Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 30th June 2026
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.59% | 3.58% | 6.27% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.59% | 3.58% | 6.27% |
The Brandes International Equity Fund returned 3.58% in Q2 2026, underperforming the MSCI EAFE Index's 10.82% return as AI enthusiasm drove exceptional performance in technology stocks. The Fund's underweight position in technology, resulting from trimming AI-related holdings after strong appreciation, was the primary detractor. Semiconductor holdings Samsung, TSMC, Infineon, and STMicroelectronics contributed positively before the manager exited Infineon and STMicroelectronics. Software and IT services holdings including SAP, Capgemini, and NICE declined amid concerns about AI disruption, though the manager added to SAP based on its strategic importance. Emerging markets holdings in China, Mexico, and Brazil detracted, while pharmaceutical holdings weakened on drug pipeline concerns. The manager initiated positions in Kerry Group, NetEase, CNH Industrial, and Essity, viewing them as undervalued opportunities. The Fund maintains meaningful exposure to health care, consumer staples, and consumer discretionary, with underweights in financials and industrials. The manager believes the current environment of market concentration creates attractive opportunities for disciplined value investors to find overlooked companies with strong fundamentals and appealing valuations.
The Brandes International Equity Fund pursues disciplined value investing in international equities, seeking companies with strong competitive positions, durable cash-flow generation, and attractive valuations that appear increasingly overlooked amid market concentration in AI-related stocks.
The manager believes the current environment remains particularly attractive for disciplined value investors, with market enthusiasm concentrated in a narrow group of AI-related companies creating opportunities elsewhere. The Fund is finding companies with strong competitive positions, durable cash-flow generation, and attractive valuations that appear increasingly overlooked, including businesses that can benefit from technological change. The manager views the Fund's differentiated exposures as providing meaningful diversification potential and a more attractive aggregate valuation profile than the benchmark, while remaining encouraged by the prospects for value stocks and the risk-reward tradeoff of the Fund's holdings.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 23 2026 | 2026 Q2 | 005930 KS, 012330 KS, 4502.T, 4503.T, BABA, CAP.PA, CFR SW, CNHI, DSFIR.SW, ESSITY-B.ST, IFX.DE, KYGA IR, NICE, NTES, NTR.TO, OTEX, PBR, SAN.PA, SAP.DE, STM, TCOM, TSM, TTE, WALMEX.MX | AI, emerging markets, Enterprise Software, Europe, international, semiconductors, technology, value |
KRYAY NTES |
Brandes International Equity underperformed in Q2 2026 as AI-driven technology concentration dominated markets. The manager trimmed semiconductor winners and maintains conviction in mission-critical enterprise software despite near-term pressure. New positions in Kerry Group and NetEase reflect disciplined value hunting in overlooked areas. The Fund's differentiated exposures in health care, consumer staples, and select emerging markets offer meaningful diversification from AI-concentrated benchmarks at attractive valuations. |
| Apr 21 2026 | 2026 Q1 | 005930 KS, 4502.T, 4503.T, CAP.PA, ENGI.PA, F34.SI, KER.PA, OTEX, PBR, PUB.PA, SAP, STM, SW.PA, WPP.L | AI, emerging markets, energy, Europe, international, Pharmaceuticals, semiconductors, value | - | Brandes International Equity Fund gained 2.59% in Q1 2026, outperforming on energy strength and AI-driven semiconductor demand while facing headwinds from AI disruption concerns in IT services. The fund added Sodexo and exited Engie, maintaining conviction in international value opportunities despite increased market volatility from geopolitical and economic uncertainties. |
| 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 |
Brandes International Equity delivered exceptional 39% annual returns in 2025, outperforming benchmarks through strong emerging market stock selection and value rotation. Despite the rally, international value stocks remain historically cheap versus growth. The portfolio added UK utilities and packaging exposure while maintaining overweights in defensive sectors and emerging markets positioning. |
| Oct 24 2025 | 2025 Q3 | 005930.KS, 086280.KS, 4502.T, 6273.T, BABA, CAP.PA, CX, ERJ, GSK.L, HEI.DE, HEIA.AS, KER.PA, OTEX, PBR, PUB.PA, SAN.PA, STM, TSM, UHR.SW, WPP.L | AI, Automation, emerging markets, Europe, international, Outperformance, technology, value |
SMC JP SMC JP |
Brandes International Equity Fund outperformed significantly in Q3 2025 on AI-driven gains and value stock selection. International value stocks trade at historically attractive discounts, creating compelling opportunities. Portfolio emphasizes Europe and emerging markets with increased technology exposure. Manager remains optimistic about continued value rotation and international equity outperformance given attractive relative valuations. |
| Jul 22 2025 | 2025 Q2 | 005930.KS, 086280.KS, 6273.T, BABA, CAP.PA, CX, ERJ, GSK.L, HEI.DE, HEIA.AS, KER.PA, OTEX.TO, PETR4.SA, PUB.PA, SAN.PA, STM, TAK, TSM, UHR.SW, WPP.L | AI, Automation, emerging markets, Europe, industrials, international, technology, value | 6273.T | Brandes International Equity Fund outperformed on AI-driven gains from Alibaba, Samsung, and TSMC, while value rotation provided additional tailwinds. New position in SMC Corporation adds factory automation exposure at attractive valuations. Portfolio emphasizes domestically oriented European and emerging market companies with defensive characteristics, positioning for continued value outperformance and international equity rotation. |
| Mar 31 2025 | 2025 Q1 | 005930.KS, 1876.HK, 4502.T, BABA, BNP.PA, CA.PA, ERJ, GSK.L, HEI.DE, HEIA.AS, HEN3.DE, ISP.MI, ORA.PA, PUB.PA, RR.L, SAN.PA, STM, TSM, UHR.SW, WPP.L | aerospace, Beverages, emerging markets, Europe, financials, international, semiconductors, value |
WMMVY CAP.PA RI.PA |
Brandes International Equity Fund outperformed in Q1 2025 driven by aerospace and beverage holdings while semiconductor positions detracted. The team actively repositioned the portfolio, adding value opportunities in Mexican retail, French spirits, and IT services. Management remains optimistic on international value investing given attractive valuations relative to U.S. markets and growth stocks. |
| Dec 31 2024 | 2024 Q4 | 005930.KS, 1211.HK, 4502.T, 5108.T, 7201.T, BABA, BNP.PA, CAE.TO, EBS.VI, ERJ, GSK, HEI.DE, HEIA.AS, KGF.L, RR.L, SAN.PA, STM, UBS, UHR.SW, WPP.L | China, industrials, international, materials, semiconductors, value |
STM MKS.L |
Brandes International Equity Fund sees compelling value in international stocks trading at extreme discounts to U.S. equities. Despite Q4 weakness from Chinese holdings, strong aerospace and materials performance drove solid annual returns. New semiconductor position in STMicroelectronics reflects cyclical opportunity. Manager optimistic on international rotation given historical valuation extremes. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI enthusiasm drove exceptional performance in technology stocks, particularly semiconductor manufacturers and companies viewed as beneficiaries of AI-related capital expenditures. The Fund trimmed or exited certain AI-related holdings after strong appreciation, resulting in an underweight position. The manager recognizes AI's potential to reshape industries but believes mission-critical enterprise software companies with deep customer relationships remain well positioned to incorporate AI functionality. |
Semiconductors Technology Enterprise Software Infrastructure Disruption |
SemiconductorsSemiconductor companies were among the strongest performers during the quarter, driven by investor focus on AI infrastructure demand. The Fund's holdings in Samsung Electronics, TSMC, Infineon, and STMicroelectronics generated significant gains. However, the manager exited Infineon and STMicroelectronics after strong appreciation, indicating profit-taking rather than sustained conviction in the theme at current valuations. |
AI Technology Taiwan South Korea Manufacturing | |
ValueThe manager emphasizes disciplined value investing amid market concentration in AI-related companies. The Fund seeks companies with strong competitive positions, durable cash-flow generation, and attractive valuations that appear increasingly overlooked by investors. The manager believes the current environment remains particularly attractive for value investors, with opportunities created by extreme optimism concentrated in a narrow group of stocks. |
Valuation Opportunity Discipline Cash Flow Competitive Position | |
Enterprise SoftwareIT services and software holdings declined as businesses perceived to face AI disruption underperformed. The Fund's holdings in Capgemini, NICE, and SAP were among the largest detractors. However, the manager believes mission-critical enterprise software companies with deep customer relationships and embedded workflows remain well positioned, and added to SAP during the quarter based on its strategic importance and ability to incorporate AI functionality. |
SAP IT Services AI Customer Relationships Mission Critical | |
ChinaChina-based holdings including Alibaba, NetEase, and Trip.com were detractors during the period. The manager initiated a new position in NetEase, a video game developer, viewing it as undervalued relative to the quality and durability of its earnings. The manager believes the market underappreciates NetEase's franchise longevity and is over-penalizing for timing risk in the development cycle. |
Gaming E-commerce Technology Valuation Growth | |
PharmaceuticalsPharmaceutical holdings Astellas Pharma, Takeda Pharmaceutical, and Sanofi weakened amid increasing investor concerns surrounding their respective drug pipelines. These holdings were detractors during the quarter, with no indication of the manager adding to positions or expressing renewed conviction in the sector. |
Drug Pipelines Japan France Healthcare Biotechnology | |
Emerging MarketsSeveral emerging markets holdings declined during the quarter, including Alibaba in China, Wal-Mart de Mexico, and Petrobras in Brazil. Despite underperformance, the manager maintains meaningful exposure to select emerging markets including Mexico and Brazil, viewing these as areas where near-term uncertainty has created a disconnect between price and long-term fundamentals. |
Brazil Mexico China Retail Energy | |
FoodThe manager initiated a position in Kerry Group, a global leader in specialty food ingredients and taste and nutrition solutions. Kerry's shares have fallen out of favor due to slowing volume growth, weaker end-market demand, and concerns surrounding GLP-1 adoption. The manager believes the market is underappreciating Kerry's value and sees an opportunity for the shares to be reappraised as a defensive compounder, with exposure to faster-growing end markets and structural trends supporting long-term resilience. |
Ingredients Nutrition GLP1 Emerging Markets Foodservice | |
| 2026 Q1 |
AIAI infrastructure spending continued to underpin memory demand and pricing, benefiting Samsung Electronics. However, concerns about AI disruption weighed on traditional IT services companies like Capgemini and enterprise software vendors like SAP and OpenText, as investors reassessed the impact of generative AI on legacy business models. |
Memory Infrastructure Semiconductors Enterprise Software Disruption |
PharmaceuticalsJapanese pharmaceutical companies Takeda and Astellas performed well during the quarter. Astellas benefited from improved market optimism around its drug pipeline and solid earnings results, while the sector contributed positively to overall fund performance. |
Drug Pipeline Earnings Japan Healthcare | |
EnergyThe energy sector rose significantly amid geopolitical conflict in the Middle East. Petrobras was a top performer, benefiting from higher oil prices and lack of production exposure in the conflict region. The fund maintained a slight overweight and pared exposure as prices held up well during market pullback. |
Oil Prices Geopolitical Middle East Brazil | |
SemiconductorsSamsung Electronics advanced on AI-related infrastructure spending supporting memory demand. STMicroelectronics benefited from collaboration with Amazon Web Services and growing confidence in automotive and industrial chip rebound, though semiconductor sentiment became more volatile later in the period. |
Memory Automotive Industrial AWS | |
ValueInternational value stocks maintained leadership over growth stocks over the past five years. The fund trades at compelling valuation levels with attractive long-term growth characteristics relative to benchmarks, positioned to benefit from continued rotation toward value and international equities. |
International Valuation Growth Rotation | |
| 2025 Q4 |
ValueFund focuses on buying shares in decent operating businesses at significant discounts to intrinsic value. European value stocks had their largest outperformance versus growth stocks in 30 years, beating them by 19 percentage points. Manager believes value will continue to outperform growth during the remainder of this decade. |
Value Investing Discount Intrinsic Value P/E Ratios Deep Value |
BiotechnologyFund invested in RTW Biotech after reading about gene editing potential. Manager believes gene splicing and editing are likely to be the next big thing over the coming generation. RTW Biotech appreciated by more than 69% and manager expects to hold for many years. |
Gene Editing Biotech RTW Biotech China Innovation M&A | |
ShippingFund generated exceptional returns from car carrier investments with 110% per annum IRR over five years. Sold operating companies but maintains exposure through Wilhelmsen family holding company at 48% discount to NAV. Also invested in Norwegian oil services business. |
Car Carriers Maritime Shipping Cycles Oil Services Norway | |
InsuranceVienna Insurance Group was the best performing stock with 158% return in USD. NN Group generated 85% return despite trading at discount to book value. Both companies demonstrate efficient capital allocation and strong market positions in their regions. |
Life Insurance P&C Insurance Central Europe Capital Allocation Book Value | |
SteelDanieli specializes in manufacturing steel plants and producing specialist steels. European Commission proposals to safeguard European steel production led to surge in demand for energy efficient and hydrogen-ready steel plants. Order book elevated with increasing profitability. |
Steel Plants Energy Efficiency Hydrogen Carbon Costs Italy | |
FertilizersYara International increased EPS from $1.75 to around $4.25 estimated for 2025. Manager expects Yara to surpass analysts' earnings expectations due to tight new supply and Carbon Border Adjustment Mechanism in the EU. Well managed business owned for over 20 years. |
Nitrogen CBAM Supply Constraints EU Regulation Agriculture | |
| 2025 Q3 |
AIAI-related investments drove strong performance across multiple holdings. Alibaba benefited from aggressive AI investment plans and growth in AI-related products and cloud revenue. Samsung and TSMC gained from positive AI sentiment. The fund sees AI deployment as a catalyst for enterprise spending and IT services recovery. |
Artificial Intelligence Cloud Enterprise Technology Semiconductors |
ValueThe fund's value philosophy continues to drive outperformance as international value stocks remain in the least expensive valuation quartile relative to growth. Historical discount levels often preceded attractive relative returns for value stocks over subsequent three- to five-year periods. The fund trades at compelling valuations while offering attractive long-term growth characteristics. |
Valuation Discount Growth Outperformance Philosophy | |
AutomationSMC Corporation represents exposure to factory automation trends through pneumatic components used in robotics, packaging, medical and automotive systems. The company's exposure to factory automation may provide long-term tailwinds even as pneumatics grows more slowly than robotics. Industrial automation cycle recovery could drive margin improvement. |
Factory Robotics Industrial Pneumatics Manufacturing | |
| 2025 Q2 |
AIAI-related investments drove strong performance across multiple holdings. Alibaba benefited from aggressive AI investment plans and growth in AI-related products and cloud revenue. Samsung and TSMC gained from positive AI sentiment. Capgemini is positioned to benefit from increased corporate spending on enterprise AI applications despite near-term headwinds. |
Artificial Intelligence Cloud Enterprise Technology Semiconductors |
ValueThe fund's value philosophy continues to drive outperformance as international value stocks remain in the least expensive valuation quartile relative to growth. The manager emphasizes compelling valuations across holdings and expects continued rotation toward value investing to benefit the fund's positioning. |
Valuation Discount Undervalued Price Rotation | |
AutomationSMC Corporation represents exposure to factory automation trends through its dominant position in pneumatic components used in robotics, packaging, and industrial applications. The company's exposure to automation may provide long-term tailwinds despite near-term cyclical pressures. |
Factory Robotics Industrial Pneumatics Manufacturing | |
| 2025 Q1 |
ValueThe fund emphasizes value investing philosophy with holdings trading at compelling valuation levels relative to benchmarks. International stocks and value stocks offer attractive return potential based on current valuations, with value stocks trading in the cheapest quartile relative to growth stocks historically. |
Value Valuation Discount Multiple Intrinsic |
AerospaceTop performers included aerospace and defense companies Rolls-Royce and Embraer, which appreciated substantially as end markets recovered with better-than-expected earnings, higher volumes, and enhanced margins. Both companies benefited from strengthening balance sheets and expanding order backlogs. |
Aerospace Defense Recovery Margins Backlog | |
BeveragesThe fund has been finding more opportunities in the beverage industry over the past year, with notable contributors including Heineken Holding and Budweiser Brewing APAC. The team also added spirits company Pernod Ricard despite demand weakness in the U.S. and China. |
Beverages Spirits Premium Brands Emerging | |
SemiconductorsTechnology-related stocks including semiconductor holdings STMicroelectronics and TSMC pulled back amid concerns around semiconductor capital expenditure spending triggered by DeepSeek's lower-cost AI model announcement. TSMC also faced skepticism about substantial U.S. spending plans. |
Semiconductors Technology AI Capex Cyclical | |
| 2024 Q4 |
SemiconductorsThe fund initiated a position in STMicroelectronics, a semiconductor supplier with diverse exposure to automotive, industrial, and personal electronics markets. While the auto semiconductor market weakness has pressured near-term results, the manager believes current challenges are cyclical and sees compelling long-term growth from electric vehicles, ADAS, and IoT adoption. |
Automotive Cyclical Electric Vehicles IoT ADAS |
ValueThe manager emphasizes trading at attractive valuation levels relative to U.S. stocks and highlights the significant valuation gap between international and U.S. equities. Multiple portfolio exits occurred as positions reached intrinsic value estimates, including Marks and Spencer and Contemporary Amperex Technology. |
Valuation Intrinsic Value Discount Margin of Safety | |
ChinaChinese holdings including Alibaba and Budweiser Brewing APAC were notable detractors as stocks pulled back after initial stimulus optimism proved overdone. Consumer holdings with China exposure faced headwinds throughout the quarter. |
Stimulus Consumer Volatility |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 23, 2026 | Fund Letters | Brandes International Equity Fund | KRYAY | Kerry Group | Packaged Foods | Packaged Foods & Meats | Bull | - | B2b, Clean Label, Emerging markets, Equity, Food Ingredients, Foodservice, Functional Ingredients, Ireland, Nutrition, Specialty Ingredients, Taste Solutions, turnaround, Value | Login |
| Jul 23, 2026 | Fund Letters | Brandes International Equity Fund | NTES | NetEase | Electronic Gaming & Multimedia | Interactive Home Entertainment | Bull | NASDAQ | China, education technology, entertainment, Equity, franchise, Gaming, Music streaming, net cash, Online Games, technology, Value, Video games | 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 |
| 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 |
| Sep 30, 2025 | Fund Letters | Brandes International Equity Fund | 6273.T | SMC Corporation | Industrials | Industrial Machinery | Bull | Tokyo Stock Exchange | Cyclical, Defensive Moat, Factory Automation, Industrial automation, Japan, manufacturing, market leader, Pneumatic Components, robotics, Value | Login |
| Mar 31, 2025 | Fund Letters | Brandes International Equity Fund | WMMVY | Wal-Mart de Mexico | Consumer Staples | Food & Staples Retailing | Bull | OTC | defensive, dominant market position, Free Cash Flow, Mexico, net cash, retailer, Value | Login |
| Mar 31, 2025 | Fund Letters | Brandes International Equity Fund | CAP.PA | Capgemini | Information Technology | IT Services | Bull | Euronext Paris | AI, cloud, Digital transformation, Discount to peers, france, High Returns on Capital, IT services, Value | Login |
| Mar 31, 2025 | Fund Letters | Brandes International Equity Fund | RI.PA | Pernod Ricard | Consumer Staples | Beverages | Bull | Euronext Paris | brand portfolio, defensive, Emerging markets, france, operating leverage, premium spirits, Value | Login |
| Dec 31, 2024 | Fund Letters | Brandes International Equity Fund | STM | STMicroelectronics | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NYSE | Adas, automotive, Cyclical, Electric Vehicles, IoT, Microcontrollers, Netherlands, Power Semiconductors, semiconductors, Value | Login |
| Dec 31, 2024 | Fund Letters | Brandes International Equity Fund | MKS.L | Marks and Spencer | Consumer Discretionary | Multiline Retail | Neutral | London Stock Exchange | Apparel, Food Retail, Free Cash Flow, Property Ownership, retailer, turnaround, UK, Value Realization | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | South Korea's Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSMC), and semiconductor firms Infineon in Germany and STMicroelectronics in France generated significant gains as investors increasingly focused on companies benefiting from growing AI infrastructure demand. |
| TSM | South Korea's Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSMC), and semiconductor firms Infineon in Germany and STMicroelectronics in France generated significant gains as investors increasingly focused on companies benefiting from growing AI infrastructure demand. |
| IFX.DE | South Korea's Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSMC), and semiconductor firms Infineon in Germany and STMicroelectronics in France generated significant gains as investors increasingly focused on companies benefiting from growing AI infrastructure demand. We exited several strong performers, including semiconductor companies Infineon and STMicroelectronics, as well as South Korean auto component manufacturer Hyundai Mobis, which benefited from its ownership in robotics company Boston Dynamics. |
| STM | South Korea's Samsung Electronics, Taiwan Semiconductor Manufacturing Company (TSMC), and semiconductor firms Infineon in Germany and STMicroelectronics in France generated significant gains as investors increasingly focused on companies benefiting from growing AI infrastructure demand. We exited several strong performers, including semiconductor companies Infineon and STMicroelectronics, as well as South Korean auto component manufacturer Hyundai Mobis, which benefited from its ownership in robotics company Boston Dynamics. |
| CFR.SW | Other contributors included French luxury goods firm Compagnie Financiere Richemont and our recent purchase, Netherlands-based ingredients and fragrance company DSM-Firmenich, which rose after reporting improving earnings. |
| DSFIR.SW | Other contributors included French luxury goods firm Compagnie Financiere Richemont and our recent purchase, Netherlands-based ingredients and fragrance company DSM-Firmenich, which rose after reporting improving earnings. |
| CAP.PA | In addition, businesses perceived to face disruption from AI, particularly software and IT services companies, generally underperformed. The Fund's holdings in Capgemini, NICE, and SAP were among the largest detractors. |
| NICE | In addition, businesses perceived to face disruption from AI, particularly software and IT services companies, generally underperformed. The Fund's holdings in Capgemini, NICE, and SAP were among the largest detractors. |
| SAP.DE | In addition, businesses perceived to face disruption from AI, particularly software and IT services companies, generally underperformed. The Fund's holdings in Capgemini, NICE, and SAP were among the largest detractors. While we recognize that AI has the potential to reshape many industries, we believe mission-critical enterprise software companies with deep customer relationships and embedded workflows remain well positioned. In our view, SAP's strategic importance within customer organizations, combined with its ability to incorporate AI functionality into existing products, provides an attractive long-term opportunity. We added to the position during the quarter. |
| BABA | Outside the technology sector, several of the Fund's emerging markets holdings declined, including China's Alibaba, Mexican retailer Wal-Mart de Mexico, and Brazil-based integrated oil company Petrobras. |
| WALMEX.MX | Outside the technology sector, several of the Fund's emerging markets holdings declined, including China's Alibaba, Mexican retailer Wal-Mart de Mexico, and Brazil-based integrated oil company Petrobras. |
| PBR | Outside the technology sector, several of the Fund's emerging markets holdings declined, including China's Alibaba, Mexican retailer Wal-Mart de Mexico, and Brazil-based integrated oil company Petrobras. Oil firms Petrobras and TotalEnergies remained strong contributors for the year following their robust first-quarter performance. |
| 4503.T | Pharmaceutical holdings Astellas Pharma and Takeda Pharmaceutical in Japan, as well as Sanofi in France, also weakened amid increasing investor concerns surrounding their respective drug pipelines. |
| 4502.T | Pharmaceutical holdings Astellas Pharma and Takeda Pharmaceutical in Japan, as well as Sanofi in France, also weakened amid increasing investor concerns surrounding their respective drug pipelines. |
| SAN.PA | Pharmaceutical holdings Astellas Pharma and Takeda Pharmaceutical in Japan, as well as Sanofi in France, also weakened amid increasing investor concerns surrounding their respective drug pipelines. |
| 012330.KS | We exited several strong performers, including semiconductor companies Infineon and STMicroelectronics, as well as South Korean auto component manufacturer Hyundai Mobis, which benefited from its ownership in robotics company Boston Dynamics. |
| NTR.TO | We also divested Canadian chemicals business Nutrien and French oil firm TotalEnergies. |
| TTE | We also divested Canadian chemicals business Nutrien and French oil firm TotalEnergies. Oil firms Petrobras and TotalEnergies remained strong contributors for the year following their robust first-quarter performance. |
| CNHI | New purchases included agricultural equipment firm CNH Industrial, Ireland-based ingredients and flavoring business Kerry Group, Chinese gaming company NetEase, and Swedish household products company Essity. |
| KYGA.IR | New purchases included agricultural equipment firm CNH Industrial, Ireland-based ingredients and flavoring business Kerry Group, Chinese gaming company NetEase, and Swedish household products company Essity. Kerry Group is a global leader in specialty food ingredients and integrated taste and nutrition solutions. Kerry operates as a business-to-business partner to food, beverage, and pharmaceutical companies, supporting customers throughout the product development cycle (from ideation to launch) and delivering customized solutions that enhance taste, nutrition, and functionality. Over time, the company has transformed its portfolio through divestitures of non core businesses and is now a pure play taste and nutrition franchise, with broad geographic exposure and a diversified customer base across end markets. Kerry's shares have fallen out of favor due to slowing volume growth, weaker end-market demand, reduced acquisition activity, and concerns surrounding GLP-1 adoption and its potential effect on food consumption. While we think some of the de-rating is justified, as reflected in our conservative assumptions, we believe the market is underappreciating Kerry's value and see an opportunity for the shares to be reappraised as a defensive compound rather than as a proxy for a challenged U.S. packaged-food market. We like Kerry's exposure to faster-growing end markets, such as emerging markets and U.S. foodservice, which together account for approximately 40% of its sales. Structural trends such as demand for healthier, cleaner-label products and functional ingredients may also serve as a tailwind. Additionally, the company's global scale, diversified end markets, and history of cash generation support our view that Kerry remains a resilient business with the potential for earnings recovery over time. |
| NTES | New purchases included agricultural equipment firm CNH Industrial, Ireland-based ingredients and flavoring business Kerry Group, Chinese gaming company NetEase, and Swedish household products company Essity. NetEase is the second-largest video game developer and publisher in China, with a 30-year track record of internally developed, long-lived franchises and a portfolio that consistently places four to six titles among China's top 20 games. The core Online Games Services segment is complemented by valuable equity stakes in NetEase Cloud Music and Youdao, both publicly listed, providing diversification and identifiable asset value. After a temporary slowdown following the COVID-era surge and the 2022 success of Eggy Party, NetEase's core gaming growth meaningfully reaccelerated in 2024 and early 2025. However, the share price pulled back meaningfully in early 2026 on AI disruption risk and growth deceleration that underwhelmed investors. We believe NetEase is undervalued relative to the quality and durability of its earnings. At its current price, NetEase trades near the low end of global large-cap gaming peers on an earnings basis, while offering, in our view, balance sheet strength (net cash equivalent to roughly 20% of market capitalization) and long-term organic growth potential with attractive returns on capital. Our thesis is that the market underappreciates the longevity of NetEase's franchises and is over-penalizing for the timing risk in the development cycle. At its current share price, NetEase represents an appealing risk-reward profile for us. |
| ESSITY-B.ST | New purchases included agricultural equipment firm CNH Industrial, Ireland-based ingredients and flavoring business Kerry Group, Chinese gaming company NetEase, and Swedish household products company Essity. |
| OTEX | At the security level, detractors were consistent with those for the second quarter. IT services and software holdings declined, led by SAP, Capgemini, and Open Text. |
| TCOM | Additional detractors included China-based holdings Alibaba and Trip.com. |
| 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 | |||