| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.5% | 4.5% | 34.2% |
| 2025 |
|---|
| 34.2% |
The Thornburg International Equity Fund delivered a 4.45% return in Q4 2025, slightly underperforming its benchmark but achieving strong full-year outperformance with a 34.21% gain versus 32.39% for the MSCI ACWI ex-U.S. Index. The fund maintains a focused portfolio of approximately 50 world-class businesses trading at attractive valuations relative to their earnings power. Key contributors included Samsung, AstraZeneca, and Roche, while detractors included Alibaba and Linde. The portfolio remains overweight industrials, utilities, and financials while maintaining regional overweights in France, Japan, and Germany based on bottom-up fundamental analysis. Trade tensions, AI-driven technology strength, and divergent central bank policies created market volatility that the managers welcomed for positioning opportunities. The fund made various position adjustments during the quarter to balance downside risk and upside potential. With a 28-year track record of outperforming its benchmark by nearly 3% annually, the fund continues to focus on long-term capital appreciation through disciplined stock selection and fundamental analysis.
Thornburg International Equity Fund seeks to identify premier foreign producers of goods and services through bottom-up analysis, consistently seeking stocks trading at a discount to intrinsic value.
Global economic growth is projected to slow to 2.9% in 2026 from an estimated 3.2% in 2025, according to Bloomberg composite forecasts, driven by U.S. trade tariffs, policy uncertainty and regional challenges. The European Union is expected to grow a modest 1.4% this year, supported by stable monetary policy and fiscal stimulus. Japan's growth is projected to decelerate to 0.8%, amid rising rates. China's growth is losing steam, despite Beijing's monetary and fiscal stimulus.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 11 2026 | 2025 Q4 | 005930.KS, 4901.T, 6501.T, 6758.T, 8306.T, AZN, BABA, BNP.PA, BZ, CP, DPW.DE, LIN, NN.AS, ROG.SW, SU.PA, TTE | China, Europe, fundamentals, international, Japan, value | - | Trade tensions remained a significant theme with continuing negotiations between the U.S. and major trade partners including China, which is also in contentious trade talks… |
| Oct 10 2025 | 2025 Q3 | - | Artificial Intelligence, financials, International Equities, Japan, semiconductors | - | Thornburg highlights strength in AI-driven semiconductor and tech names, with Samsung and Alibaba leading returns. The fund remains overweight Japan, France, and industrials while underweight… |
| Jun 30 2025 | 2025 Q2 | - | Discounts, International Equities, Margin Of Safety, Quality, valuation | - | The letter emphasizes valuation discipline across global equities amid macro uncertainty and uneven regional growth. Management focuses on buying high-quality international businesses trading at discounts… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
Trade PolicyTrade policy dominated 2025 with surprise tariffs on Canada, Mexico and China igniting inflation fears and fracturing the post-WWII trade order. The administration threatened sweeping 125% tariffs in April, the highest U.S. tariff rates since 1935, before stepping back to bilateral deals. This policy uncertainty drove demand for tangible assets as hedges. |
Tariffs Trade War Bilateral Inflation Policy | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
InternationalHigh-quality international businesses trade at fractions of US multiples, with the manager positioning clients to take advantage of this divergence. Despite US equity market dominating investor mindshare, the rest of the world returned 32.6% in dollar terms in 2025 versus SPY's 17.7%. |
Discount Opportunity Outperformance Quality Positioning | |
JapanJapan offers tremendous value opportunities with one-third of companies trading below book value. Corporate governance reforms, record shareholder returns, and structural changes like unwinding cross-holdings are unlocking value. The investment opportunity is in early innings and could last several years. |
Corporate Governance Value Reforms Shareholder Returns Cross Holdings | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
| 2025 Q2 |
ValuationAI-related companies continue to command premium valuations while other sectors remain reasonably priced. This valuation divide continues to guide investment activity, with the fund remaining wary of companies trading at exceedingly high valuations that imply exceptional multi-year earnings growth. |
Premium Divide Discipline Stretched Reasonable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Selected technology-related companies held across several of our funds contributed for the quarter, particularly established franchises such as Samsung Electronics and Alphabet (Google). While the shares of both companies soared upward in price during the year, we believe they remain reasonably valued relative to their near-term growth prospects. |
| 6758.T | Sony |
| 8306.T | MUFG is the largest and most diversified Japanese financial group |
| AZN | World-class pharmaceutical and medical products manufacturer |
| BABA | our Asian investments performed strongly with Alibaba and Jardine Matheson up 63% |
| BNP.PA | Paris-based bank serving commercial, retail, investment, private and corporate banking services internationally |
| CP | Railroads operator transporting goods across Canada, the U.S. and Mexico |
| DPW.DE | Deutsche Post, the German diversified logistics company, was also strong following resilient earnings despite tariff-related challenges, driven by robust pricing power and cost control. |
| LIN | While the company remains a high-quality global leader in industrial gases, shares of Linde plc declined nearly 10% in Q4 due to a persistent industrial gas volume recession, softer guidance and global macroeconomic concerns. From a macro standpoint, the company continues to struggle with negative base volumes in its core industrial segments. |
| NN.AS | NN Group, a leading Dutch life and non-life insurance company and the Fund's third largest holding, generated a total return of 85% in USD terms last year. Despite this strong return, the shares continue to trade at a 10% discount to book value, and 8.5x 2026 estimated earnings. Management stands out as highly efficient capital allocators. |
| ROG.SW | Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions. We also trimmed several larger holdings, including Roche, Novartis, Safran, and TotalEnergies, whose stock prices had approached underlying intrinsic value. |
| SU.PA | Roughly one third of the portfolio, from Legrand to Schneider to Microsoft, is involved in the AI build-out in some way, from power to cooling to efficiency support. |
| TTE | Global oil & gas producer and distributor and low carbon electricity supplier |
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