| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.23% | -5.41% | -5.41% |
The abrdn International Small Cap Active ETF underperformed its benchmark in Q1 2026, declining 5.41% versus the benchmark's 0.48% decline, due to stock selection and sector allocation challenges. Key detractors included CTS Eventim amid business momentum concerns, Jungheinrich following weak order data, and Baycurrent after competitive software releases. Positive contributors included GTT benefiting from rising gas prices during Middle East conflict, Elite Materials on solid results, and Chroma ATE on EV and semiconductor demand. The manager executed a strategic rotation away from cyclical industrials toward defensive growth names with structural tailwinds, initiating positions in defense contractor Avon Technologies, infrastructure services provider Ventia, mining technology firm IMDEX, Brazilian homebuilder Cury, Danish bank Ringkjobing Landbobank, gold producer Pan African Resources, and healthcare diagnostics provider Fleury. Looking forward, the manager expects continued volatility from Middle East geopolitical tensions and maintains focus on high-quality businesses with strong balance sheets, earnings visibility, and positive momentum while monitoring valuation discipline in a higher-for-longer rate environment.
Rotation from cyclical industrials to defensive growth companies with structural tailwinds in infrastructure, mining, healthcare and defense, focusing on high-quality businesses with strong balance sheets and earnings visibility.
Manager expects both direct economic effects and broader geopolitical implications from Middle East conflict to influence market sentiment and risk premia. Focus remains on high-quality businesses with well-capitalised balance sheets and strong earnings visibility, supported by structural growth themes. Continue to tilt portfolio towards stocks demonstrating positive price and earnings momentum while actively monitoring valuation discipline given higher-for-longer rate environment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 21 2026 | 2026 Q1 | 2360.TW, 3374.TW, AVON.L, CURY3.SA, EVD.DE, FLRY3.SA, GTT.PA, IMD.AX, JUN3.DE, PAN.JO, RILBA.CO, VNT.AX | defense, Defensive, healthcare, infrastructure, international, Mining, small caps | - | Fund rotated from cyclical industrials to defensive growth themes including defense, infrastructure, mining, and healthcare amid Middle East geopolitical tensions. New positions include defense contractor Avon Technologies and infrastructure provider Ventia. Manager focuses on high-quality businesses with strong balance sheets and structural growth tailwinds while monitoring valuations in higher-for-longer rate environment. |
| Jan 29 2026 | 2025 Q4 | GAW.L, RNK.DE | AI, defense, gaming, infrastructure, international, Japan, small cap, Taiwan | - | abrdn's international small cap fund delivered strong 17% annual returns despite Q4 underperformance. The quality-focused strategy targets companies with strong balance sheets and earnings visibility, benefiting from AI demand and defense spending. New positions in Chinese lens manufacturer Shanghai Conant and marine services provider HD Hyundai Marine Solution reflect conviction in sector-specific growth opportunities heading into 2026. |
| Oct 28 2025 | 2025 Q3 | CYBR, INDA | Asia, emerging markets, Europe, international, Quality, small caps |
CTS GR JUN3 GR DNP PW |
abrdn's international small-cap fund underperformed in Q3 due to stock selection, with key detractors including CTS Eventim and Dino Polska offset by takeover targets like Alpha Group. The manager expects markets are entering early recovery favoring low-quality stocks initially, but believes small-cap outperformance will sustain given superior diversification, growth potential, and attractive valuations amid rate cuts. |
| Jul 27 2025 | 2025 Q2 | 3374.TW, 6544.T, 6963.TW, 7164.T, CHG.L, FOUR.L, FPT.VN, GTT.PA, ITP.PA, POLYMED.NS, RNK.DE | defense, Geopolitical, global, Japan, small caps, Taiwan, Trade Policy |
TSE:6544 6544.T RNK.DE CHG.L |
The fund outperformed through stock selection, benefiting from Japanese elevator services, Taiwanese AI-related materials, and French LNG solutions. New defense positions target European spending increases. Tariff volatility and Middle East tensions created market uncertainty, though temporary trade agreements and ceasefires provided relief. The strategy remains focused on market-leading small caps with long-term growth potential. |
| Mar 31 2025 | 2025 Q1 | 3374.TWO, CTS.DE, DNP.WA, FPT, GAMA.L, GTT.PA, SWECO-B.ST | Asia, Europe, international, Quality, small caps, tariffs, Trade Policy |
2308.TW SWECO-B.ST |
abrdn's international small cap fund underperformed in Q1 amid trade policy uncertainty, with Vietnamese and UK holdings weighing on returns while European names outperformed. The manager reduced tariff-sensitive exposure and focuses on quality companies with pricing power and supply chain flexibility, believing small caps may outperform given domestic focus and attractive valuations. |
| Jun 30 2024 | 2024 Q2 | 7936.T, BESI.AS, CVSG.L, FPT.HM, GFREGIO.MX, HILS.L, ITP.PA, NOVA, RAA.DE, YOU.L | AI, international, Japan, small caps, technology, Valuations | - | abrdn's international small-cap fund outperformed in Q2 2024 on strong stock selection, particularly in AI-exposed names like FPT Corporation and quality Japanese companies like ASICS. Small-cap valuations remain attractive relative to expensive large caps. The manager focuses on high-quality companies with resilient earnings while navigating risks from political uncertainty and potential currency reversals. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
DefenseFund initiated position in Avon Technologies, which designs and manufactures mission-critical protective equipment for military and law enforcement. Company enjoys patented technology with long-duration contracts from US Department of Defence and NATO driving record order book and strong profitability. |
Defense Military Protection |
InfrastructureFund added Ventia Services Group, which provides essential infrastructure and maintenance services across Australia and New Zealand for government and blue-chip customers. Manager believes company is well positioned with inflation-protected contracts and high renewal rates. |
Infrastructure Maintenance Government | |
Critical MineralsFund initiated position in IMDEX, which supplies mining-technology tools. Manager likes the stock for rental-led recurring revenues buoyed by exploration and critical-minerals tailwinds. |
Mining Technology Exploration | |
GoldFund added Pan African Resources, an Africa-focused mid-tier gold producer with mix of low-cost surface operations and higher-grade underground mines. Manager likes the stock for step-change in production and cash flow enabling rapid deleveraging. |
Gold Mining Africa | |
| 2025 Q4 |
TechnologyThe Fund invests at least 80% of net assets in technology companies across multiple sub-industries including IT consulting, internet services, application software, communications equipment, semiconductors, and interactive media. The portfolio focuses on companies with sector-leading cash flows, attractive valuations, and sustainable profitability prospects. |
Software Hardware Semiconductors Internet Communications |
| 2025 Q3 |
Small CapsSmall caps have been performing well in the current environment characterized by interest-rate cuts. Given greater geographic and sector diversification, higher growth potential and lower valuations, the manager believes small-cap outperformance can sustain. |
Small Caps Outperformance Valuations Growth |
QualityThe manager maintains focus on high-quality companies with well-defined strategies for growth over the medium to long term. They expect a shift from low-quality recovery to fundamentally driven, higher-quality companies outperformance. |
Quality Fundamentals Strategy Growth | |
Data CentersElite Material, a manufacturer of copper-clad laminate used in data centre circuit boards, performed well after management increased guidance due to continued momentum for high-end, high-margin solutions. |
Data Centers Circuit Boards Components | |
| 2025 Q2 |
Defense SpendingThe fund initiated positions in defense companies RENK Group and Chemring Group, both positioned to benefit from increased European defense spending. RENK Group supplies mission-critical drivetrain components for combat vehicles, while Chemring Group provides countermeasures and energetic devices for defense applications. |
Defense European Military Combat Aerospace |
Trade PolicyPresident Trump's sweeping tariff policies significantly impacted markets, including a 10% blanket duty on all imports and over 100% duties on China. A temporary 90-day agreement reduced US tariffs on Chinese goods from 145% to 30% and Chinese retaliatory duties from 125% to 10%, though uncertainty persists over the outcome once it expires. |
Tariffs China Trade Negotiations Policy | |
| 2025 Q1 |
Trade PolicyUS tariff policies are creating uncertainty and fears of a global trade war, with specific impact on Vietnamese companies like FPT due to higher-than-expected proposed tariffs. The fund made trades to reduce exposure to companies significantly affected by US tariffs. |
Tariffs Trade War Vietnam Policy Uncertainty |
Small CapsSmall-cap companies may hold up better than large caps during uncertain times as they tend to be more domestically focused and less exposed to tariff uncertainty. Valuations for small caps are well below large caps and have been less widely held. |
Valuations Domestic Outperformance Defensive | |
QualityGiven uncertainty, the fund believes it is critical to focus on quality companies with financial strength, adaptability to flex supply chains, deep understanding of customer needs, and market-share clout to maintain pricing power. |
Financial Strength Adaptability Pricing Power Supply Chain | |
| 2024 Q2 |
AICorporate first-quarter results generally exceeded expectations, particularly from companies exposed to artificial intelligence. Large technology companies, led by NVIDIA, fared especially well as they benefited from their exposure to the fast-growing area of AI. FPT Corporation performed well after announcing a new partnership with NVIDIA to provide GPU-as-a-Service. |
NVIDIA Technology GPU Cloud |
Small CapsSmall-cap valuations are more measured and at a significant discount to those among large caps. Concentration in the small-cap benchmark is vastly different from the large-cap equivalent, with materially lower potential for overheld positions being unwound. The fund prefers to stay in high-quality, small-cap equities with resilient and visible earnings streams. |
Valuations Discount Quality Earnings | |
JapanASICS Corporation continued to execute on its strategy, leading to stellar first-quarter results and benefiting from the weaker yen. The fund initiated a position in Japan Elevator Service, benefiting from the trend of building managers switching to independent maintenance providers. Japanese industrial production continues to be weak, affecting companies like Daiseki. |
Yen Industrial Maintenance Currency |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 28, 2025 | Fund Letters | Kirsty Desson | DNP PW | Dino Polska S.A. | Financials | Food Retail | Bear | NYSE | consumer confidence, Food, Poland, retail | Login |
| Oct 28, 2025 | Fund Letters | Kirsty Desson | CTS GR | CTS Eventim AG & Co. KGaA | Information Technology | Entertainment | Bear | Bolsas y Mercados Españoles (Madrid) | consumer demand, entertainment, Event ticketing, Integration costs | Login |
| Oct 28, 2025 | Fund Letters | Kirsty Desson | JUN3 GR | Jungheinrich AG | Industrials | Machinery | Bear | Bolsas y Mercados Españoles (Madrid) | Industrials, Logistics, machinery, restructuring | Login |
| Jun 30, 2025 | Short Thesis | 2025 Q2 abrdn International Small Cap Fund | TSE:6544 | Japan Elevator Service Holdings | Specialty Business Services | Specialty Business Services | Bull | Taiwan Stock Exchange | — | Login |
| Jun 30, 2025 | Fund Letters | abrdn International Small Cap Fund | 6544.T | Zenkoku Hosho | Financials | Specialized Finance | Bull | Tokyo Stock Exchange | Defensive growth, financial services, Japan, market share expansion, Mortgage Guarantees, ROE recovery | Login |
| Jun 30, 2025 | Fund Letters | abrdn International Small Cap Fund | RNK.DE | RENK Group | Industrials | Aerospace & Defense | Bull | Frankfurt Stock Exchange | Combat Vehicles, Defense Contractor, Drivetrain Components, European defense, Germany, NATO spending, Volkswagen Spinout | Login |
| Jun 30, 2025 | Fund Letters | abrdn International Small Cap Fund | CHG.L | Chemring Group | Industrials | Aerospace & Defense | Bull | London Stock Exchange | 9% CAGR Target, Countermeasures, Decoy Systems, Energetics, Roke Division, Sensors, UK Defense | Login |
| Mar 31, 2025 | Fund Letters | abrdn International Small Cap Fund | 2308.TW | Elite Material Corporation | Information Technology | Electronic Components | Bull | Taiwan Stock Exchange | CCL, electronics, growth, High-end, operating leverage, premium pricing, semiconductors, Taiwan | Login |
| Mar 31, 2025 | Fund Letters | abrdn International Small Cap Fund | SWECO-B.ST | Sweco AB | Industrials | Construction & Engineering | Bull | Nasdaq Stockholm | Consultancy, Diversified, engineering, Europe, growth, infrastructure, Sustainability, Sweden | Login |
| TICKER | COMMENTARY |
|---|---|
| EVD.DE | ticketing and live-entertainment group CTS Eventim fell amid worries about the company's decelerating business momentum. Additionally, the appointment of the new CFO in January left investors in a wait-and-see mode until a medium-term financial framework is presented later in the year. |
| JUN3.DE | Jungheinrich, the German producer of green forklift trucks, declined along with other European industrial names. Its shares were also pressured after the company revealed that new orders came in significantly below consensus. |
| GTT.PA | GTT, the French-listed LNG transport solution provider, delivered solid gains as gas prices rose amid the war in the Middle East. GTT also announced several new orders during the quarter. |
| 3374.TW | Elite Materials, the manufacturer of copper-clad-laminate used to produce circuit boards, outperformed in the wake of solid quarterly results. |
| 2360.TW | Chroma ATE, the supplier of automated test and measurement equipment, was another contributor; shares rose against the backdrop of rising demand for electric vehicles and semiconductors. |
| AVON.L | the company designs and manufactures mission-critical protective equipment, focused on respiratory and head protection for military and law enforcement. Avon enjoys patented technology, with long-duration contracts from the US Department of Defence and NATO driving a record order book and strong profitability. |
| VNT.AX | the company provides essential infrastructure and maintenance services across Australia and New Zealand for government and blue-chip customers. We believe that Ventia is well positioned to take advantage of its inflation-protected contracts and high renewal rates. |
| IMD.AX | the company supplies mining-technology tools. We like the stock for its rental-led recurring revenues, buoyed by exploration and critical-minerals tailwinds. |
| CURY3.SA | the Brazilian homebuilder focused on the low-to-mid income segment, with demand supported by a government housing programme. Cury's capital-efficient execution drives fast cash conversion and high returns, offering an attractive dividend profile. |
| RILBA.CO | the Danish regional bank with growing exposure to renewables and private banking. RILBA enjoys the best-in-class efficiency and credit quality, which should support resilient earnings. |
| PAN.JO | the Africa-focused mid-tier gold producer with a mix of low-cost surface operations and higher-grade underground mines. We like the stock for a step-change in production and cash flow that enables rapid deleveraging. |
| FLRY3.SA | the Brazilian healthcare diagnostics provider with a scaled network and a strong consumer and physician brand. Fleury should benefit from steady organic growth, with strong cash generation supporting an attractive dividend. |
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