Finally a change in leadership

The start of 2025 began as expected with the inauguration of Donald Trump. Less expected was a sudden selloff of AI-related sectors late in January, after a Chinese startup called DeepSeek released a supposedly impressive and cost-efficient large language model. This fuelled uncertainty about competition, investment and pricing, and raised questions about what was implied in many valuations.

What stood out for the Global Income and Growth (GIG) fund was away from the spotlight - the strong share performances coming from outside of the mega-cap U.S. companies, particularly in Europe. This supported a 7% return for the month vs the peer group’s 5%. January gave a hint of how we expect GIG to behave when a crowded market breaks down, just as was the case when the market broadened out after the pandemic in 2021-22.

Positives: Cement and aggregate companies (Heidelberg Materials (+15.3%), Buzzi (+12.9%)), banks (UBS (+17.4%), National Bank of Greece (+10.9%)) and Roche (+12.8%). Not owning Nvidia, Apple, Broadcom or Comcast also contributed to the fund’s outperformance

 

Negatives: Dell (-9.1%), Rockwell (-1.9%), Marubeni (-0.8%) Glencore (-0.9%) and Smurfit Westrock (-0.2%). There were no new positions and no exits.

 

Away from the news...

At the end of the month Bettina went on a site visit with Fuchs and Evonik in Germany. She had a chemical lesson in viscosity and got an insight into speciality lubricants from both companies. It was a great opportunity to learn about R&D and new applications while meeting divisional management.

The reassuring message from both Fuchs and Evonik was that in the medium to long term any volume decline from a switch from ICE cars to EVs will be more than offset by industrial applications like wind farms, aerospace, medical applications, data centers etc. The new applications also tend to be higher quality and higher margin products.

 

KEY RISKS

The value of investments and any income generated may go down as well as up in response to general market conditions and the performance of the assets held, and is not guaranteed. An investor may not get back the amount originally invested.

Past performance is not a reliable guide to future results.

Changes in exchange rates may have an adverse effect on the value, price or income of investments.

There is no guarantee that the Fund will meet its stated objectives.

There is a risk that any company providing services such as safe keeping of assets or acting as counterparty to derivatives may become insolvent, which may cause losses to the Fund.

 

For professional investors only.

Capital at risk.

 

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