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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Sands Capital Emerging Markets Growth Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"Emerging Markets Growth returned 29% in Q2 2026, driven by AI infrastructure businesses as memory shortages broadened from HBM into conventional DRAM and NAND. Sequential memory price increases of 60-90% reflect structural, multiyear supply constraints."
Sands Capital Emerging Markets Growth delivered its second-best quarter of absolute investment results on record, returning 29.1% net in Q2 2026, driven primarily by AI infrastructure businesses including SK hynix, Samsung Electronics, and Taiwan Semiconductor. The memory shortage broadened beyond high-bandwidth memory into conventional DRAM and NAND, with sequential price increases of 60-90% as AI inference and agentic workloads increase demand across the memory stack. Management views the supply-demand imbalance as structural and multiyear, with meaningful capacity additions difficult before H2 2027. The portfolio continued to broaden semiconductor exposure, adding Chroma ATE, Hyosung Heavy Industries, Montage Technology, and SK Square, while also tactically adding to cyclically oriented Indian businesses given improving valuations and macroeconomic resilience. China internet stocks lagged as investors rotated into AI infrastructure, though Alibaba's cloud revenue growth accelerated to 38% year-over-year. Despite the strong quarter, the portfolio ended trading at 13 times forward earnings, one of its lowest absolute valuation levels and lowest premiums to the MSCI EM. Management believes the portfolio's high earnings growth expectations combined with historically low valuations create an attractive setup for multiyear investors.
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