The Evenlode Global Opportunities fund returned +3.7% in May 2025 versus its comparator benchmark index the MSCI World Index which returned +5.9% (USD terms), as global equity markets continued their roaring recovery from the 8 April lows made after the US administration’s announcement of broad tariffs. The world is waiting to know what the new normal will look like, and it seems likely that the deadlines will continue moving backwards. Contrary to the old adage, however, this market seems to like uncertainty. May’s market shape was a replay of 2024, with narrow performance driven by a handful of names with AI connections, as idiosyncratic earnings potential is being revalued upwards as broad expectations for 2025 earnings go down. Fundamental company and macroeconomic data remain reasonably solid, although we think this partly reflects a common assumption that all tariffs are transitory and hence no accommodation needs to be made for a higher-tariff world.
Our positioning remains balanced. We think broad earnings will probably hold up, but it is unlikely that we have a full repetition of the roaring AI bull market of 2023-2024, essentially because hyperscaler[1] capex growth is poised to slow materially in 2026 after two very strong years. It’s unlikely that these numbers will creep up dramatically as 2025 goes by so long as monetisation of generative AI in the enterprise continues to lag expectations. On balance, the continued daily drama of trade news is probably unhelpful overall for household and enterprise spending, investment, and planning, so this will probably hamper earnings growth for equities as a whole. The slate of legislation being proposed by the administration is likely to hit lower-end consumers disproportionately hard, which would extend their weak run which started back in 2023.
When we lower our eyes from the Olympian heights of geopolitical tactics and look at the fundamentals of our portfolio, we feel more optimistic and grounded. As the CEO of one portfolio company said to us after a brief review of all the big-picture headaches their company faced, ultimately their job is to create something special for their customers. Given the high gross margins, low leverage, and robust cashflow conversion of companies within our portfolio, they are well set up to keep building their competitive advantages with innovative new products which only they could develop and offer. We continue to look forward to the year ahead and remain grateful for the continued support and trust of our investors.
[1]Large cloud service providers (e.g. Amazon, Microsoft, Google, Meta)
The Evenlode Global Opportunities fund returned +3.7% in May 2025 versus its comparator benchmark index the MSCI World Index which returned +5.9% (USD terms), as global equity markets continued their roaring recovery from the 8 April lows made after the US administration’s announcement of broad tariffs. The world is waiting to know what the new normal will look like, and it seems likely that the deadlines will continue moving backwards. Contrary to the old adage, however, this market seems to like uncertainty. May’s market shape was a replay of 2024, with narrow performance driven by a handful of names with AI connections, as idiosyncratic earnings potential is being revalued upwards as broad expectations for 2025 earnings go down. Fundamental company and macroeconomic data remain reasonably solid, although we think this partly reflects a common assumption that all tariffs are transitory and hence no accommodation needs to be made for a higher-tariff world.
Our positioning remains balanced. We think broad earnings will probably hold up, but it is unlikely that we have a full repetition of the roaring AI bull market of 2023-2024, essentially because hyperscaler[1] capex growth is poised to slow materially in 2026 after two very strong years. It’s unlikely that these numbers will creep up dramatically as 2025 goes by so long as monetisation of generative AI in the enterprise continues to lag expectations. On balance, the continued daily drama of trade news is probably unhelpful overall for household and enterprise spending, investment, and planning, so this will probably hamper earnings growth for equities as a whole. The slate of legislation being proposed by the administration is likely to hit lower-end consumers disproportionately hard, which would extend their weak run which started back in 2023.
When we lower our eyes from the Olympian heights of geopolitical tactics and look at the fundamentals of our portfolio, we feel more optimistic and grounded. As the CEO of one portfolio company said to us after a brief review of all the big-picture headaches their company faced, ultimately their job is to create something special for their customers. Given the high gross margins, low leverage, and robust cashflow conversion of companies within our portfolio, they are well set up to keep building their competitive advantages with innovative new products which only they could develop and offer. We continue to look forward to the year ahead and remain grateful for the continued support and trust of our investors.
[1]Large cloud service providers (e.g. Amazon, Microsoft, Google, Meta)