| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.1% | 5.7% | 39.1% |
| 2025 | 2024 |
|---|---|
| 39.1% | 7.2% |
The Brandes International Equity Strategy delivered strong performance in Q4 2025, rising 5.67% net and outperforming the MSCI EAFE Index. For the full year, the strategy returned 39.13% net, significantly outperforming the benchmark's 31.22% return. Key contributors included emerging market holdings led by Samsung Electronics, Cemex, and Taiwan Semiconductor, benefiting from AI infrastructure demand and robust construction activity. The portfolio initiated positions in three UK companies: Mondi (packaging), National Grid (utilities), and Diageo (beverages), while exiting long-held positions in Mitsubishi UFJ and Tesco. Despite strong performance, international value stocks continue trading at historically attractive valuations relative to growth stocks across multiple metrics. The portfolio maintains overweights in consumer staples, healthcare, and consumer discretionary, with geographic focus on Europe and select emerging markets including Mexico, South Korea, and Brazil. Management remains optimistic about prospects, believing the strategy is well-positioned for continued rotation toward value and international equities.
International value stocks remain attractively valued despite strong 2025 performance, with the portfolio well-positioned to benefit from continued rotation toward value and international equities while maintaining exposure to secular growth themes in emerging markets and energy transition.
Looking ahead, we remain optimistic about the prospects of our holdings. We believe the strategy is well-positioned to benefit if there is a continued rotation toward value and international equities. Despite the strong rebound, international value stocks continue to trade at historically attractive valuations relative to growth stocks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | 005930.KS, 1876.HK, 4503.T, 8306.T, BABA, BNP.PA, CX, DGE.L, DPW.DE, EBS.VI, ERJ, GRF.MC, GSK, HEI.DE, KER.PA, MNDI.L, NG.L, ORA.PA, OTEX.TO, RI.PA, TSCO.L, TSM | emerging markets, Europe, international, Outperformance, packaging, Utilities, value |
MNDI LN NG LN TSCO LN |
International value stocks continue to trade within the least expensive valuation quartile relative to growth stocks since style indices inception. The valuation gap is evident… |
| Oct 24 2025 | 2025 Q3 | 6273 JP, CAP FP, TSM | AI, emerging markets, Europe, International Equities, value |
SMC JP SMC JP |
The fund outperformed, led by holdings in AI-linked firms such as Alibaba, Samsung, and TSMC, and value recovery across Europe and Asia. Managers emphasize international… |
| Jul 22 2025 | 2025 Q2 | BABA, RR/ LN, SAN FP, STMPA FP | currencies, diversification, fundamentals, international, Valuation gap | - | The letter underscores attractive valuations outside the U.S. driven by currency weakness and pessimism. Management favors fundamentally strong international businesses trading at discounts to intrinsic… |
| Mar 31 2025 | 2025 Q1 | 7201 JP, BNP FP, CAP FP, ERJ, ISP IM, KER FP, RI FP, RR/ LN, STM, WPP | - | - | - |
| Dec 31 2024 | 2024 Q4 | MKS LN, STM | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Emerging MarketsEM exposure increased to roughly 30% of the portfolio, the largest weight ever, driven by compressed valuations and opportunities in companies like CATL, Delta Electronics, Naver, and Tencent. The manager sees attractive risk-reward profiles in EM companies where fundamentals remain robust despite underperformance. |
China South Korea Taiwan Value Growth |
Energy TransitionEnergy transition themes are reflected through infrastructure investments and companies positioned for the global push toward renewable energy, including exposure to energy services and LNG infrastructure where long-term dynamics look positive. |
Renewables Infrastructure Clean Energy Sustainability Climate | |
PackagingMondi is a leading European producer of corrugated packaging, containerboard, kraft paper, and uncoated fine paper with strong presence in Eastern and Western Europe. Secular trends such as sustainability, convenience, and the shift from plastic to paper underpin steady growth in fiber-based packaging. The company's cost leadership, strong positioning in high-barrier-to-entry kraft paper market, and integrated operations provide competitive advantage. |
Sustainability Paper Containerboard Europe Integration | |
ValueBlue Tower focuses on value investing with international diversification. The manager notes that the valuation spread between cheap and expensive stocks is one of the greatest in market history, creating a favorable environment for their value-oriented approach. |
Value International Cheap Expensive Valuation | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
| 2025 Q2 |
InternationalInternational stocks significantly outperformed their domestic counterparts in 2025, and the less expensive portions of the market did particularly well. International companies offer an important counterbalance to the richness of the broader U.S. market when selectively chosen and are beneficial from a diversification perspective. |
MSCI ACWI Outperformance Diversification Ex-US |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 24, 2025 | Fund Letters | Jeffrey Germain | SMC JP | SMC Corporation | Energy | Machinery | Bull | NYSE | Automation, balance sheet, Industrials, manufacturing, Margins, Pneumatics, Value | Login |
| Oct 24, 2025 | Fund Letters | Jeffrey Germain | SMC JP | SMC Corporation | Energy | Machinery | Bull | NYSE | Automation, balance sheet, Industrials, manufacturing, Margins, Pneumatics, Value | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | MNDI LN | Mondi plc | Materials | Containers & Packaging | Bull | New York Stock Exchange | Container board, Cyclicality, Margin recovery, Packaging, Sustainability | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | NG LN | National Grid plc | Utilities | Electric Utilities | Bull | New York Stock Exchange | CapEx, Decarbonization, Electrification, Inflation Protection, Regulated utilities | Login |
| Jan 23, 2026 | Fund Letters | Jeffrey Germain | TSCO LN | Tesco plc | Consumer Staples | Food Retail | Bear | New York Stock Exchange | Competition, grocery retail, Margins, turnaround, Valuation Discipline | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Samsung was the largest beneficiary as the shortage in its key memory products, particularly DRAM, has led to substantial price increases. The shares have re-rated to around 1.7x price-to-book, while still trading at less than 10x forward earnings. Given this re-rating, we have been reducing the position during the quarter. |
| 1876.HK | For Budweiser Brewing APAC, soft demand in key Asian markets hurt market sentiment, along with competitive pricing pressures. Despite near-term volatility, we see structural growth opportunities from premiumization and evolving consumption trends in emerging markets. |
| 4503.T | Astellas Pharma benefited from resilient pharmaceutical demand and investor confidence in its pipeline. |
| 8306.T | MUFG is the largest and most diversified Japanese financial group |
| BABA | Alibaba (+90% total return in local currency to the point of sale). The share price strength occurred despite a deterioration in some of the fundamentals: earnings declined by approximately 75% in the most recent quarter, while capital expenditure has increased fourfold over the past two years as the company invests heavily to drive growth in its cloud business. Our original investment case was anchored in the strength of the free cash flow generation of the core business. As this thesis has weakened, we exited the position during the quarter. |
| BNP.PA | Paris-based bank serving commercial, retail, investment, private and corporate banking services internationally |
| CX | Meanwhile, construction materials firm Cemex advanced on robust construction activity and a favorable currency backdrop. |
| DGE.L | Diageo (-7.6%) |
| DPW.DE | Deutsche Post, the German diversified logistics company, was also strong following resilient earnings despite tariff-related challenges, driven by robust pricing power and cost control. |
| EBS.VI | Erste Group Bank, a leading retail and commercial bank in Central and Eastern Europe, was the top contributor during the quarter. The company reported strong operating performance, driven by healthy loan growth across core markets, resilient net interest income, and solid fee income, with contributions from securities, asset management and payments. During the quarter, Erste cleared key milestones related to its previously announced acquisition of a 49% stake in Santander Bank Polska. |
| GSK | Beat on EPS and revenue on strong HIV drug sales as well as Shingrex vaccine sales. New myeloma drug Blenrep was approved as only a third-line treatment; second-line treatment approval still needs more study |
| HEI.DE | I followed this global cement company for many years, but only first bought the stock around the time Greenfield started managing money in September 2021. The stock had been falling when we purchased it around €65, representing about 8 times earnings. It continued to fall and in April 2022 I wrote a blog about the industry. The stock continued falling all the way to about €40 in September 2022, equating to just 5 times earnings. Since then, the stock has been on a steady climb to €222 or about 17 times earnings, making it our highest contributing investment. We trimmed the stock a few times, but it remains a large investment. I believe the company will benefit from investment in and upgrading of infrastructure around the world. New bridges, highways, dams, tunnels, airports, ports, pipes, and railways require a lot of cement. |
| KER.PA | Shares like Kering (Gucci, Saint Laurent, Bottega Veneta) |
| MNDI.L | Mondi is a leading European producer of corrugated packaging, containerboard, kraft paper, and uncoated fine paper. Currently, Mondi is out of favor due to a prolonged downturn in the European containerboard market, driven by oversupply and weak demand since 2022. Despite these near-term challenges, Mondi offers an attractive long-term opportunity. |
| NG.L | National Grid is one of the world's leading regulated utilities, responsible for electricity transmission and distribution in Great Britain and electricity and gas networks in the northeastern United States. Despite its strong fundamentals, National Grid is currently out of favor, weighed down by weak U.K. macro sentiment and concerns over interest rates. |
| ORA.PA | Multi-national telecommunications network operator, sold Spain into a 50/50 JV in 2024 |
| OTEX.TO | OpenText released decent earnings on November 5, but apparently not good enough. OpenText was sold because of deteriorating dividend growth. While the company remains a significant player in the information management space, its latest dividend increase in September 2025 was just 4.8%. |
| RI.PA | Pernod Ricard declined due to concerns about slowing global spirits demand. While these headwinds persist, we remain confident in Pernod's strong brand portfolio and pricing power, which should support long-term prospects. |
| TSCO.L | Tesco, a UK-based multinational grocery and retail company operating a leading supermarket chain. Now one of our top 10 holdings in the portfolio, Tesco continues to benefit from its scale advantages and price leadership, which have allowed it to gain market share despite a competitive environment and a UK consumer backdrop that remains value conscious. At the same time, margin contributions from initiatives in retail media and continued share repurchases support earnings growth without requiring an improvement in consumer spending. |
| TSM | TSMC leads the MSCI Emerging Markets Index as the manufacturer in the AI ecosystem. |
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