| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
Troy Global Equity Strategy underperformed in 2025 as global equity markets advanced, despite portfolio companies maintaining excellent operating momentum. The Strategy's poor performance stemmed from three factors: animal spirits favoring cyclical and speculative companies, AI disruption concerns affecting data and software holdings, and specific mistakes with Fiserv and Diageo. The prominence of AI hurt performance by benefiting semiconductor companies not owned and questioning the durability of several portfolio companies. However, AI disruption is more imagined than real, with earnings remaining sound for companies in the crosshairs. Major technology holdings like Alphabet, Microsoft, and Meta continue to see accelerating revenue growth driven by AI demand that outstrips supply. Data companies like Experian and LSEG face hypothetical competitive threats but possess proprietary datasets and regulatory moats that provide protection. The Strategy now trades at a historic discount on free cash flow yield despite superior financial metrics, positioning it well for future returns as valuations of other market areas look stretched.
The Strategy's companies maintained excellent operating momentum in 2025 despite poor share price performance, creating a significant opportunity as the portfolio trades at a historic discount to the market on free cash flow yield despite superior financial productivity, reinvestment and growth.
The Strategy is particularly well placed with reasonably valued, lowly levered, and economically resilient companies. In a dynamic environment defined by technological change, the differentiated focus on adaptive reinvestment to sustain long-term growth is a powerful and durable foundation. Actions will continue to be guided by a disciplined focus and objective of achieving double-digit returns that compound over the long term.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 18 2026 | 2025 Q4 | AMZN, DEO, EXPN.L, FI, GOOGL, LSEG.L, META, MSFT, NVDA | AI, Cloud, Data, global, Quality, technology, value |
FISV DGE LN LSEG LN EXPN LN |
Troy Global Equity Strategy underperformed in 2025 despite strong portfolio company fundamentals, creating opportunity. AI concerns pressured data and software holdings while benefiting unowned semiconductor stocks. The Strategy now trades at historic discount on free cash flow yield with superior financial metrics, well-positioned as other market areas appear stretched. |
| Oct 30 2025 | 2025 Q3 | AMD, AMZN, GOOGL, META, MSFT, NVDA, ORCL | AI, Central Banks, gold, inflation, risk management, Speculation, technology, Valuations | - | Troy warns of dangerous parallels between today's AI boom and the 2000 dotcom bubble, with extreme market concentration and speculative retail behavior creating vulnerability. Despite trimming Microsoft and Alphabet holdings, they maintain defensive positioning in gold and quality stocks while awaiting the inevitable reversion that historically follows such speculative excess. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI remained the dominant theme driving US and global returns. Communication and IT sectors delivered +33% and +23.6% respectively despite concerns about AI infrastructure spend potentially imploding. Projected hyperscaler CAPEX could reach $500bn in 2026, over three times pre-ChatGPT levels, creating enormous demand for AI equipment and energy. |
Artificial Intelligence Infrastructure CAPEX Hyperscalers Technology |
EnergyGlobal data centers use 1.5% to 3% of total electricity, with AI workloads consuming 5% to 15% of that. Given vast AI growth projections, energy production faces challenges keeping up. 80% of energy production is hydrocarbon generated, but refining capacity can't keep up with demand growth rates. |
Electricity Data Centers Hydrocarbons Refining Power | |
InflationServices inflation has become sticky with key items like food running at alarmingly high levels. The multi-variate nature of inflation is different this time. Energy costs cannot sink much lower, and if energy inflation picks up, it feeds back into services inflation, creating structural concerns. |
Services Food Energy Costs Sticky Structural | |
RatesMarkets watching for equilibrium between full employment and stable inflation to determine R*. The long-end of yield curves remains anchored to pre-covid norms, increasingly inconsistent with higher debt, higher R* and less credible policy. Risk of adjustment and whiplash if markets cling to outdated anchors. |
R* Yield Curve Neutral Rate Bond Yields Equilibrium | |
Emerging MarketsEM performance was broad-based and impressive, with MSCI EM delivering +34% and Asia +33%, both outperforming the S&P 500's +18%. Performance compared favorably to developed markets with attractive valuations at the start of 2026. |
MSCI EM Asia Outperformance Valuations Broad-based | |
| 2025 Q3 |
AIThree years after ChatGPT launched an AI investment frenzy, the gap between technological promise and financial reality remains wide. The monetisation of AI is already here, but perhaps not at the scale that some share prices are currently discounting. Much of today's AI investment is spent on semiconductors with short useful lives and rapid obsolescence. |
Artificial Intelligence ChatGPT Semiconductors Capital Expenditure Technology |
GoldGold has continued its bull market into 2025, rising c.50% in US dollar terms and c.40% in sterling. Several structural forces continue to underpin gold, including persistent central bank accumulation, fiscal dominance with rising debt supply, and geopolitics with de-globalisation and tariff risks. |
Precious Metals Central Banks Inflation Hedge Currency Diversification | |
Risk AppetiteInvestor behaviour has taken on a more speculative feel with the options market booming and retail participation returning to 2021 levels. Retail client portfolios exhibit 1.7x the volatility of the S&P 500, with over-concentration in thematic ETFs and a tendency to chase past performance. |
Speculation Options Retail Investors Volatility ETFs | |
InflationCentral banks are now cutting interest rates when inflation is well above target. Real returns from government bonds are likely to be poor in the future, which explains preference for index-linked and short-duration issues. The path of monetary dilution was set out over decades. |
Central Banks Interest Rates Monetary Policy Government Bonds Real Returns |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 18, 2026 | Fund Letters | Sebastian Lyon | FISV | Fiserv, Inc. | Information Technology | Data Processing & Outsourced Services | Bear | New York Stock Exchange | earnings reset, Execution, exit, Governance, Payments | Login |
| Jan 18, 2026 | Fund Letters | Sebastian Lyon | DGE LN | Diageo plc | Consumer Staples | Distillers & Vintners | Bear | New York Stock Exchange | brands, consumer staples, Consumption trends, Returns, turnaround | Login |
| Jan 18, 2026 | Fund Letters | Sebastian Lyon | LSEG LN | London Stock Exchange Group plc | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | AI, Data, Derating, Exchanges, Moats | Login |
| Jan 18, 2026 | Fund Letters | Sebastian Lyon | EXPN LN | Experian plc | Industrials | Research & Consulting Services | Bull | New York Stock Exchange | AI, Credit data, Moats, productivity, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| DEO | Examples include Tidewater, Valaris, Constellation Brands, Diageo and Trex. We have discussed TDW and VAL previously, as well as STZ and DEO here. |
| EXPN.L | Experian's shares were -1% in 2025. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. Experian is valued on a prospective 4.5% equity FCF yield. We have added to the Strategy's investments this year. |
| FI | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| LSEG.L | LSEG's shares were -20%. They are therefore illustrative of companies that have held back the Strategy's returns this year. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. LSEG is at 6.1% FCF yield. We have added to the Strategy's investments this year. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
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