The fourth quarter of 2025 was marked by a relatively calm market environment compared with the volatility experienced in the first half of the year. During this period, investors shifted their primary focus toward interest rate prospects and labour market conditions. While the period was relatively stable, the “AI bubble” debate, which intensified in early November, remained a central point of contention for market participants.

Market sentiment continued to be underpinned by generally strong fourth-quarter corporate results. More specifically, the fundamental performance of the companies within our portfolio was exceptionally robust. We maintain a long-duration view on our investments, focusing on durable secular growth trends over short-term market narratives.

As of the end of 2025, the fund delivered a return of 23.99%. We are pleased that our portfolio has outperformed most major indices and we would like to thank our clients who have continued to support us thus far. We would never have achieved this without your unwavering support this year, particularly during the more volatile first half of the year.

Our core holdings remain anchored in the durable trends of the datacentre economy and AI. Our top performance contributors were in the semiconductors sector, specifically Micron, TSMC, and NVIDIA. Additionally, our cybersecurity companies, as well as Alphabet and Constellation Energy, also performed exceptionally well.

While top-line performance was strong, certain pockets of the market did face some headwinds. Healthcare remained a drag throughout 2025, and the broader software sector was challenged, with cybersecurity being the exception. However, we remain positive on the long-term prospects of these businesses and have tactically added to these positions during the quarter. We believe the narrative around “the death of software” is overblown; these companies are well positioned to leverage AI.

Some notable changes in the portfolio this quarter are as follows. Anticipating a need for capital raises, we exited our position in Moderna. Conversely, we consolidated our position in BioNTech, which we view as one of the most well-funded and undervalued biotechnology companies today. We also opportunistically increased our exposure in Zscaler, ServiceNow, and Datadog. Finally, we started a new position in Marvell Technology, as we think it is unjustifiably underrated relative to its growth potential.

We remain mindful of the ongoing debate on an AI bubble and recognized its sway over markets.  These debates are cautionary reminders that markets occasionally slip into irrational exuberance. For the moment, we are convinced the stocks we own are not irrationally priced, though we do not rule out the possibility of prices and valuations reaching extremes in the months ahead.  In the current environment we will do well to remember Howard Marks’ pointed axiom that “being too far ahead of your time is indistinguishable from being wrong.”

Looking ahead to 2026, our portfolio is positioned to benefit from a triumvirate of tailwinds: potential Fed rate cuts, fiscal thrust from the One Big Beautiful Bill, and sustained datacentre capex spending.

We wish you a great and prosperous Happy New Year 2026!

Jan 2026