| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.7% | 5.17% | 1.56% |
The Cambiar International Equity Fund returned 5.17% in 2Q 2026, underperforming the MSCI EAFE Index which gained 10.82% driven by technology and AI beneficiary stocks. The semiconductor rally was particularly explosive, with companies like ASML and Taiwan Semiconductor posting strong gains. The fund's underweight to Technology was the primary drag on relative performance, though positive stock selection in Industrials, Materials, and Energy provided partial offsets. The team increased exposure to Industrials to approximately 25% of the portfolio, adding Canadian National Railway and MTU Aero Engines to capture tailwinds from capital investment cycles, grid upgrades, onshoring, and defense spending. Banks rebounded strongly with gains in Barclays, ING, and DBS Group. The manager acknowledges execution challenges with positions like Nintendo, Coloplast, and MonotaRO but maintains conviction in their recovery potential. Looking ahead, the team remains cautious on U.S. valuations with 50% of the S&P 500 trading above 10x price-to-sales, while viewing international equities at 14.6x forward P/E as more reasonable. The fund maintains its disciplined approach focused on quality companies with strong fundamentals.
Cambiar International Equity Fund pursues a Quality | Price | Discipline investment philosophy, focusing on well-managed international companies with robust cash flows, strong balance sheets, and reasonable valuations to compound capital over time through a diversified, balanced portfolio approach.
The manager expects continued volatility and sharp rotations in equity markets. While acknowledging that AI-driven gains have pushed U.S. valuations to extreme levels with approximately 50% of the S&P 500 trading above 10x price-to-sales, the team views international equity valuations as more reasonable at 14.6x forward P/E. The team intends to remain disciplined, focusing on well-managed companies with robust cash flows, strong balance sheets, and reasonable valuations, believing this approach is the most prudent path to compounding capital over time versus taking excess risk to keep pace in euphoric market environments.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 27 2026 | 2026 Q2 | 1299 HK, 3064.T, ASML, BARC.L, CARL-B.CO, CNI, COLOB.CO, D05.SI, INGA.AS, LSEG.L, MTUAY, NTDOY, TSM | AI, financials, industrials, International Equity, Quality, semiconductors, valuation | - | Cambiar International Equity returned 5.17% in 2Q 2026, lagging the MSCI EAFE's 10.82% gain driven by AI and semiconductor euphoria. The fund's underweight to Technology hurt relative performance despite positive selection elsewhere. The team increased Industrials exposure to 25% of capital, adding CNI and MTU Aero to capture defense, onshoring, and infrastructure tailwinds. International valuations at 14.6x forward P/E appear reasonable versus extreme U.S. multiples. |
| Apr 29 2026 | 2026 Q1 | 3064.T, AIR.PA, COLOB.CO, EDP.LS, PUB.PA, RYA.L, SAP, SWM | AI, energy, international, Quality, value | - | International fund underperformed amid AI disruption fears and Middle East volatility. Manager navigated by selling AI-vulnerable Recruit Holdings while adding to defensive positions like Airbus and utilities. Value rotation favors international markets given cyclical exposure. With international stocks at 14x P/E discount to U.S., focus remains on quality companies with pricing power. |
| Jan 26 2026 | 2025 Q4 | DEO, KYGA.L, LSEG.L, SW, TSM | AI, Currency, Europe, financials, international, semiconductors, staples, value | SW | Cambiar International delivered strong absolute returns but lagged benchmark due to elevated cash and Consumer Staples weakness. Fund maintains constructive outlook on international equities given valuation asymmetry versus richly priced U.S. markets. European stimulus should provide earnings tailwinds. Sold Taiwan Semi after 400% gains, added Smurfit Westrock. Expects more selective 2026 gains with cautiously optimistic stance. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI beneficiary stocks drove a broad rally in global equities during 2Q, with extreme price moves in semiconductors. The fervor extended beyond the U.S. to companies like SK Hynix, ASML, and Taiwan Semiconductor. Advanced AI chips require increased memory, creating a multiplier effect within the semiconductor complex with strong pricing, margins, and profits. |
Semiconductors Memory Data Centers Technology |
Semiconductor CycleSemiconductors experienced sharp gains during the quarter, particularly evident in the S&P 500 semiconductor components. The rally was driven by AI-related demand, with pricing, margins, and profits extremely strong. However, the manager notes the concentration and extreme price moves warrant caution, citing Bob Farrell's Rule about parabolic advances. |
Semiconductors Memory Valuation Concentration | |
Defense SpendingDefense spending is identified as one of several macro tailwinds bolstering the manager's constructive view towards the Industrials sector. The team added to Industrials allocation during the quarter, with the sector comprising approximately 25% of portfolio capital as of quarter-end. |
Defense Industrials Capital Investment | |
OnshoringOnshoring initiatives are cited as one of the macro tailwinds supporting the manager's positive view on Industrials. The team is seeking to gain exposure to these positive catalysts while remaining sensitive to elevated valuations in the sector. |
Industrials Manufacturing Supply Chain | |
Grid UpgradeGrid investment and upgrades are identified as macro tailwinds supporting the Industrials sector. This catalyst is part of the rationale for the team's increased allocation to Industrials during the quarter, though they remain sensitive to valuations. |
Infrastructure Utilities Capital Investment | |
RailroadsThe fund added Canadian National Railway during the quarter. CNI's rail network provides a natural monopoly that spans key shipping corridors in Canada and the U.S., representing a high-quality business franchise with differentiated positioning. |
Transportation Infrastructure Logistics | |
AerospaceThe fund added MTU Aero Engines during the quarter. MTU is an aerospace engine manufacturer with a duopolistic market share position in the narrow body market and a multi-year order backlog that results in a high degree of revenue visibility. |
Defense Industrials Commercial Aviation | |
| 2026 Q1 |
AIAI disruption fears dominated the quarter, causing material valuation compression across software and other businesses. Markets struggled to predict which companies could withstand AI displacement versus those at risk of substitution. Cambiar sold Recruit Holdings due to AI concerns but maintained positions in SAP and Publicis, viewing them as having defensive moats against AI disruption. |
Software Disruption Valuation Technology Enterprise |
ValueNotable divergence emerged as growth stocks struggled while value stocks provided downside protection. Cyclical sectors like Energy, Industrials, and Materials benefited from rotation away from Technology and Consumer Discretionary. This shift favors international markets given their greater exposure to cyclicals and value-oriented sectors. |
Cyclicals Rotation Energy Materials Industrials | |
EnergyEnergy sector registered strong returns in the quarter, with Cambiar benefiting from modest overweight allocation and solid stock performance. However, the manager remains hesitant to add to energy stocks given potential for oil prices to pull back as Middle East tensions de-escalate. |
Oil Middle East Geopolitical Commodities | |
Private CreditPrivate credit showing signs of struggle via defaults and loan markdowns after explosive growth. The combination of abundant liquidity and willingness to take risks that banks passed on is now constraining business investment and hiring as credit availability shrinks and financial conditions tighten. |
Credit Defaults Liquidity Banks | |
| 2025 Q4 |
RiskMarket concentration has led to increased risk contribution from the ten largest companies, now accounting for more than 50% of S&P 500 volatility. The largest stocks have become more volatile and correlated, creating uneven beta distribution that challenges traditional risk models. |
Volatility Beta Correlation Risk Models Concentration |
AIBreakthroughs in artificial intelligence have helped drive notably strong performance in mega cap stocks, contributing to increased market concentration. AI is identified as a key driver of the recent period of outperformance among the largest companies. |
Technology Performance Mega Caps Innovation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 26, 2026 | Fund Letters | Brian M. Barish | SW | Smurfit Westrock plc | Materials | Paper & Packaging | Bull | New York Stock Exchange | Corrugated, Margins, Merger Synergies, Packaging, Self Help | Login |
| TICKER | COMMENTARY |
|---|---|
| CNI | Additions included Canadian National Railway (CNI) and MTU Aero Engines (MTUAY). CNI's rail network provides a natural monopoly that spans key shipping corridors in Canada, and the U.S. |
| MTUAY | MTU is an aerospace engine manufacturer; the company has a duopolistic market share position in the narrow body market and a multi-year order backlog that results in a high degree of revenue visibility. |
| BARC.L | Banks rebounded strongly in 2Q, leading the Financials sector higher. Although the Cambiar portfolio participated via our positions in Barclays, ING, and DBS Group, these gains were offset by drawdowns within non-credit holdings such as AIA Group (insurance) and London Stock Exchange (LSE). |
| INGA.AS | Banks rebounded strongly in 2Q, leading the Financials sector higher. Although the Cambiar portfolio participated via our positions in Barclays, ING, and DBS Group, these gains were offset by drawdowns within non-credit holdings such as AIA Group (insurance) and London Stock Exchange (LSE). |
| D05.SI | Banks rebounded strongly in 2Q, leading the Financials sector higher. Although the Cambiar portfolio participated via our positions in Barclays, ING, and DBS Group, these gains were offset by drawdowns within non-credit holdings such as AIA Group (insurance) and London Stock Exchange (LSE). |
| 1299.HK | Banks rebounded strongly in 2Q, leading the Financials sector higher. Although the Cambiar portfolio participated via our positions in Barclays, ING, and DBS Group, these gains were offset by drawdowns within non-credit holdings such as AIA Group (insurance) and London Stock Exchange (LSE). |
| LSEG.L | The weakness in LSE's stock price over the past year is primarily due to AI disruption concerns around the company's data/analytics business. Yet LSE's most recent earnings show that AI has actually been a demand accelerator, as they are able to charge for AI models to access their proprietary data. Given the combination of attractive valuation, quality business franchise and attractive capital return policies, we believe LSE offers a compelling risk/reward. |
| CARL-B.CO | Sales similarly were varied in nature, with the team selling Barry Callebaut in favor of Carlsberg within Consumer Staples, as well as a reduction in Healthcare exposure via liquidations of Icon and UCB. |
| COLOB.CO | More specifically, our decision to remain patient with positions such as Nintendo, Coloplast, and MonotaRO have hampered shorter term results. While uncomfortable in the moment, we continue to believe that these companies can deliver improved results and drive positive outcomes for the portfolio in the coming quarters. |
| 3064.T | More specifically, our decision to remain patient with positions such as Nintendo, Coloplast, and MonotaRO have hampered shorter term results. While uncomfortable in the moment, we continue to believe that these companies can deliver improved results and drive positive outcomes for the portfolio in the coming quarters. |
| NTDOY | More specifically, our decision to remain patient with positions such as Nintendo, Coloplast, and MonotaRO have hampered shorter term results. While uncomfortable in the moment, we continue to believe that these companies can deliver improved results and drive positive outcomes for the portfolio in the coming quarters. |
| TSM | The rally extends beyond the U.S. – as seen in the price gains for companies such as SK Hynix, Murata Manufacturing, Kioxia Holdings, ASML, and Taiwan Semiconductor. |
| ASML | The rally extends beyond the U.S. – as seen in the price gains for companies such as SK Hynix, Murata Manufacturing, Kioxia Holdings, ASML, and Taiwan Semiconductor. |
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