| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Global equity markets declined in Q1 2026 as Middle East conflict between US/Israel and Iran disrupted oil flows through the Strait of Hormuz, driving crude prices above $100. The S&P 500 fell 4.3% in its weakest quarter since 2022, while commodities surged 40% led by energy. Technology stocks experienced sector rotation as investors favored AI infrastructure over traditional software amid concerns about generative AI disrupting subscription models. Energy stocks were standout performers as higher oil prices benefited integrated producers and refiners. Government bonds sold off as energy-driven inflation concerns prompted central banks to adopt hawkish stances, with ECB and Bank of England signaling potential rate hikes. Emerging markets outperformed developed markets slightly, with Latin American countries and Korea leading gains while energy-importing nations like India lagged. The quarter highlighted markets' vulnerability to geopolitical shocks and their cascading effects on inflation expectations and monetary policy.
Q1 2026 markets were dominated by Middle East geopolitical conflict that disrupted oil supply and drove energy prices above $100, creating inflationary pressures and risk-off sentiment across global equities while benefiting energy and commodity sectors.
Markets face continued uncertainty from Middle East conflict and its impact on energy prices and inflation. Central banks have shifted hawkish with potential for rate hikes if energy prices remain elevated. Technology sector experiencing rotation from traditional software to AI infrastructure.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 7 2026 | 2026 Q1 | - | AI, energy, geopolitics, inflation, Middle East, oil, technology | - | Q1 2026 saw global equities fall as Middle East conflict drove oil above $100, triggering inflation fears and central bank hawkishness. Energy stocks surged while tech experienced AI-driven rotation from software to infrastructure. Commodities gained 40% while bonds sold off on rate hike expectations. |
| Oct 6 2025 | 2025 Q3 | BTC-USD, ETH-USD | AI, crypto, equities, Fed, global, gold, rates, technology | - | Global markets delivered strong Q3 2025 gains driven by the AI boom, solid earnings, and Fed rate cuts. Technology sectors led performance with record Nasdaq highs. Emerging markets outperformed on dollar weakness and trade progress. Digital assets rebounded strongly with Bitcoin hitting new highs. Precious metals rallied to records while elevated valuations and geopolitical risks persist. |
| Jul 30 2025 | 2025 Q2 | - | AI, crypto, Defense Spending, global, rates, tariffs, technology, Trade Policy | - | Global markets recovered strongly in Q2 2025 after initial tariff volatility, with equities posting double-digit gains led by AI and defense stocks. Central banks neared end of easing cycles while focus shifted to fiscal sustainability. Trade negotiations provided relief from Liberation Day tariff threats, supporting emerging markets and risk assets broadly. |
| Mar 17 2025 | 2024 Q4 | - | Benchmark, CAPE, Concentration, diversification, global, Magnificent, value | - | Schroders Value Perspective faced 2024 relative underperformance due to MSCI World concentration in Magnificent 7 stocks. The fund's diversified value approach trades at 8x CAPE with significant discount to growth. Historical patterns suggest next decade may reverse recent trends, favoring active managers and value investing as speculative excesses correct. |
| Nov 14 2024 | 2024 Q3 | BARC.L, NWG.L | banks, Buybacks, Forecasting, Rotation, Uk, value |
NWG.L BARC.L |
Schroders Value team demonstrates their disciplined approach is working, with UK banks like NatWest and Barclays delivering strong returns through operational improvements and massive shareholder distributions. They're rotating from winners into the most beaten-down areas where valuations are lowest, maintaining conviction in significant long-term outperformance despite unpredictable timing. |
| Jul 30 2024 | 2024 Q2 | 5991.T, 6995.T, 9404.T, BMY, LZB, MHK, PFE, SBH, SWK | Concentration, Cyclical, global, Japan, Midcaps, underperformance, Valuations, value | - | Schroders Value Global fund underperformed in Q2 as growth stock concentration continued, but the manager maintains conviction in their value approach. Portfolio emphasizes US midcaps facing cyclical headwinds and Japanese companies benefiting from regulatory reform. They believe current market concentration will reverse over the next decade, making this an attractive entry point for long-term value investors. |
| Jan 2 2024 | 2023 Q4 | CSCO, UBER | disruption, growth, rates, technology, valuation, value | - | Higher interest rates are ending the era of subsidized disruption that burned through billions in investor capital. Traditional value businesses face reduced competitive pressure as unprofitable disruptors fail, creating opportunities for profit growth and re-rating. The team emphasizes that valuation matters more than growth, positioning for medium-term outperformance as economic reality returns. |
| Feb 27 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilOil prices surged above $100 due to Middle East conflict disrupting production and shipping through the Strait of Hormuz. Energy stocks were standout performers as integrated producers, refiners and infrastructure companies benefited from higher prices. |
Energy Geopolitics Supply Prices Conflict |
AIAI narrative created dichotomy within technology sector. Investors rotated towards AI infrastructure businesses like semiconductors and cloud computing, while traditional software stocks declined over concerns that generative AI could undermine software-as-a-service subscription models. |
Technology Infrastructure Software Disruption | |
GeopoliticsUS and Israeli strikes on Iran disrupted oil flow through Strait of Hormuz, creating considerable uncertainty for global economy and financial markets. The conflict dominated markets in March, introducing volatility and significant sell-offs across asset classes. |
Iran Conflict Risk Uncertainty Markets | |
InflationHigher oil prices fueled worries over inflation and potential interest rate rises. Annual inflation in eurozone rose to 2.5% in March from 1.9% in February. Central banks shifted hawkish as energy price shock raised concerns about persistent inflation. |
Rates Energy Central Banks Policy | |
| 2025 Q3 |
AIThe AI boom continued to drive strong market performance across global equities in Q3 2025. Technology and communication services sectors were strong performers, with renewed enthusiasm for AI helping boost the technology-heavy Nasdaq to record highs. Asian markets, particularly Taiwan and Korea, benefited from continued demand for artificial intelligence and AI-related stocks. |
Technology Semiconductors Growth Innovation Computing |
RatesThe Federal Reserve delivered a 25 basis point rate cut to 4.0%-4.25% in September, which was well-anticipated and fully priced by markets. The Bank of England also cut rates to 4.0% in August. Rate cut expectations and dovish Fed stance supported market performance, particularly benefiting emerging markets and digital assets. |
Federal Reserve Monetary Policy Interest Rates Central Banks Liquidity | |
CryptoDigital asset markets staged a strong rebound in Q3 2025, with Bitcoin rising 7% and Ethereum surging 67%. Bitcoin reached a new all-time high of $124,500 in August. The passage of the GENIUS Act in July provided comprehensive regulatory clarity for stablecoins, benefiting Ethereum as the home to much stablecoin innovation. |
Bitcoin Ethereum Regulation Institutional Adoption Stablecoins | |
GoldPrecious metals experienced a significant rally in Q3 2025, with gold and silver posting record-breaking gains. Higher gold prices drove a rally in basic materials sectors, particularly benefiting markets like South Africa where stronger precious metals prices supported index performance. |
Precious Metals Commodities Safe Haven Inflation Hedge Mining | |
Trade PolicyUS trade policy remained a key market theme, though concerns were less headline-dominating than earlier in the year. Companies globally continued reconfiguring supply chains to reduce dependence on the US and China. Progress on US-China trade talks benefited emerging markets, while tariff uncertainties affected various regions differently. |
Tariffs Supply Chain China Geopolitics Trade Wars | |
| 2025 Q2 |
Trade PolicyUncertainty over US trade tariffs dominated markets in Q2, with President Trump unveiling Liberation Day tariffs that were later suspended for 90 days to allow negotiations. The initially announced 10% tariff on all US imports and higher reciprocal tariffs sparked volatility before markets recovered on the more conciliatory approach. |
Tariffs Trade Negotiations Liberation Day Reciprocal |
AIArtificial intelligence continued to drive market performance with the Magnificent 7 stocks staging a strong recovery after earlier weakness. Taiwan benefited from continued investor optimism about AI, while technology stocks with AI exposure led gains in the US market. |
Artificial Intelligence Technology Magnificent 7 Taiwan Recovery | |
Defense SpendingDefense stocks continued their strong performance amid an agreement at the NATO summit for countries to lift defense spending. The industrials sector, particularly defense companies, led advances in European markets during the quarter. |
NATO Defense Military Industrials Spending | |
RatesCentral banks neared the end of their rate cutting cycles with the ECB cutting twice by 25bps each time and the Bank of England cutting to 4.25%. The focus shifted from monetary policy to fiscal policy concerns and debt sustainability as rate cutting cycles concluded. |
Central Banks Rate Cuts ECB Bank of England Monetary Policy | |
CryptoDigital asset markets were shaped by major regulatory developments with both Bitcoin and Ethereum returning more than 30% during the quarter. The US Senate passed the Genius Act providing clarity for stablecoin regulation, supporting institutional adoption of blockchain technology. |
Bitcoin Ethereum Stablecoins Regulation Blockchain | |
| 2024 Q4 |
ValueThe portfolio trades at approximately 8x CAPE, significantly cheaper than the market's cheapest quintile at 10x CAPE. Value stocks trade at a 65% discount to growth versus the long-term discount of 40%, presenting attractive opportunities for patient investors. |
Value CAPE Discount Growth Cheapest |
AIThe Magnificent 7 companies have considerable investments in AI, creating a crowded trade with fragility in valuations. The AI hype was highlighted by the dramatic selloff on January 27th when stocks priced for perfection faced corrections. |
AI Magnificent Hype Crowded Selloff | |
| 2024 Q3 |
ValueThe team emphasizes their disciplined value investing approach, focusing on stocks trading at large discounts to fair value. They highlight that more than a century of data shows value investing outperforms on average and over time, requiring patience and consistency to deliver long-term performance advantages. |
Value Discount Fair Value Outperformance Discipline |
BanksUK banks have delivered higher returns than the Nasdaq-100 since end of 2020, with total returns of 102% versus 60%. NatWest and Barclays are highlighted as examples of strong operational performance finally translating to share price appreciation through significant shareholder returns via dividends and buybacks. |
Banks NatWest Barclays Returns Buybacks | |
BuybacksThe letter extensively discusses share buyback programs as a key driver of shareholder returns. NatWest distributed £12.5bn to shareholders over three years equal to half its market cap, while Barclays is returning £10bn over three years representing 40% of its market cap. |
Buybacks Shareholder Returns Capital Return Market Cap Distribution | |
| 2024 Q2 |
ValueThe fund maintains a concentrated value approach despite recent underperformance relative to growth stocks. The manager emphasizes that valuations matter over longer time horizons and believes the cheapest part of the market is meaningfully undervalued versus its long-term history. They expect value to outperform in the coming decade as market concentration reverses. |
Value Undervalued Cheap Multiples Outperformance |
JapanThe portfolio has exposure to deep-value Japanese companies benefiting from regulatory reform and improved capital allocation. Several Japanese holdings have converted strong operational performance into shareholder returns, with companies like Nippon Television Holdings announcing buybacks and auto suppliers NHK Spring and Tokai Rika demonstrating value investing opportunities. |
Japan Regulatory Reform Capital Allocation Buybacks Auto Parts | |
Small CapsThe fund has significant exposure to US midcap consumer-facing businesses with solid long-term franchises that have fallen to attractive prices due to cyclical headwinds. These include companies like Stanley Black & Decker, Mohawk Industries, La-Z-Boy, and Sally Beauty. |
Small Caps Midcaps Consumer Cyclical Franchises | |
| 2023 Q4 |
RatesInterest rates act as a financial curfew - when zero, capital flows freely to uneconomic ventures, but higher rates restore discipline and end the era of unlimited free money that characterized the last decade. |
Interest rates Zero rates Capital allocation Monetary policy |
ValueTraditional value businesses face less competitive pressure as subsidized disruptors fail, creating opportunities for profit growth and re-rating given significant valuation dispersion between value and growth. |
Value investing Valuation dispersion Re-rating Traditional businesses |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 14, 2024 | Fund Letters | Schroders Value Perspective Global | NWG.L | NatWest Group plc | Financials | Banks | Bull | London Stock Exchange | buybacks, capital return, Cost Reduction, Operational Turnaround, return on equity, UK Banks, Value | Login |
| Nov 14, 2024 | Fund Letters | Schroders Value Perspective Global | BARC.L | Barclays PLC | Financials | Banks | Bull | London Stock Exchange | Branch Rationalization, capital return, cost-cutting, return on equity, UK Banks, undervalued, Value | Login |
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