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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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The Heptagon Future Trends Fund 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (The Heptagon Future Trends Fund)

Primary Source Intelligence • Q3 2026 Letter Analysis

The Heptagon Future Trends Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, The Heptagon Future Trends Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-8.6%

YTD+14.5%

Positioning StanceBULLISH

Market CapLarge Cap

GeographyGlobal

Digest Analysis

Quick Take

"Exploiting rate-driven multiple compression and summer dispersion, the fund redeployed capital by establishing a new position in Align Technology and exiting Novo Nordisk and Xylem while selectively topping up beaten-down growth compounders."

Executive Summary

The Heptagon Future Trends Fund returned -8.6% net of fees in the third quarter of 2026, though it remains up 14.5% net of fees year-to-date and 16.1% over the trailing 12 months, outperforming both its MSCI World Index benchmark and global large-cap growth peers. Following an exceptional first half where the portfolio gained 25.3% net of fees, third-quarter performance was hampered by sharp momentum reversals, summer liquidity thinning, and extreme dispersion between crowded longs and shorts. Net and gross exposures remained anchored in high-conviction thematic growth businesses, while cash and selective profit-taking from outperforming positions were strategically deployed to fund new entries and lean into oversold compounders. The manager’s macroeconomic framework highlights that rising long-term government bond yields—with the US 10-year yield surging from 4.5% to 5.3% and the 30-year yield reaching 5.6%—mechanically compressed valuation multiples across long-duration growth assets. Management views this yield adjustment as a healthy normalization rather than a structural headwind, drawing parallels to the resilient equity environment of the late 1990s. The fund emphasizes that underlying corporate fundamentals remain disconnected from equity pricing, as 73% of portfolio companies beat second-quarter earnings expectations and 65% raised guidance. Meanwhile, ongoing AI infrastructure buildouts and easing inflationary pressures reinforce the secular backdrop. Portfolio turnover was deliberate and disciplined during the quarter. The fund initiated a new high-conviction position in Align Technology, funded by a complete divestment of water technology provider Xylem due to municipal budget constraints. The manager also fully exited a decade-long holding in Novo Nordisk following persistent execution stumbles, lost market share in obesity treatments, and an unconvincing turnaround strategy. Reallocations were funded through trimming top gainers like Coherent and Quanta Services, with incremental capital deployed into beaten-down holdings including Nextpower, Axon Enterprise, and Siemens Energy.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

82%

CautiousHigh

High Conviction (82%)

Management maintains a focused, high-conviction portfolio with its top five positions (Palo Alto, ASML, Intuitive Surgical, Cheniere, Galderma) comprising 28.2% of total assets. The manager demonstrated decisive capital allocation by completely eliminating a decade-old core position in Novo Nordisk when execution lagged, while aggressively adding to oversold holdings like Nextpower and Axon. Conviction is moderated slightly by diversified thematic exposure across thirteen distinct secular categories.

Growth Outlook

72%

BearishBullish

Bullish (72%)

The manager remains decidedly constructive, asserting that recent third-quarter drawdowns offer compelling entry points as fundamental earnings momentum disconnects from equity valuations. The portfolio trades at a lower forward multiple than at the start of the year despite upward consensus earnings revisions, with corporate fundamentals supported by 73% of holdings beating consensus estimates. Some caution is noted regarding near-term multiple compression caused by 5%+ US Treasury yields.

Risk Appetite

76%

DefensiveAggressive

Aggressive (76%)

Capital is aggressively positioned for long-term growth, with the fund maintaining high net equity exposure and initiating new growth positions in Align Technology. Management proactively deployed cash and harvested profits from outperforming names to top up holdings experiencing drawdowns greater than 30%. The strategy remains fully invested in long-duration compounders without resorting to defensive hedging or substantial cash hoarding.

Capital Deployment

74%

De-riskingDeploying

Deploying (74%)

Management actively deployed dry powder and cash generated from trimming winners like Coherent and Quanta Services into high-conviction ideas. The team initiated Align Technology and increased weightings across six existing holdings including Axon, Mercadolibre, and Nextpower. The fund closed the period with low net debt across holdings and negligible idle cash.

Forward Guidance

78%

CautiousExpansionary

Expansionary (78%)

Management signals an active buying posture, explicitly characterizing recent price weakness as an opportunity to lean into businesses trading at a 42% discount to estimated fair value. Specific near-term catalysts are targeted, including corporate Capital Markets Days for Nextpower and Align, along with earnings guidance updates for Siemens Energy. Capital allocation remains tilted toward scaling oversold compounders rather than harvesting risk.

Language Signal

75%

BearishBullish

Bullish (75%)

The letter consistently employs bullish framing, emphasizing that 'drawdowns create opportunities' and pointing to robust corporate health where 65% of portfolio companies raised guidance. Narrative descriptors such as 'de facto monopoly', 'unassailable moat', and 'superior growth' dominate discussions of core holdings. This optimism is balanced by candid critiques of execution failures in liquidated names such as Novo Nordisk and Xylem.

Perceived Risk

58%

Low RiskElevated

Moderate Risk (58%)

The manager acknowledges substantive macroeconomic friction, particularly the sharp upward move in 10-year US Treasury yields to 5.3% and ongoing geopolitical conflicts in the Gulf. However, broad systemic risks are viewed as manageable, with higher yields interpreted as a healthy renormalization toward late-1990s conditions rather than an impending financial crisis. Specific risks are concentrated in corporate execution, inflation stickiness, and customer financing costs.

Opportunity Density

74%

ScarceAbundant

Abundant (74%)

The manager perceives an attractive universe of growth compounders trading at significant valuation discounts relative to their historical medians. The fund's forward median P/E contracted from 31.1x to 23.5x while three-year projected revenue and earnings CAGRs accelerated to 14.4% and 20.5% respectively. Opportunity remains concentrated within high-quality market leaders rather than broad cyclical equities.

Time Horizon

78%

Short-TermLong-Term

Decade+ (78%)

The fund operates with a multi-year compounding horizon, framing portfolio prospects through 2028-2030 financial targets and long-term DCF fair value models. Core positions like Intuitive Surgical have been held since 2016, and management explicitly focuses on 'tomorrow's winners rather than today's index leaders'. Some nearer-term sensitivity exists around 12-month corporate guidance updates and management turnarounds.