| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
First Eagle's 2025 performance validated their contrarian positioning as gold surged 60% and non-US stocks outperformed US markets for the first time since 2017. The firm's disciplined approach focuses on resilient wealth creation through assets with scarcity value that can participate in nominal economic drift. Key holdings include Grupo Mexico for copper exposure, TSMC for AI semiconductor leadership, and Bio-Rad for healthcare diversification. The team sees significant fat-tail risks from massive sovereign debt and geopolitical bifurcation, while persistent deficit spending creates policy dilemmas between inflation and recession risks. In credit markets, they observe late-cycle behavior with deteriorating underwriting standards, positioning defensively with emphasis on selectivity. Municipal bonds absorbed record issuance driven by infrastructure needs. Small caps may benefit from earnings recovery and supportive monetary policy. The firm completed organizational changes including Genstar Capital's majority investment and plans to acquire Diamond Hill Investment Group, positioning for expanded capabilities while maintaining investment discipline focused on downside protection and long-term compounding.
First Eagle emphasizes resilient capital in pursuit of long-term returns through thoughtful allocations to risk assets with scarcity value, focusing on fixed positional assets like gold and quality equities that can participate in nominal drift of the economy while providing downside mitigation during challenging periods.
The team remains purposeful in their approach to resilient wealth creation, following a path that can keep pace with nominal drift while providing downside mitigation. They believe this hinges on identifying assets with scarcity value and acquiring them at a margin of safety. Despite strong markets creating confidence, significant fat-tail risks persist including massive sovereign debt loads and shifting geopolitical alliances.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 5 2026 | 2025 Q4 | BIO, GMEXICOB.MX, TSM | AI, Copper, global value, gold, infrastructure, municipal bonds, private credit, small cap |
TSM BIO |
First Eagle's contrarian positioning paid off in 2025 as gold surged 60% and non-US stocks outperformed. The firm maintains focus on resilient wealth creation through scarcity assets like gold, quality equities, and defensive credit positioning. Despite market confidence, they see significant risks from sovereign debt loads and geopolitical shifts, emphasizing downside protection while positioning for long-term nominal drift participation. |
| Oct 22 2025 | 2025 Q3 | - | AI, defense, gold, Non-US, rates, risk, Valuations | - | US markets appear priced for perfection with elevated valuations creating vulnerability to disappointment, while international markets offer better value with constructive policy dynamics emerging. Gold's 50% surge alongside equities echoes 1970s stagflation conditions. The firm favors international opportunities over richly valued US assets while maintaining portfolio discipline through capital recycling. |
| Jul 22 2025 | 2025 Q2 | - | Dollar, fiscal policy, Global Markets, inflation, Labor Market, Resilience, Trade Policy | - | First Eagle warns that while markets suggest economic equilibrium, significant inflation risks from labor supply shocks and fiscal largesse remain under-appreciated. Trade policy volatility and dollar weakness favor non-US markets, with MSCI EAFE outperforming S&P 500 by over 1,300 basis points. The firm emphasizes resilient assets amid persistent uncertainty from geopolitical conflicts and policy dynamics. |
| Apr 3 2025 | 2025 Q1 | - | Defense Spending, fiscal policy, Geopolitical Risk, inflation, Market Volatility, Resilience, tariffs, Trade Policy | - | Trump's tariff policies triggered market chaos and profound global instability after initial post-election optimism faded. With persistent US inflation, structural debt challenges, and deteriorating business confidence, the investment environment faces multiple headwinds. Non-US markets outperformed amid increased fiscal spending abroad. Given elevated uncertainty and nonlinear risk, resilience becomes the priority investment objective. |
| Jan 8 2025 | 2024 Q4 | - | China, diversification, Fiscal, global, gold, inflation, value | - | First Eagle argues diversification will matter again as concentrated US tech dominance faces headwinds from US-China decoupling and fragile inflation dynamics. China's stimulus efforts may reverse disinflationary support while US faces persistent wage pressures and massive fiscal deficits. Team maintains diversified approach with strategic gold allocation rather than chasing narrative-driven concentration. |
| Oct 22 2024 | 2024 Q3 | - | China, Fed, Geopolitical, gold, inflation, rates, Stimulus, value | - | First Eagle highlights the shifting dynamics between US soft landing hopes and China's stimulus response, while advocating for quality assets with cross-cycle resilience. Gold's 12.9% quarterly gain reflects its safe haven appeal amid global risks including currency debasement and geopolitical tensions. The firm maintains focus on scarce quality and value rather than directional market positioning. |
| Jul 26 2024 | 2024 Q2 | - | emerging markets, Geopolitical, global, Macro, monetary policy, risk, value | - | First Eagle sees mounting economic risks including fiscal deficits, geopolitical tensions, and potential economic stall despite continued market advances driven by AI and GLP-1 narratives. While acknowledging macro headwinds from Fed policy uncertainty to global political instability, the firm remains constructive on quality portfolio companies with strong market positions and resilient cash generation capabilities. |
| May 7 2024 | 2024 Q1 | CLX, KO | Deficit Spending, Geopolitical, gold, inflation, Nominal Drift, Resilience, Valuations | - | First Eagle sees massive global deficit spending creating higher nominal drift, benefiting resilient companies whose performance tracks nominal growth. Gold's record highs despite rate headwinds signal potential market stress ahead. If soft landing fails or geopolitical risks escalate, markets may pivot from growth to resilience premiums, favoring defensive businesses positioned to capture nominal drift dynamics. |
| Jan 24 2024 | 2023 Q4 | - | Geopolitical, gold, inflation, Quality, risk, Valuations, value | - | First Eagle sees markets exhibiting dangerous complacency about mounting risks including Fed landing challenges, fiscal unsustainability, and geopolitical tensions. Value stocks remain historically cheap versus growth while gold offers hedge potential. Quality businesses with consistent cash flows may be the best defense when risk aversion inevitably returns to more normal levels. |
| Sep 30 2023 | 2023 Q3 | - | Federal Reserve, Fiscal, gold, inflation, monetary policy, rates, Treasury | - | Markets resist Fed's higher for longer stance despite strong economic data and improving inflation. Troubling fiscal dynamics create Treasury supply/demand imbalances while political dysfunction prevents meaningful reform. Gold's resilience amid rising real rates reflects central bank demand and geopolitical concerns. Economy remains resilient but faces mounting challenges as policy tightening effects accumulate. |
| Aug 22 2023 | 2023 Q2 | CCL, CNC, MERC, PRAA, SPLS, UNFI | Corporate Bonds, credit, distressed, Federal Reserve, fixed income, high yield, interest rates | - | First Eagle High Income Fund maintains defensive positioning in high yield credit, focusing on shorter-duration, higher-quality securities amid rising credit stress and Fed hawkishness. With over $50 billion in distressed exchanges year-to-date and expectations for an extended default cycle, the fund emphasizes selectivity and countercyclical capital allocation as spread widening creates idiosyncratic opportunities. |
| Apr 27 2023 | 2023 Q1 | - | Banking, Credit Stress, Fed policy, gold, liquidity, rates, sovereign risk, value | - | First Eagle maintains defensive positioning following Q1 banking failures, viewing them as symptoms of broader systemic vulnerabilities from Covid stimulus and Fed tightening. The team warns of potential sovereign credibility crisis given massive government debt levels. Portfolio emphasizes resilient companies with strong balance sheets, large banks over regional ones, and gold as hedge against systemic risks. |
| Jan 13 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Healthcare ITCareCloud helps smaller U.S. health practices manage data and collect payments. High switching costs lock in practices but also lock out competitors. Most RCMs have high fixed costs and too few clients, creating consolidation opportunities for CareCloud to buy cheaply and cut costs. |
EHR RCM Healthcare Consolidation Switching Costs |
CementICG owns cement plants in Kazakhstan and Tajikistan with significant energy and transport cost advantages. Newest dry process plants with heat recovery versus competitors' older wet process plants. Strategic locations 100km closer to customers than competitors. |
Energy Efficiency Transport Kazakhstan Cost Advantage Infrastructure | |
ConstructionCTR Holdings builds structural frames and handles finishing work in Singapore. Most projects are public with stable government payments guaranteeing cash flow. Company had significant net cash and signed project backlog. |
Singapore Government Cash Flow Backlog Infrastructure | |
| 2025 Q3 |
GoldGold has surged nearly 50% year-to-date, reaching an annual pace not seen in nearly 50 years as central banks and investors pile into the metal amid elevated risks and potential currency debasement. Other precious metals including silver and platinum have also broken out to the upside. |
Gold Silver Platinum Currency |
Risk AppetiteUS markets appear priced for perfection with rich equity valuations, tight high yield spreads, low implied volatility, and growth-to-value ratios near all-time highs. This environment may be particularly susceptible to disappointment amid even modest shifts in sentiment. |
Valuations Volatility Sentiment Risk | |
AIContinued artificial intelligence spending has helped support equity market rebounds and earnings expectations. AI capex cycle remains a key driver of constructive earnings growth forecasts in the US market. |
AI Capex Technology Earnings | |
Defense SpendingGermany has taken steps to leverage its ample fiscal capacity on defense projects, and NATO countries as a whole agreed to raise annual defense spending to 5% of GDP by 2035, supporting constructive dynamics in non-US economies. |
NATO Defense Germany Fiscal | |
Infrastructure SpendingGermany has leveraged its fiscal capacity notably on infrastructure projects alongside defense spending. China's multiyear debt-restructuring initiative for local governments appears to be bearing fruit and enabling infrastructure investment. |
Infrastructure Germany China Fiscal | |
| 2025 Q2 |
InflationThe manager believes the potential for resurgent inflation remains significant and under-appreciated by investors, likely emanating from the labor market. The combination of shrinking labor-force growth and ongoing fiscal largesse threatens to reignite wage pressures in still-tight labor markets. |
Wage Inflation Labor Market Fiscal Policy Interest Rates Fed Policy |
Trade PolicyTrump's April 2 announcement of reciprocal tariffs on trading partners globally caused major equity indexes to lose more than 15% in a few days. Trade issues remain unresolved with ongoing tariff drama including copper and Brazil, Canada and the European Union tariffs, making trade policy a moving target. |
Tariffs Trade War Global Trade Trump Administration Protectionism | |
DollarThe US dollar has weakened sharply year-to-date 2025, with non-US markets outperforming as a result. At levels not seen since the mid-1980s, the dollar remains exceptionally strong relative to trading partners even after recent weakening, with further weakening possible as foreign investors trim oversized US exposures. |
Currency Dollar Weakness Exchange Rates International Markets Capital Flows | |
ResilienceWith clarity in short supply amid trade policy uncertainty, labor market risks, and geopolitical strife, the manager highlights the importance of exposure to assets that have the potential to demonstrate resilience across multiple states of the world. |
Portfolio Construction Risk Management Diversification Defensive Positioning Uncertainty | |
| 2025 Q1 |
Trade PolicyTrump's sweeping global tariff package introduced profound instability to the global order, with a baseline 10% charge on all imports and steeper rates on countries deemed bad actors. The tariff announcement unleashed a rout across risk assets worldwide and significant spike in volatility. Tariffs were mentioned more than 800 times in investor events during the first quarter, the highest rate in 15 years. |
Tariffs Trade War Import Duties Protectionism Global Trade |
InflationHard economic data showed persistent economic growth alongside stubbornly above-target inflation in the US. The positive output gap indicates the economy is operating above potential, creating inflationary impulse. Easy fiscal policy creates difficult choices between containing spending to reduce inflation risk or taking action that increases recession risk. |
Price Pressures Output Gap Monetary Policy Fed Policy Economic Overheating | |
Defense SpendingDefense spending comprised just 2.9% of GDP in 2024, slightly above the all-time low. Given shifting alliances amid an increasingly shaky geopolitical landscape, this rate is unlikely to go lower. Trump announced plans to request $1 trillion for defense in fiscal 2026 budget, up from about $850 billion in 2025. |
Military Budget Geopolitical Risk NATO Security Spending Defense Contractors | |
ResilienceGiven the lack of historical comparisons and clarity around many important variables in the current environment, the aggregate impact of various risks suggests a greater likelihood of nonlinear market moves. In such an environment, resilience seems a worthy investment goal amid the chaos and instability. |
Risk Management Defensive Positioning Portfolio Protection Volatility Uncertainty | |
| 2024 Q4 |
GoldGold demonstrated remarkable resilience establishing new nominal highs despite conditions not typically associated with price appreciation. Central banks actively accumulated gold to diversify reserves, providing key price support. The team views gold as the best potential hedge against portfolio risks despite crypto enthusiasm. |
Gold Central Banks Safe Haven Currency Debasement Hedge |
ChinaChina's economy faces significant challenges including property market collapse, tech crackdown aftermath, and deflated animal spirits. The MSCI China Index finished 2024 down more than 50% from its early-2021 peak. Recent stimulus measures announced but initial fiscal package was underwhelming in size and scope. |
China Property Stimulus Deflation Economic Policy | |
InflationUS inflation battle has reached only fragile peace with wage inflation of 4.3% remaining inconsistent with Fed's 2% goal. China's manufacturing shift has provided disinflationary impulse globally, but reversal of China's fortunes could make US vulnerable to renewed inflation pressures. |
Inflation Wages Fed Policy Disinflationary Price Pressures | |
| 2024 Q3 |
GoldGold continued its strong rally during the third quarter, setting new nominal highs as it climbed 12.9%. The metal benefited from traditional tailwinds like falling real interest rates and a weaker dollar, alongside recognition of global risks including geopolitical tensions and currency debasement concerns. Gold's resilience throughout 2024 across disparate macroeconomic backdrops underscores its role as a strategic hedge against adverse market outcomes. |
Safe Haven Currency Debasement Geopolitical Risk Real Rates Dollar |
ChinaChina's policymakers were finally spurred to action in late September with a series of stimulus measures to combat mounting deflationary pressures and stabilize markets. The PBOC cut reserve requirements and benchmark rates while introducing new liquidity mechanisms to support equity markets. The MSCI China Index surged 23.6% in September, though deeper structural challenges including property market oversupply and local government debt reliance likely will persist without more targeted action. |
Stimulus Deflation Property Market PBOC Monetary Policy | |
RatesThe Federal Reserve kicked off its much-anticipated rate-cut cycle with an oversized 50 basis point cut, bringing the federal funds rate to 4.75-5.00%. Fed Chair Powell characterized this as a policy recalibration reflecting confidence in preserving labor market strength amid healthy growth and cooling inflation. However, unflagging labor strength runs the risk of sparking inflationary pressures anew, potentially forcing a premature end to the rate-cut cycle. |
Fed Rate Cuts Labor Market Inflation Monetary Policy | |
| 2024 Q2 |
InflationThe Federal Reserve continues to offer a cautious outlook despite modest progress toward inflation goals, with only one rate cut projected by year end. Stimulating an economy with no obvious slack risks triggering an unwelcome asymmetric inflationary response, particularly given troubling fiscal dynamics. |
Rates Monetary Policy Fed Fiscal Policy Economic Policy |
AIArtificial intelligence developments continue to fuel investor enthusiasm in certain companies and segments of the stock market as part of the narrative economics driving growth stock outperformance. |
Technology Growth Innovation Semiconductors | |
GLP1GLP-1 agonists represent another area of narrative economics fueling investor enthusiasm in certain companies and market segments during the quarter. |
Biotechnology Pharmaceuticals Healthcare Innovation | |
| 2024 Q1 |
GoldGold broke sharply higher in March, rallying more than 8% to finish at an all-time nominal high above $2,200 despite headwinds of higher real interest rates and a stronger dollar. Central banks have been massive buyers, with net purchases of 1,037 tonnes in 2023, led by emerging market central banks including China which has increased reserves for 16 consecutive months. |
Gold Central Banks Inflation Dollar |
InflationThe hot inflation print released in early April was above expectations and may derail the 2024 rate cuts that both the market and the Fed appear to want. Stubborn but manageable inflation appeared to bolster hopes for a soft landing, though the challenging push-pull between fiscal and monetary policies complicates the Federal Reserve's efforts to fully rein in inflation. |
Inflation Rates Monetary Policy | |
Defense SpendingDeteriorating global relations have prompted ever-rising defense budgets across the developed world, contributing to deficit spending and nominal drift. Tumultuous geopolitical conditions continue to feed into the investment environment from the top down, even without the emergence of a truly global conflagration. |
Defense Geopolitical Government Spending | |
| 2023 Q4 |
GoldGold remains undervalued relative to equities and has played its role as a hedge against adverse events despite rising real interest rates. The metal surged after Hamas' attack on Israel and continued climbing through 2023, establishing a new all-time nominal high around $2,078 per ounce in late December. |
Gold Safe Haven Geopolitical Inflation Dollar |
ValueThe Russell 1000 Value Index is about as cheap relative to its growth counterpart as it has been in many decades. Old-economy businesses associated with value indexes are pricing in a more sluggish economic reality than what is implied by valuations in the new-economy-biased growth universe. |
Value Growth Valuation Old Economy Relative | |
Risk AppetiteCurrent market dynamics imply unwarranted levels of optimism about benign outcomes to key risks facing investors. Markets appear complacent about mounting challenges and the manager believes risk aversion will at some point be higher than it is today. |
Risk Complacency Optimism Aversion Markets | |
| 2023 Q3 |
RatesFederal Reserve maintained higher for longer stance with fed funds rate at 5.25-5.5% and projections showing rates staying elevated through 2024. Rising long-term Treasury yields reflect concerns about fiscal sustainability and supply/demand dynamics as Fed reduces balance sheet. |
Federal Reserve Interest Rates Treasury Monetary Policy Yield Curve |
InflationCore PCE fell below 4% for first time since 2021, but supercore services inflation remains persistent due to wage pressures. Fed targeting final mile of disinflation with energy costs, housing prices and tight labor markets providing headwinds. |
Core PCE Supercore Wage Inflation Labor Markets Disinflation | |
GoldGold demonstrated resilience despite 300+ basis point rise in real interest rates, supported by central bank demand, fiscal concerns, and geopolitical tensions. Strong central bank purchases in 2022 were highest on record with 2023 trends suggesting continued robust demand. |
Central Banks Real Rates Safe Haven Currency Debasement Geopolitical | |
| 2023 Q2 |
Credit StressThe fund highlights increasing distressed exchanges as a forward indicator of trouble, with over $50 billion in bonds and loans defaulting or engaging in distressed exchanges year-to-date. They expect this trend to continue in what they anticipate to be a fairly extended default cycle given high levels of corporate debt and leverage. |
Distressed Defaults Leverage Corporate Debt Restructuring |
RatesThe fund discusses the Fed's hawkish rhetoric sending interest rates sharply higher, with markets focusing on the terminal fed funds rate expectations. They note the volatility in rates has weighed on issuance across leveraged credit, with issuers uncertain about rate trajectory reluctant to commit to financing at current levels. |
Federal Reserve Interest Rates Monetary Policy Terminal Rate Hawkish | |
TravelCarnival Corporation bonds performed well as the company reported improvements in demand and expenses. The company's post-Covid recovery had lagged competitors due to bigger exposure to Europe, which was slower to reopen compared to other geographies. |
Leisure Recovery Demand Post-Covid Europe | |
| 2023 Q1 |
Credit StressBanking sector failures including SVB and Signature Bank exposed vulnerabilities in the financial system stemming from Covid-era stimulus and aggressive Fed tightening. While not yet showing interconnectivity like 2008, the team believes it's premature to signal all-clear. |
Banking SVB Deposits Duration Liquidity |
RatesInterest rate trajectory remains uncertain as markets oscillate between hopes of rate hike cycle ending and hawkish data showing economic resilience. Banking turmoil has complicated Fed's balancing act between price stability and financial stability. |
Fed Monetary Policy Duration Yields Tightening | |
GoldMany portfolios hold gold-related securities as a potential hedge against a range of adverse market developments, including elevated sovereign risk. Gold positioning reflects defensive stance amid systemic vulnerabilities. |
Hedge Sovereign Risk Defense Precious Metals | |
LiquidityCentral banks continue to wring liquidity from the system after years of highly accommodative policy. The unwinding process creates potential for unintended consequences and market volatility as seen in banking sector stress. |
Central Banks Monetary Policy Volatility Tightening |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 5, 2026 | Fund Letters | James Fellows | TSM | Taiwan Semiconductor Manufacturing Company Limited | Information Technology | Semiconductor Foundries | Bull | New York Stock Exchange | AI, CapEx, Foundry, scale, semiconductors | Login |
| Jan 5, 2026 | Fund Letters | James Fellows | BIO | Bio-Rad Laboratories, Inc. | Health Care | Life Sciences Tools & Services | Bull | New York Stock Exchange | diagnostics, Governance, healthcare, lifesciences, Recurringrevenue | Login |
| TICKER | COMMENTARY |
|---|---|
| BIO | With a market cap around $6.5 billion, Bio-Rad Laboratories is smaller than our typical investment, but the company dominates the niches it serves within the areas of life-science research and diagnostics. Vertical integration historically has resulted in strong recurring revenue for the company, and its diversified customer base has further supported stability. Notably, Bio-Rad maintains a one-third stake in German biopharma company Sartorius that has grown significantly since its purchase and provides Bio-Rad with an economic exposure beyond its core businesses. Founded in a Quonset hut in 1952 by a husband-wife pair of Cal Berkeley graduates and run by their son since 2003, Bio-Rad maintains a family orientation that aligns interests with shareholders and contributes to the long-term orientation we look for in management teams. |
| GMEXICOB.MX | Grupo Mexico is a holding company with mining, transportation and infrastructure operations. Primarily through its listed subsidiary Southern Copper, Grupo Mexico's mining business comprises more than 80% of earnings. With the largest reserves of any copper producer and mines well positioned on the cost curve, Grupo Mexico controls long-duration assets that are nearly impossible to replicate. Despite its high-quality characteristics, Grupo Mexico—like many holding companies—trades at a discount to the sum of its parts; Grupo Mexico's stake in publicly traded Southern Copper alone exceeds its own market cap by more than $30 billion. Bolstered by an attractive dividend, Grupo Mexico has delivered compelling, long-term total returns despite the holding-company discount. Its family-led management team has long demonstrated sound capital allocation and a long-term orientation, and we believe the stock will continue to be a beneficiary of the constructive long-term outlook for copper. |
| TSM | Taiwan Semiconductor Manufacturing Corporation (TSMC) is another company we believe is positioned for long-term success in a structurally appealing industry. TSMC is by far the world's largest semiconductor foundry and is the primary manufacturer of the next-gen chips used in generative AI by customers like Apple, Nvidia and Intel. The company maintains a 60%-plus share of a market that is projected to experience continued strong growth. TSMC's scale helps it to continually reinforce its advantaged market position, generating significant revenues that the company reinvests into research and design and capex. Strong cash flows have enabled TSMC to maintain attractive dividend levels over time, resulting in attractive total returns for a stock we first purchased in 2018. |
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