| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global equity markets staged a remarkable recovery in Q2 2026, with the MSCI All Country World Index rising 14.9% as geopolitical tensions in the Middle East eased and oil prices retreated. The AI investment cycle continued to broaden beyond technology into semiconductors, data centers, and industrial automation, supporting strong performance in Taiwan and South Korea. Growth stocks outperformed as technology earnings reinforced investor confidence, while emerging markets were standout performers with 24.1% quarterly gains. Despite elevated headline inflation and a higher-for-longer interest rate environment, economic activity remained resilient with healthy labor markets and strong corporate earnings. Fixed income markets delivered positive returns and provided valuable diversification. The first half of 2026 reinforced the importance of maintaining diversified exposure across investment styles, market capitalizations, and geographic regions rather than concentrating in a single theme. Looking ahead, volatility is expected to persist, but long-term growth drivers including AI innovation remain intact.
Markets delivered strong returns in Q2 2026 as geopolitical tensions eased and corporate earnings remained resilient, demonstrating that markets rarely wait for uncertainty to subside before moving higher.
Volatility is expected to remain part of the investment landscape as inflation remains above target in major economies, interest rate expectations continue to evolve, and geopolitical risks remain present. However, long-term drivers of economic growth remain intact, particularly innovation in artificial intelligence and digital infrastructure. The key lesson for investors is that portfolios should be built to withstand uncertainty, and staying invested through periods of volatility remains one of the most reliable ways to build lasting wealth.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 9 2026 | 2026 Q2 | - | AI, diversification, emerging markets, energy, growth, inflation, semiconductors | - | Global equities surged 14.9% in Q2 2026 as Middle East tensions eased and oil prices fell. AI investment broadened beyond technology, driving strong performance in semiconductor-heavy markets like Taiwan and South Korea. Emerging markets led with 24.1% gains while growth stocks outperformed on strong tech earnings. Despite persistent inflation and higher-for-longer rates, economic resilience and corporate earnings strength supported the rally across diversified exposures. |
| Apr 16 2026 | 2026 Q1 | - | diversification, energy, Geopolitical, inflation, value, volatility | - | Geopolitical shocks drove oil from $72 to $100, triggering inflation concerns and equity market declines. A sharp style rotation favored value over growth and small-caps over large-caps. Fixed income provided stability while diversification proved essential. Ongoing geopolitical risks and sticky inflation suggest continued volatility, but dispersion is creating opportunities for balanced portfolios. |
| Jan 15 2026 | 2025 Q4 | NVDA | AI, Central Banks, diversification, Dollar, emerging markets, fixed income, global, Trade Policy | - | 2025 proved the power of global diversification as international markets crushed US performance, with emerging markets up 33.6% and developed ex-US up 31.9% versus US equities at 17.3%. AI themes broadened beyond mega-caps while trade tensions eased. Dollar weakness amplified international returns. Outlook for 2026 remains constructive across regions and sectors. |
| Oct 20 2025 | 2025 Q3 | - | AI, equities, fixed income, global, Markets, rates, Trade Policy | - | Global markets posted strong Q3 gains driven by AI optimism, Fed rate cuts, and easing trade tensions. US equities delivered best quarter since 2020 while emerging markets surged on China stimulus hopes. Despite government shutdown and fresh tariff threats creating near-term volatility, fundamentals remain solid with supportive monetary policy and resilient earnings growth. |
| Jul 17 2025 | 2025 Q2 | DPLM.L, HARV.HE, LOTB.BR, POOL | Compounding, Europe, growth, Quality, Roiic | - | European quality-focused fund delivered +10.08% YTD despite FX headwinds, with portfolio companies growing EBITA per share +14.8% through high incremental returns on invested capital. Manager maintains fully invested stance targeting sustainable compounders with 20%+ ROIIC, emphasizing proper capital allocation and free cash flow measurement over financial engineering for long-term double-digit returns. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI investment cycle continues to broaden beyond technology into semiconductors, data centers, cloud infrastructure, power generation and industrial automation. Strong earnings from technology companies reinforced investor confidence. Markets such as Taiwan and South Korea benefited from their critical roles in the global semiconductor supply chain. |
Semiconductors Data Centers Cloud Taiwan South Korea |
OilOil prices declined to around USD 70 per barrel by end of quarter as tensions in the Middle East eased and negotiations between the US and Iran progressed. OPEC+ announced a modest production increase. Concerns of sustained supply disruption eased considerably, helping alleviate fears of renewed inflation surge. |
Energy Middle East OPEC Inflation Iran | |
InflationHeadline inflation remained elevated in many economies, but underlying inflation pressures were generally more stable. Central banks maintained a cautious approach with the Fed keeping rates unchanged and the ECB raising rates. Market expectations shifted towards a higher-for-longer interest rate environment. |
Rates Fed ECB Central Banks | |
Emerging MarketsEmerging Markets were the standout performers, extending strong momentum from 2025, rising 24.1% in Q2 and 23.9% year-to-date. Performance was broad-based across regions and EM delivered competitive returns despite the resurgence of large-cap growth stocks. |
Asia Latin America Performance | |
GrowthGrowth stocks regained momentum as strong earnings from technology companies reinforced investor confidence. The MSCI ACWI Growth Index rose 19.8% in Q2, outperforming value stocks. Large-cap stocks also outperformed during the quarter. |
Technology Large Cap Earnings | |
| 2026 Q1 |
GeopoliticalHeightened tensions in the Middle East, US intervention in Venezuela, and disputes over Greenland dominated headlines. US and Israeli strikes on Iran triggered closure of the Strait of Hormuz, causing oil prices to surge from $72 to over $100 per barrel before pulling back to $96 following ceasefire announcement. |
Iran Middle East Oil Sanctions |
EnergyEnergy supply shock from geopolitical conflicts drove brent crude from $72 to over $100 per barrel during the quarter. Higher energy prices fed directly into headline inflation, complicating central bank policy decisions and contributing to market volatility. |
Oil Natural Gas Inflation Volatility | |
ValuePronounced style rotation saw value stocks materially outperform growth stocks. The MSCI ACWI Value Index rose 1.2% while Growth fell 7.7%. Over five years, value achieved similar returns to growth but with meaningfully lower volatility and less downside risk. |
Value Growth Volatility Risk | |
| 2025 Q4 |
AIAI has been integrated into RGA's research process over three years, serving as force multipliers for human judgment rather than replacements. The firm uses AI tools like NotebookLM, Gems in Gemini, and Claude Code for efficiency and risk analysis. While acknowledging AI's transformative potential, they believe current market narratives swing to unhelpful extremes, creating investment opportunities. |
Artificial Intelligence Machine Learning Automation Technology Research Tools |
SoftwareSoftware companies face structural headwinds from AI lowering barriers to entry and increasing customer bargaining power. Many companies have been running with excess headcount and may experience pricing pressure that can be countered with lower costs to serve. The market is pricing in these headwinds as evidenced by significant downward re-rating of major financial data and software providers. |
Software Technology Pricing Pressure Competition Barriers to Entry | |
SemiconductorsLattice Semiconductor represents an under-appreciated AI winner with immediate gains and longer-term optionality. The company's focus on efficiency rather than maximal performance positions it favorably for AI servers, particularly in security functions as Root of Trust chips. FPGAs are valuable for security due to their programmability and ability to chase moving targets. |
Semiconductors FPGAs AI Infrastructure Security Efficiency | |
LogisticsAmazon's logistical prowess represents one of the foremost moats in business today and can be enhanced with AI. The company is uniquely positioned to dominate the coordination layer across its entire logistics network through better orchestration of assets and buildout of more sophisticated robotics. |
Logistics Supply Chain Automation Robotics Coordination | |
| 2025 Q3 |
AIContinued enthusiasm for AI drove strong performance in growth stocks and technology sectors. AI-related themes fueled investor appetite and contributed to the best third quarter performance for major US indices since 2020. |
Technology Growth Innovation Semiconductors Software |
Trade PolicyTrade tensions eased during Q3 as negotiations progressed and retaliatory threats diminished, supporting rotation into international equities. However, President Trump threatened fresh tariffs on China over rare earth export controls, maintaining uncertainty despite market adaptation to higher tariffs. |
Tariffs China International Policy Negotiations | |
RatesCentral bank rate decisions shaped market dynamics with the Fed restarting its rate-cutting cycle in September with a 25bp cut. The ECB held steady at 2.0% while the Bank of England cut to 4.0% in August, signaling gradual easing approaches across major economies. |
Federal Reserve ECB Bank of England Monetary Policy Easing | |
| 2025 Q2 |
QualityThe manager emphasizes sustainable quality compounding with focus on companies achieving high returns on incremental invested capital (>20/25%). They stress the importance of measuring free cash flow performance, proper capital allocation, and management understanding of ROIIC frameworks for long-term value creation. |
ROIIC Compounding Cash Flow Capital Allocation Value Creation |
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