| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global markets experienced significant turbulence in Q1 2026 as geopolitical shocks, particularly Middle East tensions and the closure of the Strait of Hormuz, drove oil prices from $72 to over $100 per barrel. This energy supply shock fed into headline inflation, forcing central banks to pause rate cuts and adopt a cautious wait-and-see approach. Equity markets declined broadly, with US markets falling 4.6% while emerging markets proved more resilient at -0.2%. A pronounced style rotation emerged beneath the surface, with value stocks rising 1.2% while growth stocks fell 7.7%, highlighting the importance of diversification. Small-cap equities also outperformed large-caps. Fixed income provided relative stability, with short-dated government bonds and investment-grade corporates posting modest gains. Looking ahead, elevated geopolitical risks and persistent inflation suggest continued volatility, but greater dispersion across regions and styles is creating opportunities for well-diversified portfolios. The firm maintains its emphasis on diversification, quality fixed income, and value allocations as key risk management tools.
In an environment of heightened geopolitical uncertainty and energy-driven inflation, diversification across asset classes, regions, and investment styles remains essential for managing risk while positioning for opportunities as they emerge.
Elevated geopolitical risks and sticky inflation suggest volatility is likely to persist as markets continue to reassess monetary policy paths. Greater dispersion across regions, styles, and asset classes is creating a broader opportunity set for well-diversified portfolios.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 16 2026 | 2026 Q1 | - | diversification, energy, Geopolitical, inflation, value, volatility | - | Geopolitical shocks drove oil from $72 to $100, triggering inflation concerns and equity market declines. A sharp style rotation favored value over growth and small-caps over large-caps. Fixed income provided stability while diversification proved essential. Ongoing geopolitical risks and sticky inflation suggest continued volatility, but dispersion is creating opportunities for balanced portfolios. |
| Jan 15 2026 | 2025 Q4 | NVDA | AI, Central Banks, diversification, Dollar, emerging markets, fixed income, global, Trade Policy | - | 2025 proved the power of global diversification as international markets crushed US performance, with emerging markets up 33.6% and developed ex-US up 31.9% versus US equities at 17.3%. AI themes broadened beyond mega-caps while trade tensions eased. Dollar weakness amplified international returns. Outlook for 2026 remains constructive across regions and sectors. |
| Oct 20 2025 | 2025 Q3 | - | AI, equities, fixed income, global, Markets, rates, Trade Policy | - | Global markets posted strong Q3 gains driven by AI optimism, Fed rate cuts, and easing trade tensions. US equities delivered best quarter since 2020 while emerging markets surged on China stimulus hopes. Despite government shutdown and fresh tariff threats creating near-term volatility, fundamentals remain solid with supportive monetary policy and resilient earnings growth. |
| Jul 17 2025 | 2025 Q2 | DPLM.L, HARV.HE, LOTB.BR, POOL | Compounding, Europe, growth, Quality, Roiic | - | European quality-focused fund delivered +10.08% YTD despite FX headwinds, with portfolio companies growing EBITA per share +14.8% through high incremental returns on invested capital. Manager maintains fully invested stance targeting sustainable compounders with 20%+ ROIIC, emphasizing proper capital allocation and free cash flow measurement over financial engineering for long-term double-digit returns. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
GeopoliticalHeightened tensions in the Middle East, US intervention in Venezuela, and disputes over Greenland dominated headlines. US and Israeli strikes on Iran triggered closure of the Strait of Hormuz, causing oil prices to surge from $72 to over $100 per barrel before pulling back to $96 following ceasefire announcement. |
Iran Middle East Oil Sanctions |
EnergyEnergy supply shock from geopolitical conflicts drove brent crude from $72 to over $100 per barrel during the quarter. Higher energy prices fed directly into headline inflation, complicating central bank policy decisions and contributing to market volatility. |
Oil Natural Gas Inflation Volatility | |
ValuePronounced style rotation saw value stocks materially outperform growth stocks. The MSCI ACWI Value Index rose 1.2% while Growth fell 7.7%. Over five years, value achieved similar returns to growth but with meaningfully lower volatility and less downside risk. |
Value Growth Volatility Risk | |
| 2025 Q4 |
AIAI has been integrated into RGA's research process over three years, serving as force multipliers for human judgment rather than replacements. The firm uses AI tools like NotebookLM, Gems in Gemini, and Claude Code for efficiency and risk analysis. While acknowledging AI's transformative potential, they believe current market narratives swing to unhelpful extremes, creating investment opportunities. |
Artificial Intelligence Machine Learning Automation Technology Research Tools |
SoftwareSoftware companies face structural headwinds from AI lowering barriers to entry and increasing customer bargaining power. Many companies have been running with excess headcount and may experience pricing pressure that can be countered with lower costs to serve. The market is pricing in these headwinds as evidenced by significant downward re-rating of major financial data and software providers. |
Software Technology Pricing Pressure Competition Barriers to Entry | |
SemiconductorsLattice Semiconductor represents an under-appreciated AI winner with immediate gains and longer-term optionality. The company's focus on efficiency rather than maximal performance positions it favorably for AI servers, particularly in security functions as Root of Trust chips. FPGAs are valuable for security due to their programmability and ability to chase moving targets. |
Semiconductors FPGAs AI Infrastructure Security Efficiency | |
LogisticsAmazon's logistical prowess represents one of the foremost moats in business today and can be enhanced with AI. The company is uniquely positioned to dominate the coordination layer across its entire logistics network through better orchestration of assets and buildout of more sophisticated robotics. |
Logistics Supply Chain Automation Robotics Coordination | |
| 2025 Q3 |
AIContinued enthusiasm for AI drove strong performance in growth stocks and technology sectors. AI-related themes fueled investor appetite and contributed to the best third quarter performance for major US indices since 2020. |
Technology Growth Innovation Semiconductors Software |
Trade PolicyTrade tensions eased during Q3 as negotiations progressed and retaliatory threats diminished, supporting rotation into international equities. However, President Trump threatened fresh tariffs on China over rare earth export controls, maintaining uncertainty despite market adaptation to higher tariffs. |
Tariffs China International Policy Negotiations | |
RatesCentral bank rate decisions shaped market dynamics with the Fed restarting its rate-cutting cycle in September with a 25bp cut. The ECB held steady at 2.0% while the Bank of England cut to 4.0% in August, signaling gradual easing approaches across major economies. |
Federal Reserve ECB Bank of England Monetary Policy Easing | |
| 2025 Q2 |
QualityThe manager emphasizes sustainable quality compounding with focus on companies achieving high returns on incremental invested capital (>20/25%). They stress the importance of measuring free cash flow performance, proper capital allocation, and management understanding of ROIIC frameworks for long-term value creation. |
ROIIC Compounding Cash Flow Capital Allocation Value Creation |
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