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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Forager International Shares Fund 2026 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Forager International Shares Fund)

Primary Source Intelligence • Q2 2026 Letter Analysis

Forager International Shares Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Forager International Shares Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+7.14%

Annualized+12.3%

Positioning StanceNEUTRAL

Market CapSMID Cap

GeographyGlobal, US, APAC, Europe

Digest Analysis

Quick Take

"Forager deliberately sat out the AI bubble, returning negative 5.7% while markets soared on euphoria the manager views as unsustainable."

Executive Summary

The Forager International Shares Fund returned negative 5.7% for the year ending June 2026, significantly underperforming its benchmark as the AI bubble inflated to extreme levels exemplified by SpaceX's US$2 trillion IPO valuation. The manager deliberately avoided participating in the AI mania, instead selling what little exposure the fund had as valuations became unsustainable. The largest detractor was Fiserv, a 3.9% loss reflecting a process mistake where the manager held on despite deteriorating fundamentals and management instability. Japanese software holdings also suffered as global AI fears drove indiscriminate selling despite strong operating performance and improving corporate governance. Winners included Marex Group, ING Groep, and Linamar Corporation, all benefiting from specific operational catalysts. The manager draws parallels to the 2000 dot-com crash, noting today's hysteria is isolated to AI while other areas offer attractive valuations. The portfolio has been actively repositioned, clearing out fully valued winners and mistakes to concentrate in mispriced opportunities including Japanese software, European banks, and other cash-generative value stocks. The manager expects continued short-term underperformance but is positioned to profit when the bubble bursts.

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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

72%

CautiousHigh

High Conviction (72%)

The fund holds a concentrated portfolio of 20-40 positions with top 5 holdings representing 24.7% of NAV and specific position sizing disclosed (Cuscal 7.2%, Catapult 6.4%). The manager makes clear, falsifiable statements about the AI bubble bursting and specific thesis elements for holdings like ING Groep, Linamar, and Japanese software companies. The letter demonstrates willingness to hold through volatility in Japanese software and explicitly states positions like Nutex remain meaningful investments despite volatility. However, some hedging language exists around timing and the manager acknowledges mistakes like Fiserv, preventing a score above 0.75. The explanation and score are consistent with a concentrated, thesis-driven approach with clear conviction but not extreme concentration.

Growth Outlook

28%

BearishBullish

Bearish (28%)

The manager explicitly warns of an AI bubble comparable to history's greatest manias that will inevitably collapse, with trillions in infrastructure spending likely to generate disappointing returns. However, this bearish view on AI is balanced by constructive views on specific areas like European banks and Japanese software, and the manager sees abundant opportunities in value stocks. The net outlook is cautious with significant risk warnings but not entirely pessimistic given identified opportunities.

Risk Appetite

38%

DefensiveAggressive

Defensive (38%)

The fund is positioned defensively relative to the AI bubble, having sold all exposure to AI beneficiaries and maintaining 6.3% cash. However, the manager is not in full capital preservation mode and remains invested in concentrated positions in Japanese software, European banks, and other value opportunities. The positioning reflects selective caution rather than broad risk-off, with active deployment into specific mispriced areas offset by deliberate avoidance of the market's hottest sector.

Capital Deployment

43%

De-riskingDeploying

Net Neutral (43%)

The letter describes clearing out a significant portion of the portfolio by banking profits from fully valued winners like Comfort Systems, Zegona, and Macmahon, and exiting mistakes like Fiserv. This suggests net harvesting activity. However, the manager also states using share price falls to increase investments in Japanese software businesses and describes being very active in repositioning toward mispriced opportunities. Cash ended at 6.3% with no prior period comparison provided. The net activity appears to be rotation with modest de-risking rather than aggressive deployment or defensive positioning, scoring slightly negative given the emphasis on clearing out positions.

Forward Guidance

33%

CautiousExpansionary

Cautious (33%)

The manager explicitly states expectation for continued underperformance as long as the AI bubble inflates and is comfortable being unfashionable in the short term. The letter describes clearing out significant portions of the portfolio and walking away from positions, with language like we want to be as far away from it as possible regarding AI. While the manager sees opportunities and has been selectively adding to Japanese software, the overall action bias is cautious with explicit acceptance of near-term underperformance until conditions change.

Language Signal

35%

BearishBullish

Bearish (35%)

The letter is dominated by bubble, mania, FOMO, and risk language around AI, with extensive discussion of mistakes like Fiserv and detractors. Bearish framing includes warnings about trillions being poured into AI crashing into economic realities and comparisons to historical bubbles. This is partially offset by bullish language around specific opportunities in Japanese software, European banks, and value stocks described as sensible, cash-generative, and attractively priced. The net balance tilts negative given the prominence of bubble warnings and risk discussion.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

The manager devotes substantial discussion to systemic bubble risk, explicitly comparing the AI mania to history's greatest bubbles and warning that trillions in infrastructure spending will crash into economic realities. Specific threats are named including physical constraints, efficiency issues, and the risk that AI becomes a competitive capital sink rather than a monopoly. The letter includes detailed analysis of how bubbles burst and discusses downside scenarios with language like any suggestion that demand growth might slow would be a huge blow. This represents identifiable, named risks with meaningful discussion, though not quite at the extreme systemic warning level that would warrant 0.85+.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The manager explicitly describes finding an abundance of sensible, cash-generative businesses and states the extreme dispersion has set up a fertile hunting ground. Specific opportunities are identified across multiple geographies including Japanese software, European banks, US building materials, and UK markets. The letter describes plenty of places to hide from the exuberance and islands of value the momentum crowd has simply ignored. This represents a rich, broad opportunity set across sectors and geographies, though not quite at the 0.80+ level that would suggest opportunities everywhere with no selectivity required.

Time Horizon

68%

Short-TermLong-Term

Multi-Year (68%)

The manager explicitly states being comfortable being unfashionable in the short term and expecting both funds to continue underperformance as long as the bubble goes on, demonstrating willingness to wait for thesis realization. The letter describes multi-year holdings like ING Groep acquired almost three years ago and Japanese software positions being increased during weakness with expectation of three-year earnings multiples. However, some positions like Marex and Comfort Systems were traded tactically within 12-18 months, and the manager discusses trimming positions as valuations expand. This represents a multi-year thesis with patience to hold through volatility but not the decade-plus permanent capital horizon that would warrant 0.85+.