There has been no shortage of macroeconomic and political issues for investors to contend with during 2025 and continuing into 2026. Policy uncertainty, geopolitics, inflation, monetary tightening, and rapid technological change have dominated headlines and driven market sentiment, often overwhelming company fundamentals and long-term value creation.
As we expected at the beginning of last year, the US and global economies have remained resilient. Growth has moderated but remains solid, inflation has come down meaningfully, employment has held up well, and overall economic activity continues. While uncertainty remains elevated — particularly around foreign policy, which is the area the US president can influence most directly — the broader economic backdrop remains constructive, and the underlying data continue to point to adjustment rather than deterioration.
2025 Portfolio Review
It was a strong year for our World Stars Global Equity Strategy, returning 13.7% on an absolute basis in US dollar terms. Despite this strong delivery, the strategy lagged global markets as strong performance by companies in parts of the investment universe that do not fulfil our quality criteria and the devaluation of the US dollar acted as headwinds.
During the year our investments across the broad AI value chain delivered significant performance. They were led by Amphenol, the connector and sensor leader, up +96%. The company has seen unprecedented demand in its IT& Datacom business fueled by AI investments. The company has also generated strong growth across its end markets including commercial aerospace, military and automotive reflecting its diversified business model. Amphenol is proactively redeploying this windfall to further entrench its competitive moat though multiple acquisitions broadening its end markets and deepening its product portfolio.
Our holdings in Alphabet, the parent company of Google, and advanced semiconductor player Nvidia also featured amidst our strongest performers for the year, up 66% and 39% respectively. These were complemented by ASML, the semiconductor equipment leader, up 37%, on the back of an improved order intake fueled by AI-related demand and the reshoring of the global semiconductor industry.
Our performance extended beyond the AI space. RTX, the leading aerospace and defense supplier was up 61% driven by the ongoing strength in global travel activity and the structural increase in defense spending. Leading pharmaceutical player Roche also raced ahead during the year, up 33%. Greater clarity on the pharmaceutical industry US regulatory environment and positive pipeline updates fueled the stock. This included positive clinical trial results for Giredestrant, its new breast cancer drug, as we discussed in last month’s update.
Equally encouragingly, some of our holdings in the Consumer space, which had lagged in 2024 and the earlier part of 2025, started to inflect as the year was approaching its end, with cosmetics manufacturer L’Oréal, and food and beverages goliath, Nestle both up 9%.
On the weaker side, macro and trade policy uncertainty weighed on some of holdings, including specialty chemicals manufacturer Sika, down -23%, as large global construction project activity was paused amidst this environment. Our enterprise software holdings, Salesforce and SAP, were also down -20%, as corporate customers remained similarly cautious amidst this backdrop and as they looked to assess IT budget priorities amidst the advent of AI. As we look into 2026, we believe these holdings are poised for performance as the policy environment ultimately stabilizes and the market looks for opportunities beyond the immediate AI-value chain.
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