| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 3.5% | -12.3% | -12.3% |
SGA's Emerging Markets Growth portfolio returned -12.1% gross in Q1 2026, underperforming the MSCI EM Index (-0.2%) due to limited participation in AI Hardware momentum and no exposure to outperforming energy and cyclical stocks. The portfolio's e-commerce and software holdings faced headwinds while geopolitical conflict in Iran disrupted markets in March. Despite fundamental execution remaining strong with portfolio companies delivering 14-15% revenue and earnings growth, sentiment-driven multiple contraction created performance headwinds. TSMC was the top contributor, benefiting from AI infrastructure demand and technological leadership. Major detractors included HDFC Bank, MakeMyTrip, and Sea Limited due to various company-specific and macro factors. The manager initiated Apollo Hospitals and added to several positions while trimming others. Portfolio now trades at unprecedented discount to market since 2014 inception despite robust business quality and growth trajectories. Manager expects rotation toward quality compounders as AI cycle matures and energy headwinds mount, positioning for attractive risk-adjusted returns ahead.
SGA builds high-conviction portfolios focused on quality growth businesses anticipated to achieve consistent mid-teens earnings growth with reduced variability, supported by predictable revenue and cash flow generation, designed to protect and reliably compound client wealth over time.
Manager expects conditions for meaningful rotation towards quality compounders are building as energy headwinds mount and AI investment cycle matures. Portfolio trades at discount to broader market that is nearly without precedent since 2014 inception, creating attractive setup for strong performance. High conviction in positioning to navigate turbulence ahead and deliver attractive risk-adjusted returns.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2026 | 2026 Q1 | 9983.T, APOLLOHOSP.NS, HDFCBANK.NS, INFY, MMYT, SE, TCS.NS, TOTVS3.SA, TSM, XP | AI, emerging markets, energy, Geopolitical, quality growth, semiconductors, valuation | - | SGA's EM Growth portfolio underperformed in Q1 2026 due to limited AI Hardware exposure and geopolitical disruption, despite strong fundamental execution by holdings. Portfolio trades at unprecedented discount to market since inception while delivering consistent mid-teens growth. Manager expects rotation toward quality compounders as conditions build for outperformance. |
| Feb 8 2026 | 2025 Q4 | 035420.KS, 0700.HK, 1299.HK, 1398.HK, 9983.T, BABA, BJFN, CPALL.BK, CPI.JO, FEMSA, GRAB, HDFCBANK.NS, HTHT, INFY, MELI, MMYT, OR.PA, SE, SLM.JO, TCS.NS, TME, TOTS3.SA, TSM, UL, WALMEX.MX, XP, YUMC | AI, Cyclical, E-Commerce, emerging markets, Quality, semiconductors, valuation |
TSM INFY 9983 JP BABA SE GRAB TME OR FP |
SGA's Emerging Markets Growth portfolio returned 22.8% net in 2025 but underperformed cyclical-driven benchmarks. The AI boom favored momentum stocks while quality growth faced headwinds. Portfolio trades at steepest ever discount to MSCI EM as quality factor hits historically depressed levels. SGA sees meaningful upside potential as valuations normalize for businesses with pricing power and recurring revenues. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIManager sees AI infrastructure spending continuing with hyperscalers investing $650B in 2026, up from $400B in 2025. Holds TSMC as the key beneficiary due to its monopoly on high-performance compute chip production. Avoids memory providers like SK Hynix and Samsung despite strong performance due to commodity-like pricing dynamics and supply increases. Views AI disruption concerns for IT services companies as overly simplistic. |
Semiconductors TSMC Memory Infrastructure |
SemiconductorsPortfolio has limited participation in AI Hardware trade through TSMC position only. Memory providers saw massive gains but manager questions pricing power as supply increases 50% in 2026. TSMC benefits from technological leadership and monopoly position in high-performance compute chips with disciplined capacity expansion. |
TSMC Memory Foundries AI | |
EnergyMilitary conflict in Iran disrupted energy markets, pushing Brent crude above $100 from $70. Energy stocks outperformed significantly in March. Higher oil prices pose headwinds for oil-importing economies in Southeast Asia and India, adding inflationary pressures and weighing on consumer spending. |
Oil Geopolitical Inflation Iran | |
E-commercePortfolio's e-commerce platform companies experienced broad-based weakness during the quarter. Sea Limited was a top detractor despite strong GMV growth due to margin pressure from elevated investments in logistics and fulfillment. Manager maintains conviction in long-term growth drivers across low-penetration markets. |
Sea Limited Southeast Asia Logistics | |
TravelMakeMyTrip faced supply-side constraints including aircraft shortages and regulatory issues disrupting domestic air travel. Macroeconomic pressures from rupee depreciation and Iran conflict reduced international travel demand. Manager liquidated position after quarter-end due to planned India listing creating holding company discount risks. |
India Airlines Regulation | |
| 2025 Q4 |
Live SportsMario Gabelli emphasizes live entertainment and sports as major investment themes, citing massive viewership numbers and recommending Atlanta Braves Holdings, Madison Square Garden Sports, and Manchester United as core positions. He views sports teams as increasingly attractive to institutional investors with significant upside potential. |
Sports Entertainment Media Valuation Teams |
MediaGabelli recommends Fox and Versant Media Group as media investments, highlighting Fox's sports broadcasting rights including NFL and World Cup coverage, along with strong buyback programs. Versant was recently spun off from Comcast and presents opportunities due to index fund selling pressure. |
Broadcasting Content Spinoffs Buybacks Sports Rights | |
Natural GasNational Fuel Gas is recommended based on its substantial mineral ownership in the Appalachian Basin overlying Marcellus and Utica shales. Gabelli sees unappreciated value in strategically located gas reserves near population centers, with potential for significant free cash flow generation. |
Utilities Energy Reserves Infrastructure Valuation | |
AIWhile acknowledging AI's transformative impact and comparing it to historical technological revolutions, Gabelli warns of potential disappointment for investors and draws parallels to the late 1990s tech boom. He expects AI-related stocks could face significant corrections. |
Technology Disruption Valuation Bubble Innovation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | TSM | Taiwan Semiconductor Manufacturing Co Ltd | Information Technology | Semiconductor Manufacturing | Bull | New York Stock Exchange | AI, CapEx, Foundry, Margins, semiconductors | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | INFY | Infosys Ltd | Information Technology | IT Services | Bull | National Stock Exchange of India | AI, cashflow, Itservices, Margins, Outsourcing | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | 9983 JP | Fast Retailing Co Ltd | Consumer Discretionary | Apparel Retail | Bull | New York Stock Exchange | Apparel, Branding, growth, Margins, supply chain | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | BABA | Alibaba Group Holding Ltd | Consumer Discretionary | E-Commerce | Bull | New York Stock Exchange | AI, cloud, ecommerce, Investment cycle, scale | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | SE | Sea Ltd | Consumer Discretionary | Internet Retail | Bull | New York Stock Exchange | ecommerce, Emerging markets, Fintech, Logistics, platform | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | GRAB | Grab Holdings Ltd | Industrials | Passenger Ground Transportation | Bull | NASDAQ | deliveries, Fintech, Margins, mobility, Provisions | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | TME | Tencent Music Entertainment Group | Communication Services | Interactive Media & Services | Bull | New York Stock Exchange | Competition, Content, Margins, monetization, Streaming | Login |
| Feb 8, 2026 | Fund Letters | HRISHIKESH (HK) GUPTA | OR FP | L’Oréal SA | Consumer Staples | Personal Care Products | Bear | Euronext Stock Exchange | Beauty, growth, innovation, Rotation, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| TSM | Taiwan Semiconductor Manufacturing Company (TSMC) was a top contributor to performance during the quarter as its central role in AI-driven semiconductor demand continued. The company delivered margins that proved more resilient than feared and management reaffirmed its outlook for roughly 30% revenue growth for the year. The company also raised its AI revenue growth outlook to a mid-to-high-50% CAGR through 2029, underscoring its integral role in accelerating AI infrastructure demand, and the positive outlook continued to be supported by a strong January sales report. TSMC's leadership in cutting-edge process nodes remains undisputed. Strategic steps to diversify manufacturing outside Taiwan, including new facilities in the U.S., Japan, and Germany, further strengthen TSMC's position. With its technology leadership, strong customer relationships, and disciplined execution, TSMC remains well-positioned to deliver strong double-digit revenue and earnings growth over the coming years, and we maintained our above-average weight position during the quarter. |
| XP | XP was a top contributor to performance during the quarter, supported by solid quarterly results that were largely in line with expectations. Revenue growth came in slightly better than anticipated, driven primarily by strength in issuer services, while EBIT margins were healthy. Net income was modestly below consensus, due to a somewhat higher tax expense, but overall results were viewed positively given stable retail net new assets. Management guided that 2026 should represent a stronger revenue growth year than 2025, driven by product rollout and business execution. We continue to view XP as an attractive long-term investment given its differentiated business and technology-enabled brokerage platform along with favorable positioning in Brazil's underpenetrated financial services market. |
| 9983.T | Fast Retailing was a top contributor to performance during the quarter, supported by solid operating execution across its geographically diversified business. Revenue is on track to increase 14-15% with operating income growing around 25% this year. Uniqlo China has also started growing with year-over-year margin improvement, leading to double digit operating income growth. Other international markets also performed well, and GU showed incremental improvement in profitability following a weaker prior year. We continue to view Fast Retailing as an attractive long-term investment given its scale driven competitive advantages, where a vertically integrated model and global supply chain enable efficient design, sourcing, and distribution. |
| HDFCBANK.NS | HDFC Bank was a top detractor from performance during the quarter following earnings as deposit growth fell short of market expectations. Sentiment was further pressured by the unexpected resignation of the bank's non-executive chairman, which contributed to elevated volatility despite swift action by regulators and the board to reaffirm confidence in the bank and the absence of any material operational, financial, or governance issues. Additional headlines related to legacy compliance matters added to near-term noise, despite appearing isolated and non-systemic in nature. Fundamentally, results were solid with net income up 12% backed by good asset quality. Given HDFC Bank's scale, brand strength, and long history of disciplined execution, we see the recent weakness as sentiment driven. |
| MMYT | MakeMyTrip (MMYT), India's largest online travel agency offering air, hotel, and bus bookings, was a detractor from performance during the quarter. While revenue was in line with expectations and the company continues to gain market share, supply-side constraints, including aircraft shortages and regulatory issues, disrupted the domestic air segment. Macroeconomic pressures, including rupee depreciation and the conflict in Iran, also weighed on sentiment by reducing demand for international travel and impacting dollar-reported earnings. However, management has also announced its strategic intent to list the company's Indian operations, which represent more than 95% of total business, on the Indian exchanges. Based on the valuation patterns of India listed holding companies, the holding company discounts typically average above 50%. As a result, we liquidated the position following the end of the quarter, and we plan to reassess the investment once the Indian business completes its expected IPO. |
| SE | Sea Limited, a leading consumer internet company operating in e-commerce, digital entertainment, and digital financial services across Southeast Asia and Latin America, was a top detractor from performance during the quarter. In the company's Q4 results EBITDA came in below already lowered expectations and FY26 guidance implied further near-term pressure on Shopee margins, despite stronger-than-expected GMV and revenue growth. Management guided to 25% FY26 Shopee GMV growth, above prior expectations, but higher investment spending suggests margins are likely to decline year-over-year, which remains a key driver of near-term stock performance. While profitability disappointed, the elevated investments in logistics, fulfillment, and ecosystem expansion are consistent with Sea's long-term strategy to deepen its localized competitive moat and lower shipping costs versus local peers. |
| APOLLOHOSP.NS | During the quarter we initiated a new position in Apollo Hospitals, India's largest private healthcare provider. The company is a pioneer of organized hospital care in India and operates an integrated healthcare model spanning hospitals, pharmacies, diagnostics, and digital health services. Apollo's core hospital business is anchored by its strong brand, broad specialty mix, and a highly tenured doctor network which supports its nationwide footprint. Apollo has a long runway for growth as healthcare demand in India continues to shift toward organized private providers, further underpinned by rising insurance penetration, focus on complex disease and procedures, and capacity expansion. The company's pricing power is driven primarily by case mix and higher-acuity procedures its scale, brand, and ability to attract top-tier physicians, who command higher fees and draw patients willing to pay a premium for quality care. |
| INFY | Companies perceived to be at risk from AI-related disruption remained under pressure. This impacted a number of our holdings including IT Services companies Infosys. However, we believe the market's current framing of AI winners and losers is overly simplistic and ultimately wrong. We continue to see these businesses as compelling long-term investments, because they are actively adapting in ways that reinforce their competitive advantages. Infosys is deeply embedded in their clients' digital transformation journeys, and the shift to AI is creating new demand for their services as enterprises rearchitect legacy systems. We have lowered weights in positions where the AI-overhang is unlikely to be disproved in the near-term, such as in the case of our positions in Infosys. |
| TCS.NS | Companies perceived to be at risk from AI-related disruption remained under pressure. This impacted a number of our holdings including IT Services companies TCS. However, we believe the market's current framing of AI winners and losers is overly simplistic and ultimately wrong. We continue to see these businesses as compelling long-term investments, because they are actively adapting in ways that reinforce their competitive advantages. TCS is deeply embedded in their clients' digital transformation journeys, and the shift to AI is creating new demand for their services as enterprises rearchitect legacy systems. We have lowered weights in positions where the AI-overhang is unlikely to be disproved in the near-term, such as in the case of our positions in TCS. |
| TOTVS3.SA | Companies perceived to be at risk from AI-related disruption remained under pressure. This impacted a number of our holdings including Brazilian ERP provider TOTVS. However, we believe the market's current framing of AI winners and losers is overly simplistic and ultimately wrong. We continue to see these businesses as compelling long-term investments, because they are actively adapting in ways that reinforce their competitive advantages. TOTVS's dominant position in Brazil's SMB software market gives it a unique opportunity to deliver AI-driven productivity gains to clients who are unlikely to build such capabilities in-house. |
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