The Evenlode Global Opportunities fund returned -2.1% in September 2025 while its comparator benchmark index the MSCI World Index returned +3.2%. This brings the cumulative return for the calendar year to date to +6.2% vs the MSCI World return of +17.4% ( USD terms). We are clearly frustrated and disappointed with this underperformance, but also recognise that this is in the teeth of a historic market rally dominated by a handful of cyclical sectors. The portfolio’s financial fundamentals and growth rate remain healthy and superior to the index, and the valuation on conventional metrics is now markedly more attractive than that of the index.
Since April we have seen a dramatic narrowing of market focus in a small cohort of sectors. In the six months to 30 September, three sub-sectors (Semiconductors, Capital Goods, and Banks) plus three companies (Oracle, Palantir, Tesla) which account in total for a quarter of average MSCI World Index weight represented 87% of total index returns. We think this is a concentrated, one-way bet on a still unclear technology outcome and we don’t believe we have all the tools to assess accurately beforehand where the value will accrue in the artificial intelligence (AI) hardware cycle. We also think this is true of most other investors in the market. Cashflow has dramatically weakened in important technology cycle names this year, which cranks up the risk of the investment.
The last two months have been particularly painful for consumer staples and information services. Consumer staples continue to suffer as the median consumer globally has struggled in the aftermath of the great inflation surge of 2022-2023. A recent large consumer conference may have been a catalyst for a further wave of earnings downgrades as hopes of a recovery were pushed out. The underlying dynamics of core staples categories remain solid in terms of gross margin, private label share, and consumer loyalty. We have written at length elsewhere on information services, but in short we think the market is repeating its mistake with Alphabet earlier this year of prematurely putting companies into ‘AI loser’ buckets on minimal evidence.
Our portfolio retains both its growth characteristics, continuing to grow revenue and earnings faster than the MSCI World Index, as well as its defensiveness in terms of lower leverage, higher cash conversion, and mix to recurring revenue. Looking ahead, conversations with clients of these companies suggest sustained engagement with their products. While our flavour of the market is clearly not in fashion at the moment, its characteristics remain long-term winners in our view.
The Evenlode Global Opportunities fund returned -2.1% in September 2025 while its comparator benchmark index the MSCI World Index returned +3.2%. This brings the cumulative return for the calendar year to date to +6.2% vs the MSCI World return of +17.4% ( USD terms). We are clearly frustrated and disappointed with this underperformance, but also recognise that this is in the teeth of a historic market rally dominated by a handful of cyclical sectors. The portfolio’s financial fundamentals and growth rate remain healthy and superior to the index, and the valuation on conventional metrics is now markedly more attractive than that of the index.
Since April we have seen a dramatic narrowing of market focus in a small cohort of sectors. In the six months to 30 September, three sub-sectors (Semiconductors, Capital Goods, and Banks) plus three companies (Oracle, Palantir, Tesla) which account in total for a quarter of average MSCI World Index weight represented 87% of total index returns. We think this is a concentrated, one-way bet on a still unclear technology outcome and we don’t believe we have all the tools to assess accurately beforehand where the value will accrue in the artificial intelligence (AI) hardware cycle. We also think this is true of most other investors in the market. Cashflow has dramatically weakened in important technology cycle names this year, which cranks up the risk of the investment.
The last two months have been particularly painful for consumer staples and information services. Consumer staples continue to suffer as the median consumer globally has struggled in the aftermath of the great inflation surge of 2022-2023. A recent large consumer conference may have been a catalyst for a further wave of earnings downgrades as hopes of a recovery were pushed out. The underlying dynamics of core staples categories remain solid in terms of gross margin, private label share, and consumer loyalty. We have written at length elsewhere on information services, but in short we think the market is repeating its mistake with Alphabet earlier this year of prematurely putting companies into ‘AI loser’ buckets on minimal evidence.
Our portfolio retains both its growth characteristics, continuing to grow revenue and earnings faster than the MSCI World Index, as well as its defensiveness in terms of lower leverage, higher cash conversion, and mix to recurring revenue. Looking ahead, conversations with clients of these companies suggest sustained engagement with their products. While our flavour of the market is clearly not in fashion at the moment, its characteristics remain long-term winners in our view.