Evenlode Global Opportunities underperformed the MSCI World Index in September. It was a difficult month for most of the market: the US Federal Reserve raised interest rates for the first time since 2023, oil prices spiked on renewed Middle East tensions, and global bond yields moved higher. Beneath the index's modest gain, returns were unusually narrow. Meta led the market higher, alongside a concentrated group of CPU/semiconductor names, while the vast majority of the market struggled. Nearly 80% of S&P 500 constituents declined during the month, leaving the equal-weighted index down by mid-single-digit percentage. The fund's lack of exposure to semiconductors and technology hardware accounted for around a quarter of the shortfall.
Our largest detractors were the data and digital services companies, most notably those serving the consumer directly. Meta's launch of Muse, an AI agent that acts on a user's behalf, prompted a sell-off in businesses perceived to rely on consumer habit. The New York Times fell on fears that subscribers could cancel more easily, while Booking Holdings and Amadeus fell on concerns that agents could bypass travel platforms. Muse also revived wider AI concerns, and data and information services companies, including Experian, Verisk, LSEG and RELX, gave back some of their summer gains. We believe the market has again misjudged the threat. While agents are able to act for the user, the quality of their actions remains dependent on the third-party data they have access to. As such, they are far better served partnering with incumbents, such as The New York Times for journalism or Booking's for travel listings, pricing and availability. This logic implies that agents are primarily another channel for distribution rather than pure play competitors.
Elsewhere, AbbVie, Johnson & Johnson, GTT and SGS made positive contributions, as did Walt Disney, in which we initiated a small position this month. Disney's evergreen franchises, including Frozen, Star Wars and Toy Story, power a content flywheel: each new film or series captures attention that is then monetised across streaming and, above all, parks and merchandise. International content and an ad-supported tier should draw new subscribers into the ecosystem, and we expect the company to continue to post double-digit earnings growth.
The fund remained ahead of the index over the third quarter despite a disappointing month. The portfolio trades on an attractive forward free cash flow yield of 5.9%, and the October results season offers the next opportunity for fundamentals to reassert themselves. We remain confident that patient ownership of high-quality, cash-generative businesses will be rewarded in the long term.
Evenlode Global Opportunities underperformed the MSCI World Index in September. It was a difficult month for most of the market: the US Federal Reserve raised interest rates for the first time since 2023, oil prices spiked on renewed Middle East tensions, and global bond yields moved higher. Beneath the index's modest gain, returns were unusually narrow. Meta led the market higher, alongside a concentrated group of CPU/semiconductor names, while the vast majority of the market struggled. Nearly 80% of S&P 500 constituents declined during the month, leaving the equal-weighted index down by mid-single-digit percentage. The fund's lack of exposure to semiconductors and technology hardware accounted for around a quarter of the shortfall.
Our largest detractors were the data and digital services companies, most notably those serving the consumer directly. Meta's launch of Muse, an AI agent that acts on a user's behalf, prompted a sell-off in businesses perceived to rely on consumer habit. The New York Times fell on fears that subscribers could cancel more easily, while Booking Holdings and Amadeus fell on concerns that agents could bypass travel platforms. Muse also revived wider AI concerns, and data and information services companies, including Experian, Verisk, LSEG and RELX, gave back some of their summer gains. We believe the market has again misjudged the threat. While agents are able to act for the user, the quality of their actions remains dependent on the third-party data they have access to. As such, they are far better served partnering with incumbents, such as The New York Times for journalism or Booking's for travel listings, pricing and availability. This logic implies that agents are primarily another channel for distribution rather than pure play competitors.
Elsewhere, AbbVie, Johnson & Johnson, GTT and SGS made positive contributions, as did Walt Disney, in which we initiated a small position this month. Disney's evergreen franchises, including Frozen, Star Wars and Toy Story, power a content flywheel: each new film or series captures attention that is then monetised across streaming and, above all, parks and merchandise. International content and an ad-supported tier should draw new subscribers into the ecosystem, and we expect the company to continue to post double-digit earnings growth.
The fund remained ahead of the index over the third quarter despite a disappointing month. The portfolio trades on an attractive forward free cash flow yield of 5.9%, and the October results season offers the next opportunity for fundamentals to reassert themselves. We remain confident that patient ownership of high-quality, cash-generative businesses will be rewarded in the long term.