetary Policy

A global monetary loosening cycle began to take shape with the European Central Bank, Bank of Canada, and Swiss National Bank all loosening policy while the Fed held rates steady. The expected monetary divergence between the US Federal Reserve and other central banks materialized, creating currency pressures including Japanese yen weakness that prompted intervention.

Central Banks Interest Rates Monetary Policy Currency Fed

2023 Q4

Rates

The quarter saw a clear regime shift with the monetary tightening cycle ending and increased expectations for rate cuts in 2024. Declining U.S. Treasury yields in the final two months drove broad developed markets higher, with yields ending below 4% after peaking near 5% in October.

Interest Rates Fed Policy Treasury Yields Monetary Policy Rate Cuts

Technology

Technology sector was a prime beneficiary of lower discount rates, with longer-duration tech stocks leading the rally. The EAFE Technology sector gained 21.3% for the quarter, and the composite maintained a Technology overweight of +2.4%.

Tech Stocks Duration Sector Performance Overweight Valuations

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
No Elevator Pitches found

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

No Elevator Pitches found

TICKER	COMMENTARY
NVO	Pharma giant Novo Nordisk continued to face competitive headwinds, leadership transitions, and disappointing drug trial results. The stock and country did hold up better than most in March, however.

TICKER

COMMENTARY

NVO

Pharma giant Novo Nordisk continued to face competitive headwinds, leadership transitions, and disappointing drug trial results. The stock and country did hold up better than most in March, however.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

Put/Call

Amount Bought

Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

Put/Call

Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Energy

Geopolitical

AI

Inflation

AI

Electrification

Biotech

Aerospace

Solar

Defense Spending

AI

Infrastructure Spending

Trade Policy

Trade Policy

Defense Spending

Infrastructure Spending

Dollar

Trade Policy

Europe

Value

Momentum

E-commerce

Semiconductors

China

Rates

Semiconductors

Elections

Monetary Policy

Rates

Technology

Investor Pitches

Current Portfolio as of ( 31st March 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Eric Leve Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

Join for free and get access to the buyside

Get insights from the world's most influential hedge fund investors direct to your inbox

Follow Us On:

Subscribe to receive email notification and updates for:

Bailard International Equity Strategy