Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st March 2026
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Federated Hermes expects emerging market debt to continue outperforming in 2026, driven by surging commodity prices that create powerful macroeconomic tailwinds. Gold delivered exceptional gains in 2025, rising 68% and setting 53 new all-time highs, while copper surged over 40% to trade above $13,000 per tonne. These price increases significantly benefit major commodity exporters including Ghana, Zambia, Chile, Uzbekistan, and Turkey through stronger export revenues, improved fiscal positions, and currency appreciation. The gold rally was driven by macroeconomic uncertainty, geopolitical risk, and robust central bank buying, with momentum expected to continue due to Middle East conflicts and flight-to-quality dynamics. Copper demand is being driven by AI infrastructure expansion, renewable energy systems, and electric vehicles, with consumption projected to grow from 28 million metric tonnes in 2025 to 42 million by 2040. The managers believe these structural commodity dynamics will enhance emerging market resilience and returns in an uncertain global environment.
Rising gold and copper prices create powerful macroeconomic tailwinds for emerging markets, strengthening exports, fiscal revenues, currency stability, and investment conditions for commodity-producing economies.
The managers expect the continued strength of precious and industrial metals to support further outperformance in select emerging market regions in 2026. They believe commodity dynamics will significantly reinforce economic outlooks and enhance resilience in an uncertain global environment, with structural demand tied to energy transition and technological growth providing long-term support.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 30 2026 | 2026 Q1 | - | commodities, Copper, Em Debt, emerging markets, Energy Transition, gold, Mining | - | Emerging market debt positioned for continued outperformance in 2026 as soaring gold and copper prices create powerful tailwinds for commodity-exporting economies. Gold's 68% surge and copper's 40% rally strengthen exports, fiscal revenues, and currencies across key markets including Ghana, Chile, Zambia, and Uzbekistan, supported by structural demand from energy transition and AI infrastructure expansion. |
| Feb 16 2025 | 2024 Q4 | BRK-B | AI, diversification, emerging markets, global, rates, technology, value | - | Fortress delivered positive Q3 returns across all funds while maintaining their disciplined value approach. The manager sees elevated risk in expensive U.S. tech stocks driven by AI enthusiasm but continues finding attractive opportunities in international and emerging markets. Their globally diversified portfolio positioning reflects confidence in long-term value creation outside overvalued market segments. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
GoldGold delivered exceptional gains in 2025, rising 68% and setting 53 new all-time highs, driven by macroeconomic uncertainty and geopolitical risk. The momentum may continue into 2026 due to Middle East conflicts potentially spurring inflation and flight-to-quality dynamics. Rising gold prices significantly strengthen emerging market economies that are major exporters like Ghana and Uzbekistan. |
Gold Precious Metals Central Banks Safe Haven Inflation |
CopperCopper prices surged over 40% year-over-year to trade above $13,000 per tonne, driven by AI infrastructure expansion, data centers, renewable energy systems, and electric vehicles. Global demand is projected to grow from 28 million metric tonnes in 2025 to 42 million by 2040, creating powerful economic tailwinds for major producers like Chile and Zambia. |
Copper Critical Minerals AI Infrastructure Energy Transition Electric Vehicles | |
Emerging marketsEmerging market debt delivered strong performance in 2025 with the JP Morgan EM Global Diversified Index up 14.3%. The continued strength of precious and industrial metals is expected to support further outperformance in select regions in 2026, particularly benefiting commodity-exporting economies through stronger exports, fiscal revenues, and currency stability. |
Emerging Markets EM Debt Commodities Currency Exports | |
Energy TransitionThe rapid expansion of renewable energy systems, electric vehicles, and grid modernization is driving structural demand for copper and other critical minerals. These large-scale shifts in energy infrastructure are creating sustained demand growth that supports higher commodity prices and benefits emerging market producers. |
Energy Transition Renewable Energy Electric Vehicles Grid Modernization Infrastructure | |
| 2024 Q4 |
AIArtificial intelligence remained the dominant theme supporting global stocks this quarter. AI buildout brought excitement and higher valuations in an already expensive part of the equity market. Technology developments have played an enormous role in markets, fuelling momentum in shares of companies linked to AI. |
Technology Valuations Momentum Growth Innovation |
Emerging marketsEmerging markets stocks posted the strongest returns this quarter. Constructive trade talks, good valuations and the government's shift to supporting private enterprise lifted Chinese stocks, adding to returns in an already strong year. The Fund's core allocation to emerging equities via the Fortress Emerging Markets Fund returned between 4% and 15%. |
China Trade Valuations Government Policy Returns | |
RatesA much-anticipated cut in interest rates from the U.S. Federal Reserve supported stock and bond markets. In September, the Fed lowered its target rate, a move widely anticipated and positively received by the market. Expectations for rate cuts were tailwinds for markets. |
Federal Reserve Monetary Policy Bond Markets Central Banks Policy |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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