Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global equity markets produced another positive quarter with MSCI AC World gaining over 3%, completing a double-digit year driven by Fed rate cuts and strong earnings. Three key themes defined 2025: decoupling from US dominance as non-US markets strengthened on cheap valuations and tariff impacts, AI momentum overcoming valuation concerns despite temporary DeepSeek scare, and market broadening with increased dispersion benefiting active managers. Small cap performance varied regionally with biotech surging 29% in Q4 and precious metals driving Canadian small caps to best year since 2009. Tariffs triggered domestic-oriented rallies including European defense gaining over 100%. Key risks include elevated US valuations, political uncertainty, and AI volatility despite strong fundamentals. Catalysts include continued Fed cuts, regulatory relaxation, and hyperscaler AI CAPEX commitments. The firm expects 2026 to favor specialized active managers as decoupling trends and AI disruption increase stock dispersion while divergent policies create local growth opportunities.
Global markets completed another strong year with decoupling from US dominance, AI momentum overcoming valuation concerns, and market broadening creating opportunities for active managers through increased dispersion and reduced correlation.
The firm expects decoupling and dispersion trends from 2025 to provide compelling opportunities for skilled active managers in 2026 and beyond. AI advancement as disruptive force likely to increase stock dispersion while divergent global policy opens doors for local company growth. Market structure shifts should reward specialized active managers over backwards-looking passive indices.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | 0700.HK, 1810.HK, BABA, GME, HIMS | AI, Biotech, Decoupling, Global Markets, Mining, Rate Cuts, small caps, tariffs | - | AI stocks were among top performers despite high valuations, with momentum overcoming valuation concerns. Chinese DeepSeek caused temporary rotation but recovery was strong due to hyperscaler commitment to increased CAPEX spending. AI boom touched all regions with astronomical gains in memory chips and private LLM companies. Small cap performance varied by region with US Russell 2000 gaining 2.2% in Q4. Speculative stocks reversed significantly after strong Q3. European small caps showed value outperformance driven by lower rates and weakening dollar. Biotech sector gained 29% in Q4 with Russell 2000 Biotech up 75% since June. 2025 marked significant shift from US dominance to non-US strength driven by cheap valuations and tariff impacts. Tariffs triggered rally in domestic-oriented themes like European defense which gained over 100%. Emerging markets shrugged off tariff concerns with many top performers seeing limited impact from substantial tariff increases. Precious metals surge dominated Canadian small caps leading to best year since 2009 with MSCI Canada Small Cap up 54%. Mining stocks contributed two-thirds of index return and represent 43% of index heading into 2026. Australian mining also saw double-digit rally offsetting broad declines elsewhere. |
| Apr 8 2025 | 2025 Q1 | - | - | - | |
| Jan 14 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 |
Decoupling2025 marked significant shift from US dominance to non-US strength driven by cheap valuations and tariff impacts. Tariffs triggered rally in domestic-oriented themes like European defense which gained over 100%. Emerging markets shrugged off tariff concerns with many top performers seeing limited impact from substantial tariff increases. |
Tariffs Defense Domestic Valuations Non-US | |
MiningMultiple mining holdings across metals including copper, gold, silver, tin, and uranium. Baker Steel Resources Trust contains significant exposure to copper developers, gold royalties, and tungsten projects. Power Metal Resources holds uranium and copper projects with royalties and blockchain mining ventures. |
Copper Gold Silver Uranium Tungsten | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy |
| 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. |
| 1810.HK | Shares declined amid inconsistent growth in the smartphone business, with strong competition limiting market share gains, while rising memory chip prices also pressured smartphone margins. In the electric vehicle business, Xiaomi has struggled to scale production to meet order demand. |
| 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. |
| GME | GameStop (-26%) |
| HIMS | Hims & Hers Health (-43%) |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||