| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
Stewart Investors completed a strategic transition to FSSA Investment Managers in Q4 2025, maintaining their long-term, quality-focused investment approach across Asian and emerging market strategies. The team is optimistic about the outlook, adding to Chinese holdings like Tencent where they find strong competitive advantages at reasonable valuations, while reducing exposure to expensive Indian cyclicals. Key contributors included Samsung Electronics and TSMC, benefiting from AI-related semiconductor demand and memory upcycles extending into 2026. The team maintains a conservative approach to AI themes, avoiding momentum-driven investments while selectively benefiting through quality holdings. Portfolio changes tilted toward companies with stronger cash generation and better long-term growth prospects. Despite geopolitical uncertainties and tariff concerns, emerging markets delivered robust performance reflecting longer-term structural shifts. Current portfolio valuations remain attractive with expectations for low double-digit earnings growth and 20% average returns on equity. The team expects their quality-focused approach to generate attractive shareholder returns as markets broaden beyond narrow AI focus.
Focus on identifying quality companies with exceptional cultures, strong franchises and resilient financials that can deliver attractive returns over much longer periods than the market expects, particularly in Asian and emerging markets where valuations look attractive compared to developed markets.
The team is optimistic about Asian and emerging market equities, expecting earnings to grow at low double-digit rates with circa 20% average returns on equity. They believe current portfolio valuations remain attractive and expect companies to generate more cash and return it to shareholders. While acknowledging uncertainty around AI themes, they are confident their quality holdings will translate into attractive shareholder returns as markets broaden over time.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 5 2026 | 2025 Q4 | 005930.KS, 0700.HK, 2379.TW, 2454.TW, 6503.T, ALC, BABA, BAJAJHLDNG.NS, BAP, BOSCHLTD.NS, CARTRADE.NS, CTAS, KEI.NS, KOTAK.NS, M&M.NS, NU, PRX.AS, QUAL3.MX, SE, TARSONS.NS, TECHM.NS, TOTVS3.SA, TSM, TUBEINVEST.NS, WEG3.SA | AI, Asia, China, emerging markets, India, long-term, Quality, semiconductors | - | The team maintains a conservative approach to AI-driven market themes, avoiding flavour-of-the-month AI investments while selectively benefiting from AI demand through quality holdings like Samsung… |
| Jan 1 2025 | 2024 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
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 |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
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 | |
IndiaIndia combines sustained economic growth, rising formalization, deepening capital markets, and a growing pool of well-run, founder-led businesses with long reinvestment runways. The economy has grown from about $1 trillion to around $4 trillion over roughly 17 years, with credible estimates suggesting it could roughly quadruple over the next 15-20 years. India has moved from the periphery to the center of global equity markets as the fourth-largest listed market in the world. |
Formalization Capital Markets Growth Emerging Markets | |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 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. |
| 2454.TW | MediaTek is Taiwan's leading chip designer, forming a duopoly in the smartphone market with Qualcomm. Stable pricing and cash generation support the business, while artificial intelligence growth potential through its partnership with Google is underappreciated by the market. |
| 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. |
| CTAS | During the quarter, we initiated new positions in two companies – Cintas Corp (CTAS) and Marvell Technology Inc. (MRVL). Cintas is the nation's largest uniform rental and facility services provider serving around 1 million customers. We are attracted to the company's strong execution, potential for continued growth in the future, return profile, and current valuation leading us to initiate a new position in the stock. |
| NU | Since our mid-year update, Nubank's shares increased 37%, bringing full-year performance to +63%. This performance has been driven primarily by fundamentals, with earnings growing approximately 42% over the same period. Brazil remains a powerful profit engine, with high customer engagement, improving risk-adjusted returns, and expanding penetration across consumer and SME banking. Mexico continues to emerge as the next major growth vector: customer penetration has reached ~14% of the population. |
| PRX.AS | Prosus is a core, long-term holding primarily valued for its substantial stake in Tencent, a company we believe has significant growth potential and a strong global competitive advantage. A key element of our thesis is that Prosus's current market capitalization is less than the value of its Tencent holding alone. In addition to the Tencent stake, Prosus holds an estimated $35 billion in other listed and unlisted assets. |
| SE | During the quarter, we initiated a new position in Sea Limited, a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. |
| 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. |
| TUBEINVEST.NS | Tube Investments of India was the largest detractor from performance, as it reported sluggish business performance and rising competition in the electric vehicle (EV) space. Despite its early mover advantage, Tube has struggled to maintain market share. On a positive note, the core business is stable with robust returns on capital employed, and it generates healthy free cash flow which is being invested in new businesses with high returns potential. |
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