| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.7% | 5.7% | - |
The Spheria Global Opportunities Fund returned 4.7% in June 2026, underperforming its benchmark by 0.8% as market leadership narrowed dramatically around AI-related themes. The fund's 5.7% quarterly return lagged the benchmark's 13.7%, reflecting the hostile environment for valuation-disciplined approaches. SharkNinja led contributors, rising 25% after raising guidance on stronger-than-expected US consumer demand driven by innovation rather than macro tailwinds. Santos detracted, falling 8% as Middle East peace developments removed oil's geopolitical risk premium. The manager views current markets as running on narrative rather than arithmetic, with extreme concentration exemplified by SanDisk's 4,900% rise dominating small-cap index returns. Interest rates have deteriorated, with yields elevated and expectations shifting toward further rises. Gold's prior enthusiasm has faded. The manager refuses to chase unjustified valuations despite recent underperformance, instead focusing on the valuation dislocation in quality businesses with pricing power and strong cash generation. The portfolio holds 30-80 stocks across global small and microcap companies, maintaining patient capital discipline while identifying mispriced opportunities created by thematic concentration.
Spheria maintains strict valuation discipline in a market driven by AI narratives and extreme concentration, refusing to chase prices unjustified by discounted cash flows while identifying mispriced quality businesses with pricing power, clean balance sheets, and recurring cash generation that offer attractive entry points for patient capital.
The manager maintains a cautious stance on the broader market environment, viewing current valuations as elevated and driven more by narrative than fundamentals. While acknowledging the reality of technological shifts like AI, the concern centers on extreme market concentration and the hostile environment this creates for valuation-disciplined investing. The recent underperformance is attributed to this discipline rather than a flaw in approach. The manager sees opportunity in the valuation dislocation created by thematic concentration, particularly in quality businesses with pricing power and strong cash generation that are being overlooked. The tone is patient and resolute, emphasizing adherence to valuation discipline despite near-term headwinds.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 27 2026 | 2026 Q2 | BMI, HEM.ST, IPAR, SN, STO.AX | AI, consumer, energy, global, Market Concentration, small caps, value |
SN STO.AX |
Spheria underperformed in Q2 2026 as AI narrative dominance and extreme market concentration penalized valuation discipline. SharkNinja's innovation-driven consumer strength offset Santos's oil price weakness. The manager views markets as overextended on narrative versus fundamentals, with rates deteriorating and concentration creating fragility. Strict adherence to discounted cash flow discipline continues despite headwinds, targeting mispriced quality businesses with pricing power overlooked by thematic momentum. |
| Apr 29 2026 | 2026 Q1 | CF, ITRK.L, USLM | energy, Fertilizers, global, Middle East, Quality, small cap, valuation |
CF ITRK.L |
Spheria Global Opportunities outperformed in March despite Middle East tensions, benefiting from timely CF Industries addition as fertilizer supply disruptions boosted prices. Used Intertek weakness as buying opportunity at attractive 12x EBIT valuation. Portfolio repositioned toward quality businesses with strong cash generation and conservative balance sheets at sensible valuations. |
| Jan 14 2026 | 2025 Q4 | ACLR.SW, CARG, EXPD, HEM.ST, ITRK.L, JKHY, PAYC, RMV.L, SPNS, YETI | financials, global, industrials, Quality, small caps, technology |
JKHY PAYC |
Spheria's global small cap fund underperformed in Q4 2025 as quality-focused strategies faced headwinds from markets favoring unprofitable AI-concept stocks. Strong performers included banking software provider JKHY and logistics company Expeditors, while HR software firm Paycom struggled with soft job market conditions. Managers maintain conviction in their disciplined, valuation-aware approach to high-quality businesses. |
| Oct 30 2025 | 2025 Q3 | CARG, FERG, HEM.ST, ITRK, LPLA, SPNS, UHR.SW, USLM, WMK | AI, fundamentals, global, Quality, risk management, small cap, Speculation, value |
LPLA USLM |
Spheria Global Opportunities Fund underperformed in October as markets rewarded speculation over fundamentals, with loss-making companies outperforming quality businesses. Despite frothy market conditions favoring AI momentum and excessive valuations, the fund maintains disciplined focus on cash-generative, high-quality businesses at reasonable prices, believing this approach will deliver superior long-term returns when markets return to fundamentals. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI has become the dominant market theme in 2026, driving extreme concentration in market returns. The technological shift is real and the Fund holds businesses positioned to benefit, but the concern centers on how narrow the leadership has become. Within the benchmark, SanDisk's NAND-driven run accounted for an outsized share of index returns that no single small-cap name would ordinarily carry. |
Artificial Intelligence Technology Market Concentration Semiconductors NAND |
OilOil provided a clear positive signal in the period, falling sharply late as Middle East tensions eased, representing a genuine if precarious easing of inflation pressure. Santos, an Australian oil and gas producer, fell during June following confirmation of a peace framework between the US and Iran, which removed much of the geopolitical risk premium from oil prices. |
Energy Geopolitics Middle East Inflation LNG | |
RatesThe rates picture has deteriorated, with yields staying elevated and expectations swinging decisively toward further rate rises. Markets that shrug off tighter policy while sitting at or near all-time highs tend to be running on narrative rather than arithmetic, in the manager's experience. |
Interest Rates Monetary Policy Yields Central Banks | |
ConsumerSharkNinja's 1Q26 result showed the read on the US consumer through June proving stronger again, with independent Nielsen point-of-sale data showing domestic sell-through accelerating sharply into quarter end. The signal is that SharkNinja is generating its own demand through innovation rather than leaning on a buoyant discretionary backdrop, against estimated industry growth of only around 2.6%. |
Consumer Discretionary Innovation Home Appliances Direct-to-Consumer | |
GoldLast year's enthusiasm centered on resources, gold in particular, which now sits well off its highs as its macro underpinnings look tired. The theme has shifted away from commodities toward AI-related investments. |
Commodities Precious Metals Resources | |
Market ConcentrationLeadership has narrowed to an unusual degree in 2026. Within the benchmark, SanDisk's NAND-driven run has accounted for a share of index returns that no single small-cap name would ordinarily carry. Strip that leadership out, and the market underneath looks very different. This concentration creates valuation dislocation elsewhere in quality businesses with genuine pricing power, clean balance sheets, and recurring cash flows. |
Market Leadership Valuation Dispersion Index Concentration | |
| 2026 Q1 |
FertilizersCF Industries benefited from Middle East conflict disrupting nitrogen fertilizer supply through Strait of Hormuz, sending prices sharply higher. CF's North American production base and low-cost domestic feedstock provided structural advantage during supply disruption. |
Nitrogen Ammonia Urea Supply Chain Energy |
OilMiddle East conflict escalation and Strait of Hormuz shipping disruption sent oil prices spiking, creating inflationary concerns and pushing bond yields higher. Fund was underweight energy complex heading into March but added exposure timely. |
Energy Geopolitics Supply Chain Inflation Commodities | |
Testing & InspectionIntertek fell sharply despite solid results showing revenue growth, margin expansion, and strong cash generation. Market overreacted to currency headwinds and forward guidance, creating opportunity at undemanding 12x EBIT valuation for quality business. |
Quality Assurance Global Services Regulatory Valuation UK | |
| 2025 Q4 |
ValueFund focuses on buying shares in decent operating businesses at significant discounts to intrinsic value. European value stocks had their largest outperformance versus growth stocks in 30 years, beating them by 19 percentage points. Manager believes value will continue to outperform growth during the remainder of this decade. |
Value Investing Discount Intrinsic Value P/E Ratios Deep Value |
InsuranceVienna Insurance Group was the best performing stock, generating 158% return in USD. NN Group generated 85% return despite trading at discount to book value. Both companies demonstrate strong capital allocation and market leadership positions in their respective regions. |
Life Insurance P&C Insurance Central Europe Capital Allocation Book Value | |
ShippingFund exited car carrier operating companies after generating exceptional 110% annual IRR over five years. Wilhelmsen Holding remains a top position at 48% discount to NAV, providing exposure to high-quality maritime assets with less cyclical risk. |
Car Carriers Maritime Cyclical NAV Discount Freight Rates | |
BiotechnologyNew investment in RTW Biotech reflects belief that gene splicing and editing are the next big thing over the coming generation. Fund bought shares at 23% discount to NAV and expects to hold for many years, anticipating multiple returns on original investment. |
Gene Editing Biotech Funds M&A Activity China Innovation Patent Cliff | |
Private EquityFund deployed proceeds from Altamir sale into other well-managed listed private equity funds trading at circa 30% discounts to NAV. These funds compound NAV at low teens rates and are considered top quartile, offering excellent deployment opportunities on attractive terms. |
Listed Private Equity NAV Discounts Secondaries Market Capital Deployment Top Quartile | |
| 2025 Q3 |
AIMarkets remained captivated by the relentless momentum of all things AI, a theme increasingly shaping narratives around productivity, employment, and market structure, even as a growing chorus warned of speculative excess. |
Artificial Intelligence Productivity Speculation Technology Market Structure |
Risk AppetiteMarket conditions are displaying increasingly frothy characteristics, with high price-to-earnings multiples and loss-making companies significantly outperforming fundamentally sound businesses with strong returns and balance sheets, a classic indicator of excessive market exuberance. |
Speculation Valuations Market Exuberance Loss Making Fundamentals | |
QualityThe fund maintains disciplined focus on cash generation, balance sheet strength, and sensible valuations, believing high-quality, cash-generative businesses purchased at reasonable prices provide the surest path to long-term outperformance. |
Cash Generation Balance Sheet Valuations Fundamentals Long Term |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 27, 2026 | Fund Letters | Spheria Global Opportunities Fund | SN | SharkNinja, Inc. | Furnishings, Fixtures & Appliances | Household Appliances | Bull | New York Stock Exchange | Consumer Discretionary, direct-to-consumer, e-commerce, high-ROIC, household appliances, innovation, market share gains, Share Buyback, US consumer | Login |
| Jul 27, 2026 | Fund Letters | Spheria Global Opportunities Fund | STO.AX | Santos Ltd | Oil & Gas E&P | Oil & Gas Exploration & Production | Bull | Australian Securities Exchange | Asia-Pacific, Australia, Energy security, Free Cash Flow, LNG, Oil & Gas, production growth, shareholder returns, Value | Login |
| Apr 29, 2026 | Fund Letters | Spheria Global Opportunities Fund | CF | CF Industries | Agricultural Inputs | Fertilizers & Agricultural Chemicals | Bull | New York Stock Exchange | cash generation, commodity, Energy Complex, Fertilizer, geopolitical, manufacturing, natural gas, Nitrogen, North America, Structural Advantage | Login |
| Apr 29, 2026 | Fund Letters | Spheria Global Opportunities Fund | ITRK.L | Intertek | Specialty Business Services | Research & Consulting Services | Bull | New York Stock Exchange | Certification, Global Services, Inspection, Quality Assurance, Regulatory, strategic review, supply chain, Testing, UK Listed, value unlock | Login |
| Jan 14, 2026 | Fund Letters | Marcus Burns | JKHY | Jack Henry & Associates, Inc. | Information Technology | Application Software | Bull | NASDAQ | banking, cloud, Moat, Recurring, Software | Login |
| Jan 14, 2026 | Fund Letters | Marcus Burns | PAYC | Paycom Software, Inc. | Information Technology | Human Capital Management Software | Bear | New York Stock Exchange | HCM, Jobs, Payroll, Software, valuation | Login |
| Oct 30, 2025 | Fund Letters | Marcus Burns | LPLA | LPL Financial Holdings Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | Advisors, cashflow, growth, Platforms, synergies | Login |
| Oct 30, 2025 | Fund Letters | Marcus Burns | USLM | United States Lime & Minerals, Inc. | Materials | Construction Materials | Bull | NASDAQ | Barriers, cashflow, duopoly, materials, Pricing | Login |
| TICKER | COMMENTARY |
|---|---|
| SN | SharkNinja is a global product design and technology company that develops and markets home appliances under its Shark and Ninja brands, spanning cleaning, cooking and beverage, food preparation, and beauty and home environment categories. SharkNinja's model is built around a high-velocity innovation engine, launching a steady cadence of new products across roughly 38 categories and pairing them with heavy direct-to-consumer and social marketing to disrupt legacy premium incumbents on price and design. That approach has driven consistent share gains in vacuums, floorcare and small kitchen appliances, and supports a business that generated around US$6.4 billion of revenue in 2025 at a near 40% ROIC. The shares rose over the month as SharkNinja announced its 1Q26 result in which it raised full year 2026 guidance, with the read on the US consumer through June proving stronger again. Independent Nielsen point-of-sale data showed domestic sell-through accelerating sharply into quarter end, aided by the earlier timing of Amazon Prime Day and viral direct-to-consumer demand, against estimated industry growth of only around 2.6%. The signal is that SharkNinja is generating its own demand through innovation rather than leaning on a buoyant discretionary backdrop. The balance sheet is lightly geared, and strong cash generation is funding a US$750 million buyback alongside continued reinvestment in the product pipeline. SharkNinja trades on 16.5x FY27 EV/EBIT, which is more than justified by the strength of the innovation engine, the high returns on capital and the market share gains it continues to deliver. |
| IPAR | Interparfums was one of the largest contributors to performance over the month, rising 19%. |
| BMI | Badger Meter was one of the largest contributors to performance over the month, rising 20%. |
| HEM.ST | Hemnet Group was one of the largest detractors from performance, falling 25% during the month. |
| STO.AX | Santos is Australia's second-largest independent oil and gas producer, with a portfolio spanning LNG, domestic gas, crude oil and condensate across Australia, Papua New Guinea, Timor-Leste and Alaska. Santos operates a low-cost, long-life upstream portfolio anchored by LNG, with interests in PNG LNG, Gladstone LNG and Darwin LNG providing exposure to Asian gas demand alongside domestic Cooper Basin and Western Australian supply. Management runs the business to an all-in free cash flow breakeven of US$45 to US$50 per barrel and targets returning at least 60% of free cash flow to shareholders from 2026. Its Barossa LNG and Pikka Oil (Alaska) projects are ramping up and are expected to lift group output by roughly 15% to 27% in 2026, moving Santos from a heavy capital investment phase into stronger cash generation. The shares fell during June following confirmation of a peace framework between the United States and Iran, which removed much of the geopolitical risk premium from oil prices and in turn weighed on Santos. Nevertheless, we believe that ongoing regional instability reinforces the importance of energy security and the need to diversify energy supply away from the Middle East, enhancing the strategic value of Santos's portfolio. Santos trades on 7x FY26 EV/EBIT, a multiple that should look increasingly attractive as Barossa and Pikka reach full production. With output stepping up and capital spending rolling off, Santos offers a strategically valuable portfolio, growing cash generation and an undemanding valuation. |
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