Key takeaways

  • The start to 2026 has been marked by shifting market narratives, including takeover activity, AI-driven volatility and geopolitical developments.
  • Corporate activity, such as the BlueScope bid, highlights the importance of valuation discipline and assessing opportunities relative to intrinsic value.
  • Market reactions to AI disruption concerns have created opportunities in quality technology businesses such as Xero and Carsales, where competitive advantages may be underestimated.
  • Portfolio positioning has benefited from exposure to energy-related companies during periods of rising oil and fuel prices.
  • The investment process remains focused on quality businesses with strong balance sheets, durable competitive advantages and attractive valuations.
  • The fund maintains an underweight position to Australian banks, reflecting elevated valuations and potential risks to credit quality in a more uncertain environment.