| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.1% | 5.7% | 39.1% |
| 2025 | 2024 |
|---|---|
| 39.1% | 7.2% |
The Brandes International Equity Strategy delivered strong performance in Q4 2025, rising 5.67% net and outperforming the MSCI EAFE Index. For the full year, the strategy returned 39.13% net, significantly outperforming the benchmark's 31.22% return. Key contributors included emerging market holdings led by Samsung Electronics, Cemex, and Taiwan Semiconductor, benefiting from AI infrastructure demand and robust construction activity. The portfolio initiated positions in three UK companies: Mondi (packaging), National Grid (utilities), and Diageo (beverages), while exiting long-held positions in Mitsubishi UFJ and Tesco. Despite strong performance, international value stocks continue trading at historically attractive valuations relative to growth stocks across multiple metrics. The portfolio maintains overweights in consumer staples, healthcare, and consumer discretionary, with geographic focus on Europe and select emerging markets including Mexico, South Korea, and Brazil. Management remains optimistic about prospects, believing the strategy is well-positioned for continued rotation toward value and international equities.
International value stocks remain attractively valued despite strong 2025 performance, with the portfolio well-positioned to benefit from continued rotation toward value and international equities while maintaining exposure to secular growth themes in emerging markets and energy transition.
Looking ahead, we remain optimistic about the prospects of our holdings. We believe the strategy is well-positioned to benefit if there is a continued rotation toward value and international equities. Despite the strong rebound, international value stocks continue to trade at historically attractive valuations relative to growth stocks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | 005930.KS, 1876.HK, 4503.T, 8306.T, BABA, BNP.PA, CX, DGE.L, DPW.DE, EBS.VI, ERJ, GRF.MC, GSK, HEI.DE, KER.PA, MNDI.L, NG.L, ORA.PA, OTEX.TO, RI.PA, TSCO.L, TSM | emerging markets, Europe, international, Outperformance, packaging, Utilities, value |
MNDI LN NG LN TSCO LN |
International value stocks continue to trade within the least expensive valuation quartile relative to growth stocks since style indices inception. The valuation gap is evident across multiple metrics including price/earnings, price/cash flow, and enterprise value/sales. Historically, such discount levels often preceded attractive relative returns for value stocks over subsequent three- to five-year periods. Exposure to emerging markets helped returns, led by South Korean Samsung Electronics, Mexico's Cemex, and Erste Group Bank operating across emerging Europe. Leading contributors for the year included emerging market holdings such as Alibaba, Samsung, Taiwan Semiconductor, Brazil's Embraer and Mexico-based Cemex. The portfolio continues to have larger weighting to select emerging markets, particularly Mexico, South Korea, and Brazil. National Grid has strategically repositioned its asset base toward electricity networks, reducing exposure to gas and aligning with long-term energy transition trends. Over the past decade, roughly 75% of its regulated asset base is in electricity, expected to rise to 80% by 2029, supported by structural growth in electrification and renewable integration. The company's position as a critical enabler of decarbonization provides attractive risk-adjusted returns. Mondi is a leading European producer of corrugated packaging, containerboard, kraft paper, and uncoated fine paper with strong presence in Eastern and Western Europe. Secular trends such as sustainability, convenience, and the shift from plastic to paper underpin steady growth in fiber-based packaging. The company's cost leadership, strong positioning in high-barrier-to-entry kraft paper market, and integrated operations provide competitive advantage. |
| Oct 24 2025 | 2025 Q3 | 6273 JP, CAP FP, TSM | AI, emerging markets, Europe, International Equities, value |
SMC JP SMC JP |
The fund outperformed, led by holdings in AI-linked firms such as Alibaba, Samsung, and TSMC, and value recovery across Europe and Asia. Managers emphasize international value equities as historically undervalued versus growth peers. They highlight cyclical improvement and attractive valuations across consumer, industrial, and technology sectors. |
| Jul 22 2025 | 2025 Q2 | BABA, RR/ LN, SAN FP, STMPA FP | currencies, diversification, fundamentals, international, Valuation gap | - | The letter underscores attractive valuations outside the U.S. driven by currency weakness and pessimism. Management favors fundamentally strong international businesses trading at discounts to intrinsic value. International equities are positioned as a source of diversification and return potential. |
| Mar 31 2025 | 2025 Q1 | 7201 JP, BNP FP, CAP FP, ERJ, ISP IM, KER FP, RI FP, RR/ LN, STM, WPP | - | - | |
| Dec 31 2024 | 2024 Q4 | MKS LN, STM | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value |
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 | |
PackagingMondi is a leading European producer of corrugated packaging, containerboard, kraft paper, and uncoated fine paper with strong presence in Eastern and Western Europe. Secular trends such as sustainability, convenience, and the shift from plastic to paper underpin steady growth in fiber-based packaging. The company's cost leadership, strong positioning in high-barrier-to-entry kraft paper market, and integrated operations provide competitive advantage. |
Sustainability Paper Containerboard Europe Integration | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 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 |
| 2025 Q2 |
InternationalHigh-quality international businesses trade at fractions of US multiples, with the manager positioning clients to take advantage of this divergence. Despite US equity market dominating investor mindshare, the rest of the world returned 32.6% in dollar terms in 2025 versus SPY's 17.7%. |
Discount Opportunity Outperformance Quality Positioning |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 24, 2025 | Fund Letters | Jeffrey Germain | SMC JP | SMC Corporation | Energy | Machinery | Bull | NYSE | Automation, balance sheet, Industrials, manufacturing, Margins, Pneumatics, Value | Login |
| Oct 24, 2025 | Fund Letters | Jeffrey Germain | SMC JP | SMC Corporation | Energy | Machinery | Bull | NYSE | Automation, balance sheet, Industrials, manufacturing, Margins, Pneumatics, Value | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | MNDI LN | Mondi plc | Materials | Containers & Packaging | Bull | New York Stock Exchange | Container board, Cyclicality, Margin recovery, Packaging, Sustainability | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | NG LN | National Grid plc | Utilities | Electric Utilities | Bull | New York Stock Exchange | CapEx, Decarbonization, Electrification, Inflation Protection, Regulated utilities | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | TSCO LN | Tesco plc | Consumer Staples | Food Retail | Bear | New York Stock Exchange | Competition, grocery retail, Margins, turnaround, Valuation Discipline | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 1876.HK | For Budweiser Brewing APAC, soft demand in key Asian markets hurt market sentiment, along with competitive pricing pressures. Despite near-term volatility, we see structural growth opportunities from premiumization and evolving consumption trends in emerging markets. |
| 4503.T | Astellas Pharma benefited from resilient pharmaceutical demand and investor confidence in its pipeline. |
| 8306.T | MUFG is the largest and most diversified Japanese financial group |
| 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. |
| BNP.PA | Paris-based bank serving commercial, retail, investment, private and corporate banking services internationally |
| CX | Meanwhile, construction materials firm Cemex advanced on robust construction activity and a favorable currency backdrop. |
| DGE.L | Diageo represents one of the clearest examples of brands crystallising into cornered resources. Its leading spirits brands are reinforced by production realities that competitors cannot accelerate, most notably long-dated ageing inventories and protected geographic areas of distribution. A rival can copy a label, but it cannot replicate decades of maturing whisky stock or compress centuries of brand heritage into a marketing cycle. This combination of time-based scarcity and cultural embeddedness gives Diageo durable pricing power that is unusually resilient through economic cycles. In Helmer's terms, the brand ceases to be merely persuasive and instead becomes an independently owned, scarce asset that underpins long-term returns on capital. That said, recent demand following a Covid-led surge has softened, particularly in South America. It will be the job of Sir Dave Lewis—the former Tesco turnaround CEO, to reintroduce a greater cost discipline across the business and ensure their leading global brands are well positioned for the evolving landscape of consumer tastes. |
| DPW.DE | Deutsche Post, the German diversified logistics company, was also strong following resilient earnings despite tariff-related challenges, driven by robust pricing power and cost control. |
| EBS.VI | Erste Group Bank, a leading retail and commercial bank in Central and Eastern Europe, was the top contributor during the quarter. The company reported strong operating performance, driven by healthy loan growth across core markets, resilient net interest income, and solid fee income, with contributions from securities, asset management and payments. During the quarter, Erste cleared key milestones related to its previously announced acquisition of a 49% stake in Santander Bank Polska. |
| GSK | Glaxo is one of the world's leading pharmaceutical companies. Its share price has been stagnant for years despite solid earnings growth, and on 10x earnings, it excites us. |
| HEI.DE | I followed this global cement company for many years, but only first bought the stock around the time Greenfield started managing money in September 2021. The stock had been falling when we purchased it around €65, representing about 8 times earnings. It continued to fall and in April 2022 I wrote a blog about the industry. The stock continued falling all the way to about €40 in September 2022, equating to just 5 times earnings. Since then, the stock has been on a steady climb to €222 or about 17 times earnings, making it our highest contributing investment. We trimmed the stock a few times, but it remains a large investment. I believe the company will benefit from investment in and upgrading of infrastructure around the world. New bridges, highways, dams, tunnels, airports, ports, pipes, and railways require a lot of cement. |
| KER.PA | Shares like Kering (Gucci, Saint Laurent, Bottega Veneta) |
| MNDI.L | Mondi is a leading European producer of corrugated packaging, containerboard, kraft paper, and uncoated fine paper. Currently, Mondi is out of favor due to a prolonged downturn in the European containerboard market, driven by oversupply and weak demand since 2022. Despite these near-term challenges, Mondi offers an attractive long-term opportunity. |
| NG.L | National Grid is one of the world's leading regulated utilities, responsible for electricity transmission and distribution in Great Britain and electricity and gas networks in the northeastern United States. Despite its strong fundamentals, National Grid is currently out of favor, weighed down by weak U.K. macro sentiment and concerns over interest rates. |
| ORA.PA | Multi-national telecommunications network operator, sold Spain into a 50/50 JV in 2024 |
| OTEX.TO | OpenText released decent earnings on November 5, but apparently not good enough. OpenText was sold because of deteriorating dividend growth. While the company remains a significant player in the information management space, its latest dividend increase in September 2025 was just 4.8%. |
| RI.PA | Pernod Ricard declined due to concerns about slowing global spirits demand. While these headwinds persist, we remain confident in Pernod's strong brand portfolio and pricing power, which should support long-term prospects. |
| TSCO.L | Tesco, a UK-based multinational grocery and retail company operating a leading supermarket chain. Now one of our top 10 holdings in the portfolio, Tesco continues to benefit from its scale advantages and price leadership, which have allowed it to gain market share despite a competitive environment and a UK consumer backdrop that remains value conscious. At the same time, margin contributions from initiatives in retail media and continued share repurchases support earnings growth without requiring an improvement in consumer spending. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
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