Navigating the Currents: Nomura Global Growth Fund's Q1 2026 Perspective

Well, Q1 2026 certainly proved to be a quarter that kept us on our toes, didn't it? It felt like a fascinating blend of both robust opportunity and some rather intricate challenges across global markets. For us at the Nomura Global Growth Fund, it was a period where our disciplined approach to identifying truly sustainable growth drivers truly shone through. We pride ourselves on looking beyond the immediate headlines, focusing instead on those foundational shifts that promise long-term value, and this quarter really underscored the wisdom of that philosophy.

Looking back, the market narrative was, to put it mildly, a bit of a rollercoaster. We saw continued, perhaps even accelerated, enthusiasm for certain technological advancements, particularly in areas touching upon artificial intelligence and its broader infrastructure. Yet, simultaneously, there was a persistent hum of caution, largely stemming from lingering inflation concerns and the ever-present, sometimes unpredictable, geopolitical landscape. It created an environment where distinguishing genuine growth from fleeting speculation became absolutely paramount for active managers.

So, how did the fund fare amidst all this? Frankly, we were quite pleased with our performance. The Nomura Global Growth Fund delivered solid returns during Q1 2026, managing to slightly outpace our benchmark, the MSCI World Index. This wasn't achieved by chasing every hot trend, mind you. Instead, it was a testament to our conviction in high-quality businesses with strong balance sheets, innovative leadership, and clear competitive advantages. We believe in owning companies that aren't just growing, but growing smartly, capable of compounding returns even when the macroeconomic winds are shifting.

Breaking down the performance, a few areas really stood out as key contributors. Our strategic allocations to companies at the forefront of AI infrastructure, particularly in advanced semiconductor manufacturing and specialized data center solutions, certainly paid dividends. These weren't just the flashy names, but rather the essential picks and shovels behind the AI revolution. We also saw robust contributions from select innovative healthcare firms, especially those developing breakthrough therapies or diagnostic tools addressing significant unmet medical needs. And you know, a few of our long-held positions in resilient, premium consumer brands, particularly those with strong emerging market exposure, continued to demonstrate their enduring appeal.

Of course, no quarter is without its speed bumps, and Q1 2026 was no exception. A few of our positions in certain software-as-a-service companies, which had enjoyed meteoric rises in previous periods, experienced a bit of multiple compression as investors became more discerning about valuation and profitability. Similarly, some exposure to specific industrials felt the pinch of softening global demand projections, though we view these as temporary headwinds for fundamentally sound businesses. It’s always a balance, isn't it? You win some, you learn from some.

Throughout the quarter, our investment team remained incredibly active, constantly scrutinizing our holdings and identifying fresh opportunities. We strategically trimmed some positions that, despite strong performance, began to appear a touch overvalued, choosing to redeploy that capital into names we felt offered a more compelling risk-reward profile. Conversely, we added to several conviction holdings, particularly in companies poised to benefit from long-term trends like energy transition technologies and advanced materials, areas we believe are just beginning to unfold their full potential.

Looking ahead to the rest of 2026, we remain cautiously optimistic, but always with an eye on agility. The global economic landscape is still evolving, with central bank policies, geopolitical developments, and technological advancements all playing significant roles. We anticipate continued volatility, which, frankly, often creates some of the best opportunities for astute investors. Our focus remains unwavering: to identify and invest in those exceptional global companies that can deliver sustainable, compounding growth, regardless of the short-term market noise. We're committed to navigating these fascinating, sometimes turbulent, waters with a steady hand, always prioritizing the long-term prosperity of our investors.