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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Polaris maintains an underweight position in expensive US mega-cap technology, redeploying capital into cash-generative global financials, energy producers, and defensive compounders benefiting from higher structural interest rates and resilient free cash flows."
The Polaris Global Equity Composite declined -0.17% net of fees in the third quarter of 2026, trailing the MSCI World Index benchmark return of 1.96%. On a year-to-date basis, the strategy generated a net return of 19.74% net of fees, significantly outperforming the benchmark's 12.09% return. Composite absolute outperformance was broad-based across seven of eleven sectors, specifically energy, financials, communication services, consumer discretionary, utilities, consumer staples, and industrials. Information technology served as the principal performance drag due to temporary sentiment-driven pullbacks in memory-chip producers. At the end of the quarter, cash stood at 2.1% of the portfolio, while regional exposure remained heavily underweight North America at 34.4% versus the benchmark's 76.2% allocation. The investment team's macroeconomic outlook is shaped by rising benchmark interest rates fueled by both near-term energy-driven inflation and structural government fiscal deficits. The U.S. 10-year Treasury yield surged above 5.2% during the quarter, accompanied by the Federal Reserve hiking rates to 3.75%–4.00% and crude oil topping $100 per barrel. Polaris argues that sovereign debt loads and interest burdens will keep yields elevated globally, challenging the narrow, mega-cap tech leadership that has driven passive index advances. The strategy maintains an intentional rotation toward value-oriented businesses possessing resilient, cash-generative operations capable of sustaining profitability in an elevated rate environment. Portfolio activity reflected disciplined capital recycling toward cash-generative franchises. Polaris initiated new long positions in business process outsourcing firm Genpact Ltd. and biotechnology innovator Regeneron Pharmaceuticals, citing strong commercial pipelines and discount valuations. The fund exited Webster Financial following its acquisition by Banco Santander, and fully liquidated Gilead Sciences due to shifting risk-reward dynamics and rising dependence on early-stage pipeline assets. Despite market concentration risks, the strategy remains positioned in competitively advantaged international financials, energy producers, and specialized industrials displaying resilient earnings and capital return programs.
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