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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, Brandes International Equity Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"Brandes International Equity underperformed in Q2 2026 as AI-driven technology concentration dominated markets. The manager trimmed semiconductor winners and maintains conviction in mission-critical enterprise software despite near-term pressure."
The Brandes International Equity Fund returned 3.58% in Q2 2026, underperforming the MSCI EAFE Index's 10.82% return as AI enthusiasm drove exceptional performance in technology stocks. The Fund's underweight position in technology, resulting from trimming AI-related holdings after strong appreciation, was the primary detractor. Semiconductor holdings Samsung, TSMC, Infineon, and STMicroelectronics contributed positively before the manager exited Infineon and STMicroelectronics. Software and IT services holdings including SAP, Capgemini, and NICE declined amid concerns about AI disruption, though the manager added to SAP based on its strategic importance. Emerging markets holdings in China, Mexico, and Brazil detracted, while pharmaceutical holdings weakened on drug pipeline concerns. The manager initiated positions in Kerry Group, NetEase, CNH Industrial, and Essity, viewing them as undervalued opportunities. The Fund maintains meaningful exposure to health care, consumer staples, and consumer discretionary, with underweights in financials and industrials. The manager believes the current environment of market concentration creates attractive opportunities for disciplined value investors to find overlooked companies with strong fundamentals and appealing valuations.
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