| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.8% | -11% | -11% |
Magellan Global Opportunities Fund underperformed in Q1 2026, declining 11.0% versus the benchmark's 6.1% fall, amid significant market volatility driven by AI disruption fears and geopolitical tensions. The quarter began with AI concerns following Anthropic's Claude tools release, triggering fears about software earnings durability. Late in the quarter, the US-Israel-Iran conflict created energy market disruption, with oil prices surging 70% and transforming the Strait of Hormuz into a global economic chokepoint. Top contributors included Taiwan Semiconductor, which raised revenue guidance on strong AI chip demand, US Bancorp benefiting from yield curve expectations, and ASML reporting exceptional bookings. Key detractors were Microsoft, SAP, and Universal Music, all affected by AI disruption concerns. The manager views current conditions as creating compelling opportunities, with expected returns across many holdings at their highest levels since the post-Covid period. They are selectively increasing investments in high-quality companies with strong long-term growth prospects, viewing AI as an opportunity rather than threat for well-positioned incumbents like SAP.
Invest in outstanding companies at attractive prices while exercising deep understanding of macroeconomic environment to manage investment risk, focusing on companies with sustainable competitive advantages that can generate returns on capital in excess of their cost of capital for sustained periods.
The manager views the current elevated risk environment and correction in sentiment as creating compelling investment opportunities, with expected returns across many portfolio holdings higher than they have been since the post-Covid period. While remaining mindful of elevated risks, they are increasing investment in companies with strong long-term earnings growth prospects.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 17 2026 | 2026 Q1 | ASML, MSFT, SAP, TSM, UMG.AS, USB | AI, energy, Geopolitical, global, software, technology | - | Magellan Global Opportunities underperformed in Q1 2026 due to AI disruption fears and Middle East energy crisis. Taiwan Semiconductor and ASML benefited from AI chip demand while Microsoft and SAP suffered from software concerns. The manager sees current volatility creating attractive entry points for quality companies with strong competitive positions. |
| Jan 18 2026 | 2025 Q4 | AMT, AMZN, CMG, CRM, DG, ES, GOOGL, MA, MELI, META, MSFT, NESN.SW, NVO, OR.PA, SAP, TSM | AI, Cloud, consumer, Defensive, global, Quality, technology | - | Magellan delivered 1.4% in Q4 amid market rotation from AI mega-caps. Portfolio remains defensively positioned despite supportive US macro tailwinds from fiscal and monetary policy. Quality focus on companies like Alphabet, Amazon, and Nestlé provides resilience against elevated valuations and multiple macro risks heading into 2026. |
| Sep 30 2025 | 2025 Q3 | AMT, AMZN, ASML, CMG, ES, GOOGL, INTC, MA, MELI, META, MSFT, NESN.SW, NVDA, NVO, ORCL, SAP, TSM, V, YUM, YUMC | AI, global, large cap, Quality, semiconductors, technology | - | Magellan Global Opportunities underperformed in Q3 as speculative growth outperformed quality. AI enthusiasm drove markets higher but deals appear increasingly circular and dependent on unproven monetisation. TSMC and ASML benefited from semiconductor optimism while consumer names like Chipotle struggled. Manager maintains cautious stance given full valuations but sees individual opportunities in high-quality companies. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI disruption concerns affected software stocks during the quarter, with fears over earnings durability after Anthropic's new Claude tools. However, the manager views AI as an opportunity for companies like SAP rather than a threat, given their privileged position with proprietary data and trusted customer relationships. |
Software Disruption Enterprise Cloud Data |
EnergyThe US-Israel-Iran conflict created significant energy market disruption, with oil prices surging 70% at their peak. The transformation of the Strait of Hormuz into a global economic chokepoint triggered sharp escalation in energy costs, functioning as a pervasive tax on global consumption and production. |
Oil Geopolitical Inflation Supply Chain Middle East | |
SemiconductorsStrong AI chip demand drove TSMC's outperformance, with the company raising 5-year revenue growth guidance by 5 percentage points to 25% CAGR. ASML also benefited from exceptional bookings as customers expanded manufacturing capacity plans in response to strong demand for AI chips and global memory chip shortages. |
AI Chips Memory Manufacturing Capacity Growth | |
| 2025 Q4 |
AIAI dominated market leadership in first three quarters but showed signs of broadening away from AI Mega Cap stocks. Mixed performance among AI leaders with concerns about sustainability of AI spend and business models causing intra-quarter risk premium spikes. Google demonstrated strong AI integration while Microsoft faced moderating optimism on AI positioning. |
Artificial Intelligence Cloud Computing Technology Mega Cap Infrastructure |
CloudAmazon's AWS showed acceleration in Q3 growth as increased capex began delivering returns. Microsoft Azure faced moderating optimism due to strong execution at competitors. All incumbent cloud providers viewed as long-term winners despite short-term relative performance shifts. |
Cloud Computing AWS Azure Infrastructure Technology | |
E-commerceAmazon outperformed on better-than-feared US consumption trends in December quarter. The company is well-positioned to benefit from structural growth in e-commerce alongside cloud computing expansion. |
E-commerce Consumer Digital Commerce Retail Growth | |
Consumer DefensiveNestlé represents an opportune investment in world-leading brands within consumer categories with favorable long-term growth outlook. The company possesses comprehensive pricing architecture through umbrella brands and scale advantages in coffee and pet care categories. |
Consumer Staples Brands Food Beverages Defensive | |
CoffeeCoffee viewed as attractive category that is more experiential and less commoditized relative to other staples. Nestlé delivered positive volume growth despite high-single-digit price increases, reflecting entrenched habits and pricing power. Scale benefits allow supply substitution to mitigate tariff impacts. |
Coffee Commodities Consumer Staples Pricing Power Brands | |
| 2025 Q3 |
AIRenewed enthusiasm in the AI trade has driven markets to fresh highs, with large deals announced by OpenAI with Nvidia, Broadcom, Oracle and AMD. However, these deals are somewhat circular in nature and heavily dependent on OpenAI growing and monetising its user base given its limited current revenue. While positive on GenAI potential over the long term, considerable uncertainty remains on the pace and degree of monetisation. |
OpenAI Monetisation Chips Data Centers GenAI |
SemiconductorsTSMC benefited from improved semiconductor demand sentiment due to announcements of several OpenAI partnerships with Oracle, Nvidia and Broadcom. These were positive developments in their potential to drive incremental demand for AI-related chips and manufacturing capacity. However, focus remains on end-market demand dynamics necessary to support these capacity plans, particularly given single-customer concentration. |
TSMC Manufacturing Capacity Demand AI Chips | |
AthleisureAdidas represents a compelling long-term opportunity as the world's #2 player in athletic footwear and apparel. The brand benefits from deep heritage, durable competitive advantages including brand equity and global distribution networks. Adidas was pivotal to the history of athleisure wear, introducing the tracksuit to non-athletes in the 1970s, and continues to benefit from the blending of sports and lifestyle that has broadened its addressable market. |
Adidas Brand Distribution Heritage Lifestyle |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| TSM | TSMC performed strongly in response to strong AI chip demand. This saw TSMC raise their 5-year (2024-29) revenue growth guidance by 5 percentage points to a CAGR of 25% p.a. While the growth will be supported by a large increase in FY26 capex, TSMC also raised its long-term gross margin guidance, signalling confidence in its ability to drive productivity, cost efficiencies and pricing power. Topping this off, TSMC also reported a strong 4Q25 result that beat their guidance, driven by exceptionally strong gross margins. |
| USB | US Bancorp delivered a solid earnings update in the quarter and was expected to benefit from higher Net Interest Income due to a potential steepening in the US yield curve. |
| ASML | ASML reported an exceptional bookings quarter in 4Q25 as customers expanded manufacturing capacity plans in response to strong demand for AI chips and the global shortage in memory chips. Both of these drivers are expected to remain tailwinds over the next two years. Consequently, ASML raised their FY26 growth guidance, which has since been bolstered by supportive announcements by memory customers. |
| MSFT | After performing strongly earlier in the year on accelerating growth in Azure, Microsoft gave back some of the strong performance. This was driven primarily by moderating optimism on Microsoft's AI positioning via its close relationship with OpenAI due to strong execution at Google and Anthropic. While short-term relative performance will continue to be affected by shifting views on AI positioning, taking a longer-term perspective we view all of the incumbent cloud providers as winners. |
| SAP | SAP underperformed on a combination of sector-wide concerns regarding AI disruption and delays in customer upgrades due to the uncertainty created by US tariffs. We consider AI concerns as they relate to SAP as misplaced, and view near-term delays to customer upgrades as irrelevant to its medium-term earnings potential. Since 2020, SAP has delivered strong annual growth in its cloud ERP business (over 30% growth in 2025). SAP is among the best-positioned software vendors to capture the AI opportunity, rather than be disrupted by it, in our view. The rich proprietary data flowing through ERP systems make SAP particularly well-suited to deliver these solutions. |
| UMG.AS | Universal Music's share price came under pressure due to concerns about the disruption by AI of the value of music due to music generation capabilities, the role of labels in the music industry, and UMG's business quality given poor free cash flow conversion in 2025, which is expected to continue in 2026. We view AI disruption concerns as overblown. Music has been cheap to create for a long time. The challenge for artists is breaking through to music fans, maintaining momentum or becoming part of pop culture, and maximising the economic value of their music. This is the role labels play and we do not expect AI to meaningfully change this. |
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