| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 2% | 1.92% | - |
The Saturna Global Sustainable Bond Fund returned 1.92% in Q2 2026, outperforming the Bloomberg Global Aggregate Bond Index's 0.87% return, driven primarily by currency positioning and opportunistic duration management. The fund's notable overweights to the Colombian Peso (up 7.47%) and Mexican Peso (up 2.57%), combined with a 13% underweight to the Euro (down 1.13%), were the largest contributors to outperformance. The long end of the Treasury curve experienced significant volatility, with the 30-year spiking to 5.18% in May—the highest since 2007—driven by inflationary pressures and high oil prices. The fund opportunistically extended duration by 0.75 years during this volatility but maintains a conservative 4.22-year effective duration versus 6.17 years for the benchmark. The fund holds a 13% overweight to bonds inside of 3 years. Looking forward, managers will maintain shorter duration positioning given ongoing volatility concerns while continuing to monitor economic trends, inflation, and monetary policy, taking advantage of compelling relative value opportunities as they emerge.
The Saturna Global Sustainable Bond Fund pursues a defensive, shorter-duration positioning relative to its benchmark while opportunistically capturing value in currency overweights to Latin American currencies (Colombian and Mexican Peso) and underweights to the Euro, supplemented by tactical long-end trades during periods of volatility.
The fund will maintain its shorter duration relative to the Bloomberg Global Aggregate Bond Index, with a significant overweight to bonds inside of three years, given ongoing bond market volatility concerns. The managers will continue to monitor broad economic and inflation trends and changing monetary policy while taking advantage of opportunities with compelling relative value.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 6 2026 | 2026 Q2 | - | Currency, duration, emerging markets, fixed income, Global Bonds, Sustainable | - | The Saturna Global Sustainable Bond Fund outperformed its benchmark by 105 basis points in Q2 2026, driven by overweights to Colombian and Mexican Peso currencies and an underweight to the Euro. The fund opportunistically extended duration during May's Treasury volatility spike but maintains a defensive 4.22-year duration versus the benchmark's 6.17 years, with significant overweight to short-maturity bonds. |
| Apr 9 2026 | 2026 Q1 | - | fixed income, GCC, Geopolitical, inflation, Iran, oil, rates, Sukuk | - | Iran war and Strait of Hormuz closure drove oil from $60s to $110, creating historic supply disruption that shifted global inflation expectations and forced central banks to abandon rate cuts for potential hikes. Saturna maintained conservative duration positioning and focuses on high-quality credits for capital preservation amid volatile geopolitical-driven bond markets that failed traditional safe-haven dynamics. |
| Jan 11 2026 | 2025 Q4 | GOOGL | AI, Dollar, Fed, gold, international, Silver, tariffs, technology | - | 2025 delivered 17.88% returns despite tariff and AI volatility, with performance broadening beyond technology. Dollar weakness drove international outperformance while gold and silver hit record highs on debasement fears. Fed cut rates three times. Multi-year winning streaks are historically normal, and supportive conditions including fiscal liquidity and AI productivity potential suggest continued market strength into 2026. |
| Oct 13 2025 | 2025 Q3 | GOOGL, MSFT, NVDA, ORCL, TSLA | AI, energy, Government, infrastructure, Markets, Politics, technology | - | Strong Q3 market performance was led by AI-driven technology stocks, but sustainability concerns mount over circular tech investments and power constraints. Political gridlock threatens a record government shutdown with aggressive layoffs planned, while 95% of companies see zero AI returns despite massive investments. The AI boom may follow historical technology cycles with near-term disappointment. |
| Jul 8 2025 | 2025 Q2 | - | AI, bifurcation, consumer, Enterprise, productivity, tariffs, Trade Policy | - | Economic bifurcation between struggling consumers and AI-powered enterprise productivity gains defines this cycle. Trump tariffs created maximum pessimism in April but markets recovered. Corporate profits rise 20-50% from AI while consumer confidence falls. Fed stays rigid on policy. Focus on productivity enablers, avoid consumer discretionary as delayed recession hits consumers. |
| Mar 31 2025 | 2025 Q1 | AAPL, ADBE, ASSA-B.ST, AV.L, AVGO, CB, DANOY, GSK, LLY, MSFT, NOW, NTDOY, NVDA, NVO, NVS, RHHBY, SIE.DE, SONY, TSM, WKL.AS | AI, global, infrastructure, international, policy, semiconductors, tariffs, technology | - | US equity dominance ended in Q1 2025 as policy uncertainty and AI volatility drove underperformance. International markets outperformed while Trump's tariff policies and DeepSeek's AI breakthrough created market stress. Despite short-term volatility, AI infrastructure buildout continues. Portfolio benefits from US underweight but suffers from technology overweight. Focus remains on adaptable, high-quality companies amid increasing uncertainty. |
| Dec 31 2024 | 2024 Q4 | AAPL, ADBE, AVGO, GOOGL, LIN, LLY, LULU, NEE, NOW, NVDA, NVO, SBUX, TJX, TSCO, TSM | AI, infrastructure, Onshoring, semiconductors, Sustainable, tariffs, technology, Utilities | - | Saturna Sustainable Equity Fund underperformed in Q4 despite strong AI holdings performance, repositioning toward adaptable companies benefiting from onshoring and infrastructure trends. Added Broadcom, Linde, NextEra, and Prysmian while maintaining AI exposure. Trump policies create mixed outlook with tax cuts and deregulation as positives, tariffs and debt ceiling as risks. |
| Sep 30 2024 | 2024 Q3 | AAPL, ACN, ADBE, HD, LLY, LOW, LULU, MSFT, NOK, NOW, NVDA, NXPI, SBUX, TEL, TSM | duration, Fed, rates, Sustainable, technology, volatility | - | Saturna's sustainable funds weathered August volatility from unwinding hedge fund trades while positioning for Fed rate cuts. Equity fund underperformed on semiconductor weakness despite home improvement strength. Bond fund's shorter duration hurt performance as rates fell. Economic growth, declining inflation, and dovish Fed policy support outlook despite election uncertainty and elevated valuations. |
| Jun 30 2024 | 2024 Q2 | AAPL, ACN, ADBE, DASTY.PA, FERG.L, GIB.A.TO, GSK, HD, LLY, LOW, LULU, NVDA, NVO, NXPI, SBUX, SCHNEIDER.PA, STM, TJX, TSM, WKL | AI, global, growth, healthcare, large cap, semiconductors, Sustainable, technology | - | Saturna's sustainable funds posted solid Q2 results driven by AI leaders Nvidia and Taiwan Semiconductor, plus healthcare winner Novo Nordisk's GLP-1 drugs. Consumer discretionary stocks lagged amid economic uncertainty. The fund increased US exposure defensively while maintaining conviction in AI's transformative potential despite inflation persistence and delayed rate cut expectations. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
RatesThe long end of the Treasury curve showed significant volatility in Q2 2026, with the 30-year spiking to 5.18% in May (highest since 2007) driven by inflationary pressures and high oil prices. The fund extended duration by 0.75 years, buying into long-end volatility opportunistically, but maintains a conservative 4.22-year effective duration versus 6.17 years for the benchmark. The fund maintains a significant overweight to bonds inside of 3 years while taking advantage of volatility-driven opportunities in longer maturities. |
Duration Treasury Volatility Inflation |
ColombiaThe Colombian Peso was a major contributor to positive fund performance, appreciating 7.47% relative to the dollar in Q2 2026. The fund maintains a notable overweight to the Colombian Peso, which was cited as the main reason for the fund's outperformance versus the benchmark. |
Currency Peso Emerging Markets | |
MexicoThe Mexican Peso appreciated 2.57% relative to the dollar in Q2 2026, contributing positively to fund performance. The fund maintains a notable overweight to the Mexican Peso as part of its currency positioning strategy. |
Currency Peso Emerging Markets | |
EuroThe fund is more than 13% underweight to the Euro relative to the Bloomberg Global Aggregate Bond Index. The Euro depreciated 1.13% relative to the US dollar in Q2 2026, and this underweight positioning continues to benefit relative performance. |
Currency Europe | |
| 2026 Q1 |
OilThe Iran war and closure of the Strait of Hormuz drove crude oil prices from mid-$60s to over $110 in Q1 2026, creating the longest supply chain disruption in global oil market history. This oil shock fundamentally changed monetary policy expectations and bond market dynamics. |
Oil Energy Hormuz Supply Shock Iran |
InflationThe broad-based supply shock spanning energy, agriculture, and industrial inputs materially shifted inflation expectations higher, forcing central banks to reassess their easing cycles. PCE inflation expectations were revised up to 2.7% for 2026, with Eurozone inflation rising from 1.9% to 2.5% in March. |
Inflation PCE Supply Shock Central Banks | |
RatesCentral banks shifted to hawkish stances, with the Fed removing anticipated cuts and markets pricing 20% probability of hikes. The ECB faces pressure for rate increases as inflation moves above target, while the Bank of England reversed its cutting path with 60% probability of June hike. |
Interest Rates Fed ECB Monetary Policy | |
FertilizersThe Strait of Hormuz closure disrupted 20-30% of globally traded fertilizers, with natural gas being a key input for nitrogen-based fertilizers. Brazil faces compound shock as the world's largest fertilizer importer with 50% of supply transiting Hormuz, threatening its status as producer of 60% of global soy exports. |
Fertilizers Agriculture Supply Chain Brazil | |
GCCGCC sukuk and bond issuers have shown resilience despite growth risks, with GDP contractions of 3-5% expected for Saudi Arabia and UAE, and up to 14% for Kuwait and Qatar. However, many GCC issuers demonstrate exceptional financial flexibility, low debt levels, and strong governance, with no Fitch-rated GCC sukuk defaults and 84% remaining investment-grade. |
GCC Sukuk Middle East Credit Quality | |
| 2025 Q4 |
AIAI was the dominant investment theme of 2025, driving technology stock performance despite initial volatility from China's DeepSeek model. The theme remained central throughout the year with data center buildout supporting related sectors. |
Artificial Intelligence Technology DeepSeek Data Centers |
GoldGold reached all-time highs at $4,314 by year-end, surpassing previous peaks even in inflation-adjusted terms. The appreciation was driven by debasement concerns and central bank interest. |
Precious Metals Inflation Hedge Central Banks | |
SilverSilver soared even more than gold to $71 by year-end, though remaining below inflation-adjusted peaks. The rally was influenced by supply-demand imbalances and industrial uses including solar power. |
Precious Metals Industrial Metals Solar | |
DollarThe US Dollar Index fell 10.08% during 2025, its steepest drop since 2017. This weakness turbocharged returns for dollar-based investors in overseas markets. |
Currency DXY International | |
| 2025 Q3 |
AIThe rapid buildout of AI infrastructure is driven by large strategic and circular investments among tech giants, raising concerns over sustainability and power supply constraints. Questions arise about whether companies investing in AI will ever see meaningful returns, with 95% of organizations currently getting zero return from GenAI investments despite $30-40 billion in enterprise investment. |
Data Centers Cloud Semiconductors Energy Storage Grid Upgrade |
Energy TransitionPower generation represents a critical issue facing AI development as electricity consumption has been growing at roughly 2% annually since 2020. Utilities are overwhelmed with grid connection requests but are wary of overbuilding due to concerns about excess capacity and customer rate increases. |
Grid Upgrade Data Centers Energy Storage Power Electronics | |
| 2025 Q2 |
AIThe corporate sector is experiencing an acceleration of AI-driven productivity gains and margin expansion. Enterprise software vendors report productivity improvements in the 20-50% range across various business functions. This creates a paradoxical economic environment where corporate profitability marches higher while consumer purchasing power faces increasing pressures from structural technological displacement. |
Productivity Enterprise Automation Margins Technology |
Trade PolicyThe Trump Administration's economic agenda collapsed when investors realized the Trump put had expired and was replaced by expensive call options resembling wartime economic measures. Reciprocal tariffs were imposed by the US to virtually every other nation on April 2, marking maximum pessimism. The administration continues to secure new trade agreements, though the pace may be slow and incremental. |
Tariffs Trade Wars Geopolitical Policy Uncertainty | |
| 2025 Q1 |
AIAI infrastructure buildout continues despite market volatility. DeepSeek's competitive model caused sharp selloffs in AI-exposed companies, but hard data points to continued infrastructure investment. Reality versus expectations dynamic creates volatility as crowded trades exacerbate market movements. |
Nvidia Infrastructure DeepSeek Compute Buildout |
Trade PolicyTrump administration announced at least 13 different tariff policies, culminating with shock rates on April 2. Tariffs intended to increase domestic manufacturing and elicit fear from global partners. Policy uncertainty breeds concern as beneficiaries of global status quo may cede advantages. |
Tariffs Manufacturing Isolationist Uncertainty Negotiations | |
SemiconductorsSemiconductor companies faced significant declines as AI infrastructure providers like Taiwan Semiconductor and Broadcom were among top detractors. Manufacturing capacity at Taiwan Semiconductor remains the limiting factor rather than demand for AI chips. |
Taiwan Semiconductor Broadcom Manufacturing Capacity Foundries | |
| 2024 Q4 |
AIAI infrastructure companies like Nvidia, Taiwan Semiconductor, and Broadcom drove significant portfolio returns. The fund maintains exposure to AI enablers while adding companies whose growth opportunities are not contingent on AI advancements. Many companies contributing to AI building blocks enjoyed extraordinary returns during 2024. |
GPUs Infrastructure Semiconductors Training Models |
OnshoringThe fund positioned for US re-industrialization and near-shoring trends, adding companies like Fuji Electric benefiting from near-shoring and grid modernization, and Linde whose services are critical for onshoring. Demographic and near-shoring realities require closer economic ties between US, Canada, and Mexico despite tariff threats. |
Re-industrialization Manufacturing Supply Chain Infrastructure Trade | |
Trade PolicyTrump's tariff policies will disincentivize Chinese goods purchases while promoting closer relationships with Mexico and Canada. The fund expects tariffs on goods with national security implications that could be reasonably near-shored. Reduced dependence on China means closer relationships with top trading partners. |
Tariffs China Mexico Canada Security | |
Infrastructure SpendingThe fund added infrastructure-focused companies including Prysmian for electrical and telecom cables necessary to upgrade critical infrastructure, and NextEra as a leading utility and renewable energy generator. Infrastructure Investment and Jobs Act provides legislated subsidies for onshoring. |
Grid Cables Utilities Modernization Investment | |
| 2024 Q3 |
VolatilityThe quarter saw significant volatility spikes, particularly on August 4 when the VIX jumped 42 points due to unwinding of popular hedge fund trades including the yen carry trade and AI-exposed technology stocks. These technical rather than fundamental disruptions created forced selling feedback loops as leveraged positions were unwound. |
VIX Hedge funds Carry trade Technical |
RatesThe Federal Reserve implemented its first rate cut in four years, lowering the federal funds rate by 50 basis points to 4.75%-5% in September. This dovish shift was driven by progress on inflation declining to 2.5% and concerns about labor market slowing despite low 4.1% unemployment. |
Fed Rate cuts Monetary policy Inflation | |
AITechnology stocks exposed to artificial intelligence themes became overcrowded trades that unwound during the quarter's volatility. Despite the technical disruption, Technology sector's outsized earnings growth and market-leading performance appeared justified by productivity growth trends. |
Technology Earnings Productivity Overcrowded | |
| 2024 Q2 |
AIGenerative AI is driving stock prices, index returns, and capital expenditures across technology companies. The fund sees significant productivity enhancements from AI tools and believes AI will follow the path of transformative technologies like desktop computers and cellular phones. Big tech companies are committing tens to hundreds of billions in capital investment for AI development. |
Artificial Intelligence Productivity Technology Investment Development |
SemiconductorsNvidia leads AI-driven semiconductor demand with graphics processing units in high demand. Taiwan Semiconductor manufactures chips behind Nvidia's products. The semiconductor cycle is central to AI infrastructure buildout and represents a key investment opportunity in the technology transformation. |
Chips Graphics Processing Manufacturing Infrastructure Demand | |
GLP1Consistent demand for weight loss drug therapy keeps Novo Nordisk performing strongly. Their GLP-1 medications continue producing significant wins for the drug manufacturer with no sign of slowing down, representing a sustained healthcare investment theme. |
Weight Loss Drug Therapy Healthcare Pharmaceuticals Treatment |
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