Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global equity markets produced another positive quarter with MSCI AC World gaining over 3%, completing a double-digit year driven by Fed rate cuts and strong earnings. Three key themes defined 2025: decoupling from US dominance as non-US markets strengthened on cheap valuations and tariff impacts, AI momentum overcoming valuation concerns despite temporary DeepSeek scare, and market broadening with increased dispersion benefiting active managers. Small cap performance varied regionally with biotech surging 29% in Q4 and precious metals driving Canadian small caps to best year since 2009. Tariffs triggered domestic-oriented rallies including European defense gaining over 100%. Key risks include elevated US valuations, political uncertainty, and AI volatility despite strong fundamentals. Catalysts include continued Fed cuts, regulatory relaxation, and hyperscaler AI CAPEX commitments. The firm expects 2026 to favor specialized active managers as decoupling trends and AI disruption increase stock dispersion while divergent policies create local growth opportunities.
Global markets completed another strong year with decoupling from US dominance, AI momentum overcoming valuation concerns, and market broadening creating opportunities for active managers through increased dispersion and reduced correlation.
The firm expects decoupling and dispersion trends from 2025 to provide compelling opportunities for skilled active managers in 2026 and beyond. AI advancement as disruptive force likely to increase stock dispersion while divergent global policy opens doors for local company growth. Market structure shifts should reward specialized active managers over backwards-looking passive indices.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | 0700.HK, 1810.HK, BABA, GME, HIMS | AI, Biotech, Decoupling, Global Markets, Mining, Rate Cuts, small caps, tariffs | - | AI stocks were among top performers despite high valuations, with momentum overcoming valuation concerns. Chinese DeepSeek caused temporary rotation but recovery was strong due to… |
| Apr 8 2025 | 2025 Q1 | - | - | - | - |
| Jan 14 2025 | 2024 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
Decoupling2025 marked significant shift from US dominance to non-US strength driven by cheap valuations and tariff impacts. Tariffs triggered rally in domestic-oriented themes like European defense which gained over 100%. Emerging markets shrugged off tariff concerns with many top performers seeing limited impact from substantial tariff increases. |
Tariffs Defense Domestic Valuations Non-US | |
MiningMultiple mining holdings across metals including copper, gold, silver, tin, and uranium. Baker Steel Resources Trust contains significant exposure to copper developers, gold royalties, and tungsten projects. Power Metal Resources holds uranium and copper projects with royalties and blockchain mining ventures. |
Copper Gold Silver Uranium Tungsten | |
Small CapsThe fund invests in a portfolio of competitively advantaged small and medium-sized businesses, which remained out of favor for most of the quarter. The strategy of owning leading small-cap businesses has been the foundation since inception, delivering 354 basis points of annual outperformance over the benchmark since inception despite recent headwinds. |
Growth Outperformance Benchmark Russell Businesses |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 1810.HK | Shares declined amid inconsistent growth in the smartphone business, with strong competition limiting market share gains, while rising memory chip prices also pressured smartphone margins. In the electric vehicle business, Xiaomi has struggled to scale production to meet order demand. |
| BABA | our Asian investments performed strongly with Alibaba and Jardine Matheson up 63% |
| GME | GameStop (-26%) |
| HIMS | Hims & Hers Health (-43%) |
| 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 | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||