| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.12% | 0% | 4.05% |
| 2025 |
|---|
| 4.1% |
FCL Capital delivered 16.88% returns in USD for 2025, outperforming the S&P 500, as their contrarian positioning in emerging markets finally paid off after years of underperformance. The fund's core thesis centers on copper as an indirect play on AI and energy transition, building positions in diversified copper miners trading at traditional commodity multiples despite exposure to revolutionary demand drivers. FCL estimates AI data centers will require 500-700 thousand tonnes of copper by 2030, while electric vehicles and renewable energy create additional structural demand against constrained supply. The letter critiques Brazilian investors' false belief in risk-free CDI returns, noting zero USD returns over the past decade, and warns of expensive US tech valuations. Looking forward, FCL sees tokenization and prediction markets as emerging opportunities for 2026, while maintaining overweight positions in China, Brazil, and emerging markets. The fund emphasizes real asset allocation and warns that astronomical returns typically steal from subsequent periods through elevated starting valuations.
FCL Capital identifies value opportunities at the intersection of transformative themes and undervalued assets, particularly copper miners as indirect plays on AI and energy transition, while warning against false safety in Brazilian fixed income and expensive US tech valuations.
FCL expects continued opportunities in undervalued markets and themes, particularly copper miners as indirect AI plays. They remain constructive on emerging markets while becoming more open to US tech themes. The fund anticipates tokenization and prediction markets will create new investment opportunities in 2026.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | 0700.HK, 1211.HK, 6367.T, AAPL, FCX, GLEN.L, HBM.TO, HDB, KGH.WA, KWEB, MSFT, NVDA, SCCO, TSLA | AI, Brazil, Copper, crypto, emerging markets, Energy Transition, technology, value | - | FCL delivered 16.88% USD returns in 2025 by positioning in undervalued copper miners as indirect AI plays. The fund built diversified copper exposure expecting structural demand from data centers, EVs, and renewables against constrained supply. FCL warns Brazilian investors about false CDI safety and expensive US tech valuations while anticipating tokenization opportunities in 2026. |
| Sep 30 2025 | 2025 Q3 | 1211.HK, AAPL, AMZN, ASML, BKNG, CHGG, GOOGL, META, MSFT, NVDA, ORCL, TSLA, TSM | AI, ASML, China, Investment, Lithography, semiconductors, technology | - | FCL Capital positions for the AI revolution through ASML, the monopoly provider of advanced lithography machines essential for cutting-edge semiconductors. While AI hype inflates valuations across the ecosystem, ASML offers the widest technological moat with 20% expected annual growth through 2030. The fund delivered 19.5% YTD returns in USD, benefiting from Chinese corporate governance improvements and selective technology exposure. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
ConcentrationU.S. equity market concentration has reached extreme levels with the ten largest S&P 500 constituents accounting for over 40% of index weight. This concentration creates challenges for risk management and alpha generation in actively managed portfolios. The concentration is driven by both expanding valuations and growing earnings share of the largest companies. |
Market Structure Index Weight Risk Management Alpha Generation Portfolio Construction |
RiskConcentration has led to increased volatility contribution from the largest stocks, now accounting for over 50% of S&P 500 volatility. The distribution of betas has widened significantly, creating challenges for traditional risk models. Existing risk management approaches may be unprepared for this uneven distribution of market exposures. |
Volatility Beta Distribution Risk Models Market Exposure Portfolio Risk | |
AIBreakthroughs in artificial intelligence have helped drive strong performance in mega cap technology stocks, contributing to increased market concentration. AI is identified as one of the key technological drivers behind the outperformance of the largest companies in recent years. |
Technology Mega Cap Performance Innovation | |
| 2025 Q3 |
AIFCL dedicates significant analysis to artificial intelligence, viewing it as transformational technology that could fundamentally alter economic logic with potential for 30-50% annual global growth. The firm discusses AI's evolution from Deep Blue defeating Kasparov to AlphaGo's creative moves, highlighting both extraordinary opportunities and existential risks including potential human extinction scenarios. |
Machine Learning Superintelligence Automation Innovation Disruption |
SemiconductorsThe letter extensively covers the semiconductor ecosystem, particularly focusing on lithography as the critical bottleneck. FCL emphasizes how chip complexity continues following Moore's Law, requiring ever-more sophisticated manufacturing processes, with EUV lithography representing an unassailable technological moat. |
Lithography EUV Chip Manufacturing Moore's Law Fabrication | |
ChinaFCL views recent Chinese corporate governance improvements as highly encouraging, particularly the April 2024 guidelines endorsing share buybacks. The firm sees China's anti-involution campaign and focus on practical AI applications in manufacturing as positive developments supporting the current bull market. |
Corporate Governance Buybacks Manufacturing Bull Market Policy Reform |
| 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. |
| 1211.HK | The contributors in returns in 2025 came from BYD Co Ltd, American Express Co, and Bank of America Corp. Similarly with BYD, the thesis is simple. It has the most integrated operations and lowest costs. Yes, there is currently a price war but that means that BYD can drive much-needed consolidation in China and perhaps beyond. Moreover, with its low-cost structure, BYD can choose to return the industry to profitability when it wants. |
| 6367.T | We added to our positions in Daikin, a global leader in air conditioning systems, on valuation. |
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| FCX | Freeport McMoRan was able to recover the share price drawdown seen in September following a major mudflow event at their Grasberg mine, which resulted in a full suspension of production and a material cut to guidance. The share price finished 2025 at its high. |
| GLEN.L | Glencore also contributed as commodity markets remained firm. |
| HBM.TO | Listed as one of the top 5 components of COPX with forward P/E ratio shown in chart |
| KGH.WA | Listed as one of the top 5 components of COPX with forward P/E ratio shown in chart |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| SCCO | Listed as one of the top 5 components of COPX with forward P/E ratio shown in chart |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
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