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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Moerus returned 5.37% in H1 2026, lagging AI-driven benchmarks but outperforming over longer periods. Energy holdings led gains from Iran conflict while precious metals declined."
The Moerus Worldwide Fund returned 5.37% in H1 2026, lagging benchmarks amid an AI-driven frenzy that saw capital flood into technology stocks while fleeing traditional sectors. The Fund significantly outperformed in Q1 before giving back gains in Q2 as semiconductor stocks soared. Energy holdings were the largest contributors, benefiting from the Iran conflict and oil price surge, with positions in Valaris, Aker ASA, Tidewater, and International Petroleum performing well. Precious metals holdings declined in Q2 on inflation concerns and rate expectations. Manager actively avoids AI-related stocks due to excessive valuations and downside price risk, drawing parallels to the dot-com bubble. The bifurcated market created opportunities in unloved areas, with new positions initiated in UK homebuilding, agricultural equipment, and Indian life insurance and chemicals. Manager eliminated Valaris following Transocean takeover and redeployed proceeds. Despite near-term underperformance, the Fund has significantly outperformed both benchmarks over 3, 5, and 10-year periods. Manager remains committed to patient, contrarian approach focused on discounted prices and long-term value creation.
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