For the month ended 31 August 2026, the Company's NAV returned 1.6%, marginally outperforming the Russell 1000 Value Index which returned 1.3% net of fees. US equities were initially supported by largely in-line inflation data, which helped reinforce expectations that the Federal Reserve could hold rates steady. But later in the month, hotter inflation data and Fed Chair Kevin Warsh's Jackson Hole remarks pushed investors to price in a higher probability of renewed rate hikes, lifting yields and weighing on more rate-sensitive parts of the market. Technology sentiment remained supported by strong AI infrastructure earnings and continued spending on data centres, cloud capacity, AI servers, semiconductors, and optical networking. Commodity markets were once again in focus. Refining margins were supported by Middle East supply disruption and tighter global fuel markets, while copper prices rallied sharply on supply constraints, lower inventories, and uncertainty around potential US copper-import tariffs. Positions in the energy sector were the top contributors to relative performance, as overweights in oil and gas contracting services and oil and gas equipment benefited from higher energy prices. There were also gains coming from holdings in the materials sector across aluminium, steel and precious metals, where overweight allocations captured price appreciation amid supply constraints and 'debasement' concerns around US government debt levels. Positioning within health care was less successful thanks to a large rally on the back of clinical trial results for a biotech that the portfolio was underweight. In terms of signals, sentiment insights worked best, while top down macro signals struggled somewhat. Sentiment signals that use Large Language Models to detect themes mentioned in macro and strategy research published by brokers worked well, capturing the rebound in many software firms after previous underperformance driven by fears that AI was a threat to their businesses. On the negative side, industry timing insights were wrong-footed by weakness across the apparel sectors on the back of concerns around consumer spending, inventories, tariffs, and some disappointing earnings releases.
