The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 15, 2026
Ariel International Fund declined -2.59% net of fees in the third quarter of 2026, underperforming both the MSCI EAFE Index (+0.81%) and the MSCI ACWI ex-US Index (+0.48%). Over the longer term, the fund reported 1-year, 5-year, and 10-year annualized net returns of +17.48%, +9.96%, and +6.80%, respectively. Sector positioning is anchored by overweights in Communication Services, Information Technology, Utilities, and Consumer Discretionary, offset by underweights in Financials, Industrials, Materials, Health Care, and Consumer Staples, with zero exposure to Energy and Real Estate. Performance was aided by positive stock selection in Consumer Discretionary, Consumer Staples, and Health Care, while holdings in Information Technology, Utilities, and Industrials detracted. The macroeconomic environment was shaped by rising oil prices, persistent inflation, higher interest rate expectations, and Middle East geopolitical tensions. These crosscurrents produced marked regional divergence, with Japan adjusting to rate shifts, Europe managing cautious consumer spending, and China navigating an uneven recovery. The manager highlighted that capital concentration into prevailing winners has opened substantial valuation gaps across out-of-favor, durable franchises, creating prime non-consensus investment opportunities. Portfolio turnover was pronounced during the quarter, highlighted by the initiation of eight new positions: Komatsu Ltd. (4.6%), Standard Chartered PLC (2.5%), Sumitomo Mitsui Financial Group (2.5%), Reckitt Benckiser Group (2.0%), NatWest Group (1.9%), Ebara Corporation (1.9%), Akzo Nobel (1.1%), and Scout24 (0.9%). Conversely, the fund capitalized on full valuations by completely exiting five positions: Algonquin Power & Utilities, Bridgestone, Michelin, Italgas, and Wacker Chemie.
Exploit market dispersion and short-term mispricings by investing in high-quality, misunderstood non-U.S. franchises possessing durable competitive moats, solid balance sheets, and substantial long-term earnings recovery potential.
Looking ahead, the manager expects market dispersion across regions, sectors, and individual equities to widen as capital becomes more expensive and monetization across artificial intelligence and corporate initiatives remains uneven. They anticipate that companies with durable demand, pricing power, and proven earnings will increasingly separate from those driven merely by speculative optimism. Furthermore, improving underlying economic conditions outside the largest technology names should allow market leadership to broaden across industries and geographies, presenting a compelling environment for fundamentally oriented, valuation-conscious stock pickers.
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