Unlocking Value: Navigating Global Markets with a Disciplined Investment Approach
Global Market Dynamics: A Quarter of Broad-Based Gains
During the recent quarter, worldwide stock markets demonstrated an upward trend, with robust performance observed across nearly all sectors. Information technology and financial services sectors were particularly strong drivers of growth, whereas consumer staples represented the sole segment to experience a downturn. Geographically, the United States played a primary role in bolstering market strength, closely followed by Japan, while Denmark and Germany saw minor declines.
Investment Performance Review: Outperforming and Underperforming Assets
The investment portfolio recorded a net gain of 4.70% over the period. In comparison, the MSCI World Index achieved a return of 7.27% during the same timeframe.
Key Investment Drivers: Identifying Success and Setbacks
Several companies positively influenced the portfolio’s results, including luxury conglomerate Kering, e-commerce giant Alibaba Group, and technology leader Alphabet Class A. Conversely, some holdings, such as Charter Communications Class A, managed care provider Centene, and beverage company Keurig Dr Pepper, negatively impacted performance.
Leading Contributions: Highlighting Top Performers
Kering saw positive momentum fueled by leadership changes and improving revenue trends. Alibaba Group benefited from strong earnings, particularly in its Cloud segment, driven by rapid advancements in Chinese AI. Alphabet's stock appreciated due to a favorable antitrust ruling and better-than-expected earnings, with growth in Google Search and AI-driven Cloud services.
Major Detractors: Analyzing Underperforming Holdings
Charter Communications experienced a stock decline following weaker-than-anticipated earnings and a greater drop in broadband subscriptions. Centene's stock fell after a significant downward revision of its 2025 earnings guidance, attributed to cost pressures in its Medicaid and Marketplace divisions. Keurig Dr Pepper's shares decreased after its acquisition of JDE Peet’s, with investors reacting to increased debt and complexity, despite the strategic logic of separating coffee and soft drink operations.
Strategic Portfolio Adjustments: New Investments and Divestitures
During the period, new positions were initiated in Adidas, a revitalized global sportswear brand; Hexagon, a provider of advanced sensor and software solutions; Dassault Systèmes, a leader in virtual twin technology; Salesforce, a front-office productivity suite provider; and Willis Towers Watson, a prominent insurance broker and HR services firm. These additions reflect a focus on well-managed companies with strong fundamentals and attractive valuations.
Positions in Aptiv, Centene, Mercedes-Benz Group, and WPP were exited to optimize the portfolio.
Future Investment Landscape: Adapting to Evolving Market Paradigms
For more than ten years, value investors observed significant outperformance by U.S. growth and momentum stocks, a trend deemed unsustainable due to weak foreign currencies and valuation expansion. Recent market shifts show a reversal of this paradigm, with improved fundamentals in European equities attracting increased investor interest. Given the substantial remaining valuation disparity, the strategy aims to continue capitalizing on these evolving market conditions.
Performance Summary: Annualized Returns Across Time Horizons
The document presents a comprehensive table detailing the average annualized total returns for the Global Strategy (both gross and net of fees), the MSCI World Index, and the MSCI World Value Index across various time periods, including quarterly, year-to-date, one-year, three-year, five-year, ten-year, and since inception figures.