| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | 14.1% |
Davis Global Fund delivered a strong 14.12% return in the first half of 2025, outperforming the MSCI ACWI benchmark by over 400 basis points. Performance was driven by a diverse group of companies across financials, communication services, information technology and healthcare. Key contributors included Meta with its heavy AI investments, Chinese technology companies NetEase and Sea Limited, and Samsung Electronics in semiconductors. The fund maintains focus on competitively advantaged companies with strong management teams trading at attractive valuations. Chinese holdings remain a significant theme, with companies positioned at the forefront of cutting-edge industries including electric vehicles, battery production, and robotics, while trading at substantial discounts to global markets. Despite high market valuations presenting ongoing risks, the portfolio emphasizes durability and resilience through companies with strong balance sheets and cash generation power. The manager expects these characteristics to produce good results through shifting economic conditions while remaining vigilant about inflationary pressures, trade relations, and geopolitical volatility.
Davis Global Fund focuses on owning competitively advantaged companies run by experienced managers trading at attractive valuations, with particular emphasis on Chinese companies that remain attractively valued and are increasingly at the forefront of cutting-edge industries.
We remain watchful for risks which include the high valuation of certain stocks, inflationary pressures, trade relations, large government deficits and debt levels, geopolitical volatility and recession threats. However, our portfolio has been built with a focus on durability and resilience. We expect our portfolio companies' strong balance sheets, cash generation power and adaptability to produce good results through shifting economic conditions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 25 2025 | 2025 Q2 | 005930.KS, 3690.HK, 8058.T, 9999.HK, APP, COF, CVS, META, NTES, SE, TCOM, VTRS | AI, China, financials, gaming, healthcare, technology, Valuations |
SOLV NTES 8001 JP META NTES 8001.T SVM |
Davis Global Fund returned 14.12% in H1 2025, outperforming benchmarks through selective investing in undervalued, competitively advantaged companies. Chinese holdings drove strong performance while trading at significant discounts to global markets. Despite elevated market valuations and macro uncertainties, the portfolio emphasizes durable companies with strong cash generation positioned for long-term success. |
| Dec 31 2024 | 2024 Q4 | 005930.KS, 0700.HK, 2318.HK, 3690.HK, AMAT, AMZN, BRK-A, COF, CVS, ENT.L, GOOGL, HUM, META, MGM, NPN.L, PRX.AS, TCOM | AI, China, gaming, global, semiconductors, Stimulus, technology, value | - | Davis Global Fund returned +22.70% in 2024, outperforming benchmarks through Chinese consumer companies and U.S. tech giants. China appears to be emerging from economic slump with government stimulus driving recovery. Portfolio positioned for AI through established market leaders while maintaining value discipline. Despite high market valuations, fund emphasizes durable, competitively advantaged companies at attractive prices. |
| Jul 25 2024 | 2024 Q2 | 005930.KS, 0700.HK, 1299.HK, 3690.HK, AMAT, AMZN, BAER.SW, BRK-B, COF, D05.SI, DANSKE.CO, DAR, GOOGL, HUM, INTC, META, NPSNY, PRX.AS, TSN, WFC | AI, China, global, semiconductors, technology, value | - | Davis Global Fund outperformed in H1 2024 driven by AI beneficiaries Meta, Amazon, and Applied Materials. The fund trades at a 45% discount to markets while maintaining similar growth rates. Manager emphasizes portfolio resilience given elevated fiscal risks and sees attractive opportunities in undervalued Chinese equities despite near-term headwinds. |
| Dec 31 2023 | 2023 Q4 | 005930.KS, 081660.KS, 1299.HK, 2318.HK, 2423.HK, 3690.HK, 9618.HK, AMAT, AMZN, BAER.SW, COF, D05.SI, GOLF, GOOGL, META, MGM, MSFT, NVDA, OC, VTRS | AI, China, financials, global, rates, technology, value | - | Davis Global Fund returned 17.21% in 2023 but lagged the index due to Chinese holdings. The end of the free money era creates opportunities for value investors. Portfolio trades at 48% discount to global markets despite superior earnings growth. Positioned for AI through infrastructure plays and Chinese recovery through deeply discounted quality companies. |
| Jan 3 2023 | 2022 Q4 | 2318 HK, META, OC | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
ChinaChinese companies remain attractively valued and are increasingly at the forefront of cutting-edge industries. China leads in electric vehicle production, battery cell production, solar panel production, and is growing in biotech and robotics. The MSCI China Index trades at a 39% discount to MSCI ACWI. |
Innovation Valuation Technology Manufacturing STEM |
AIMeta is investing heavily in artificial intelligence and plans to spend approximately $70 billion this year, mainly on data centers, and hiring some of the most sought-after AI talent. The Chinese DeepSeek AI model caused market volatility by showing ability to create leading-edge AI with lower computational resources. |
Data Centers Investment Technology Semiconductors | |
GamingNetEase's recently launched games have performed well, with the company being the second largest online video game developer in China. AppLovin has become the leading platform for in-game advertising with strong returns on advertising spend driving revenues and earnings up 40% and 110% year-over-year respectively. |
Mobile Advertising Revenue Growth | |
ValuationsHigh stock market valuations continue to be a major risk facing investors today. The S&P 500 Index was almost two standard deviations above its historic average at the end of March 2025. However, DGF portfolio companies have attractive valuations well below the benchmark despite strong earnings growth. |
Risk Premium Discount Earnings | |
| 2024 Q4 |
AIFund positioning for AI emergence through established market leaders with proven business models either using AI to improve platforms or key semiconductor players building AI ecosystem. Meta using AI for content suggestions and ad targeting. Tencent benefiting from AI-driven ranking improvements. Cloud providers Amazon and Alphabet seeing revenue acceleration from AI workloads. |
Artificial Intelligence Machine Learning Cloud Computing Semiconductors Data Centers |
ChinaChina emerging from economic slump following aggressive government stimulus in late 2024. Property market stabilizing, retail sales improving, GDP growth strengthening to 5.4% in Q4. Government announced RMB 3 trillion sovereign bond issuance and measures to boost consumption including monthly child allowances. |
Stimulus Property Market Consumption Economic Recovery Government Policy | |
SemiconductorsFocus on memory market leadership, particularly high-bandwidth memory (HBM) for AI applications. Samsung expected to qualify as second supplier to Nvidia in 2025, growing HBM market share from 40% to 50%. Applied Materials benefiting from advanced packaging and multi-chip integration demands. |
Memory HBM Foundry Equipment AI Infrastructure | |
GamingGaming industry revenues had 13% CAGR from 2011-2023, growing to $132 billion annually with continued double-digit growth expected. Entain positioned in largest regulated markets with leadership positions. MGM Resorts facing execution issues in online sports gaming but positioned for recovery. |
Sports Betting Online Gaming Casinos Entertainment Digital Transformation | |
TravelChinese consumers showing strong desire to travel domestically and abroad. Trip.com benefiting as largest online travel agency in China with 35% of revenues from international markets. Strong growth prospects in outbound travel market and international business expansion. |
Online Travel Tourism Recovery China Outbound Digital Platforms Leisure Travel | |
| 2024 Q2 |
AIAI drove strong earnings for many portfolio companies including Meta, Amazon and Applied Materials. Meta is creating huge value by using AI to improve content and retool advertising to engage target audiences more precisely. Applied Materials benefits from AI demand through advanced packaging for high-bandwidth memory and multi-chip integration. |
Artificial Intelligence Machine Learning Content Advertising Semiconductors |
ChinaDespite weaker consumer spending levels, drivers of long-term economic growth in China are in place with high levels of technological innovation and talent. Low equity valuations and strong cash returns to shareholders create opportunities in select Chinese investments. China has made dramatic progress in scientific research and innovation. |
Innovation Technology Valuations Research Growth | |
SemiconductorsSemiconductor equipment manufacturer Applied Materials was a major contributor, driven by long-term secular trends in AI, IoT, electric vehicles and clean energy. Samsung is positioned to benefit from AI opportunity as the largest semiconductor memory manufacturer, particularly in high-bandwidth memory for AI computing. |
Memory Equipment Manufacturing HBM Foundry | |
| 2023 Q4 |
AIGenerative AI represents a significant platform transition in computing history, potentially bigger than PC, mobile, or internet. The manager expects widespread economic and societal impact but acknowledges uncertainty about how breakthroughs will unfold. Focus is on companies positioned to benefit from AI infrastructure and applications rather than speculative direct plays. |
Generative AI GPUs Cloud Computing Deep Learning Large Language Models |
ChinaDespite real estate headwinds, China's economy remains sound with manageable challenges. The weak property market is unlikely to cause a banking crisis due to high down payments and strong bank capitalization. Government support is increasing and Chinese holdings trade at very attractive valuations. |
Real Estate Banking System Economic Growth Government Support Valuations | |
RatesThe normalization of interest rates after the free money era represents the biggest shift in the investment landscape in decades. This creates headwinds for former market darlings but tailwinds for durable, attractively valued businesses with strong fundamentals. |
Interest Rates Federal Reserve Quantitative Easing Valuation Discipline Free Money Era | |
ValueThe portfolio trades at a significant discount to global markets at 9.5x forward earnings versus 18.2x for MSCI ACWI, despite superior earnings growth. This valuation gap positions the fund well for future returns as markets return to fundamentals. |
Valuation Discount Forward P/E Earnings Growth Fundamental Analysis Price-to-Earnings |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 25, 2025 | Fund Letters | Danton Goei | SOLV | Solventum Corporation | Health Care | Health Care Supplies | Bull | NYSE | deleveraging, healthcare, Margins, Recurring, spinoff | Login |
| Aug 25, 2025 | Fund Letters | Danton Goei | NTES | NetEase, Inc. | Communication Services | Interactive Home Entertainment | Bull | NASDAQ | Franchises, Gaming, growth, Mobile, monetization | Login |
| Aug 25, 2025 | Fund Letters | Danton Goei | 8001 JP | ITOCHU Corporation | Industrials | Trading Companies & Distributors | Bull | NYSE | conglomerate, diversification, Japan, ROE, valuation | Login |
| Jun 30, 2025 | Fund Letters | Davis Global Fund | NTES | NetEase | Communication Services | Interactive Media & Services | Bull | NASDAQ | China, entertainment, founder-led, Free-to-Play, Gaming, MMORPG, Mobile Games, Virtual Items | Login |
| Jun 30, 2025 | Fund Letters | Davis Global Fund | 8001.T | ITOCHU Corporation | Industrials | Trading Companies & Distributors | Bull | Tokyo Stock Exchange | Berkshire Model, capital allocation, Diversified, dividend, Japan, Sogo Shosha, Trading Company, Value | Login |
| Jun 30, 2025 | Fund Letters | Davis Global Fund | META | Meta Platforms | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, Artificial Intelligence, data centers, growth, social media, technology, user engagement, virtual reality | Login |
| Jun 30, 2025 | Fund Letters | Davis Global Fund | SVM | Solventum Corporation | Health Care | Health Care Equipment & Supplies | Bull | NYSE | 3M, healthcare, Infection Prevention, Medical devices, spinoff, turnaround, Value, wound care | Login |
| TICKER | COMMENTARY |
|---|---|
| META | Meta, a top three position in DGF, returned 26% in the first half of 2025. Revenues and earnings rose by 17% year-over-year in 1Q25. Advertising remains the key business driver with ad impressions growing 5% and the price per ad rising 10% in the first quarter. User growth and engagement remain strong—daily active users were up 6% to an incredible 3.4 billion in the first quarter. Meta is investing heavily in artificial intelligence (AI) and plans to spend approximately $70 billion this year, mainly on data centers, and hiring some of the most sought-after AI talent. Given its growth opportunities Meta remains attractive at 27x 2026 owner earnings and 22x if we exclude the investment being made in the Reality Labs augmented reality/virtual reality (AR/VR) glasses platform. |
| COF | Capital One achieved strong results in 1Q25—revenues rose +6% year-over-year, driven by share gains in credit cards at attractive economics with credit charges stabilizing. The bank closed its merger with Discover in May, making the combined entity the nation's sixth largest bank. We expect it to realize significant synergies through rationalization of overlapping costs and debit card network savings. Over time Capital One can build out the Discover credit card network on a global basis, creating real value. Like Danske Bank, Capital One is very overcapitalized and we expect a meaningful return of capital to shareholders. |
| NTES | NetEase gained 54% and NetEase's recently launched games have performed well, and strong cost discipline led owner earnings to grow by 38% year-over-year in 1Q25. NetEase is the second largest online video game developer and publisher in China. Like many Chinese internet companies, NetEase is a founder-led company with William Ding (only 53 years old) at its helm. Even after its strong year-to-date performance in 2025, NetEase remains reasonably priced at just 14x expected 2026 owner earnings, given its improved growth outlook and best-in-class management team with a long track record of shareholder returns. |
| SE | Southeast Asia's dominant e-commerce platform, Sea Limited, was up 51% in the first half of 2025. Meanwhile Shopee, owned by Sea Limited, saw revenues rise 28% and earnings flip sharply positive in the first quarter of 2025 compared to last year when Shopee was still in investment mode. |
| 005930.KS | Samsung Electronics returned 24% and Samsung revenues rose 10% year-over-year in 1Q25 as demand for memory chips remained strong and its handset business sold 61 million units during the quarter (compared to Apple's 50 million) with good pricing. Uncertainty remains around tariff levels and export controls but Samsung, the world's largest memory and handset manufacturer and second-largest semiconductor foundry, trading at only 9x owner earnings, remains attractive. |
| APP | AppLovin Corporation returned 41% from when we purchased it in March of this year. AppLovin is a new position that we started in March when the stock fell as the company faced allegations that it improperly used consumer data to improve advertising effectiveness, and that its ads were of poor quality. AppLovin has become the leading platform for in-game advertising. Advertisers are seeing strong returns on advertising spend, driving the company's revenues and earnings up 40% and 110% year-over-year, respectively, in 1Q25. |
| CVS | CVS is a leading health insurer, pharmacy benefit manager and drug retailer where concerns around Medicare cost trends provided an attractive entry point in 4Q24. In 1Q25 CVS' Medicare unit reported better cost trends than feared, leading to a 7% rise in revenues and 55% increase in profits. CVS returned 57% in the first half of 2025. |
| VTRS | Viatris, an American pharmaceutical and healthcare company was a detractor from performance in the first half of 2025 with a −26% return. The closure of one of its manufacturing plants in India is a temporary setback. The company faced pricing pressure in Japan in 1Q25, somewhat offset by growth in China, leading to a 3% year-over-year revenue decline in the quarter, adjusted for divestitures and foreign exchange. Trading at 5x owner earnings, with a dividend yield above 5% and repurchasing 3% of its shares every year, Viatris remains attractive, in our view. |
| 3690.HK | Meituan, the leading food delivery company in China, was down 18% in the first half of 2025 as competition from JD.com and Alibaba is expected to hurt profitability in 2025. Competition in the instant shopping space (fast delivery in under one hour) has spilled into food delivery. However, since Meituan's competitors are relying on unprofitable consumer subsidies to take share, we expect the intensity of competition to eventually subside, as it did in other industries facing similar situations such as ridesharing, in-store marketing, online travel and e-commerce. |
| TCOM | The leading Chinese online travel agency Trip.com Group was down 14% in the first half of 2025 as margins disappointed, mainly due to its increased investment in its international Trip.com app. Revenues grew a healthy 16% year-over-year in 1Q25, but operating profits only grew 7% instead of slightly improving, as is usual. However, we support management's decision to sacrifice short-term profit margins to grow air ticketing and hotel room volumes (which rose 60% in 1Q25) to invest in the long-term health of the Trip.com platform. |
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