Navigating Turbulent Waters: First Eagle US Value Fund's Resilient Q2 2025 Commentary

The second quarter of 2025 proved to be another period of dynamic shifts and persistent challenges in global financial markets. As investors grappled with an intricate mosaic of economic signals, the First Eagle US Value Fund remained steadfast in its commitment to a time-honored philosophy: value investing with an unyielding focus on capital preservation.

This commentary offers a look into our strategic navigation through these complex currents, highlighting the rationale behind our portfolio positioning and our outlook for the road ahead.

A primary driver of market sentiment throughout Q2 was the continued tug-of-war between inflationary pressures and central bank resolve.

While some indicators hinted at a gradual easing of inflation, its stubborn persistence kept policymakers on a hawkish trajectory, leading to elevated interest rates that tested the resilience of various economic sectors. Compounding this domestic complexity were lingering geopolitical tensions, which cast a shadow of uncertainty over global supply chains and commodity markets, reminding us of the interconnectedness of our world.

In this environment, the First Eagle US Value Fund maintained its disciplined approach, prioritizing intrinsic value over fleeting market trends.

Our performance reflects a deliberate strategy to invest in businesses we believe are trading below their true worth, possessing robust balance sheets, strong free cash flow generation capabilities, and management teams with proven track records. This dedication to fundamental quality, particularly in volatile periods, is designed to provide a measure of resilience, cushioning portfolios against the sharper downturns often experienced by more speculative investments.

Our portfolio continued to reflect a carefully curated collection of companies spanning diverse industries, selected for their pricing power, sustainable competitive advantages, and ability to thrive across varying economic cycles.

We meticulously avoid overconcentration in areas susceptible to rapid market swings, instead favoring businesses that demonstrate a consistent ability to compound value over the long term. This diversification is not merely a hedge; it’s a proactive stance to capture opportunities wherever true value emerges, while simultaneously mitigating sector-specific risks.

Looking forward, our outlook remains one of cautious optimism, underscored by a readiness to capitalize on market dislocations.

We anticipate that the interplay of inflation, interest rate policy, and geopolitical developments will continue to generate volatility. However, it is precisely in such periods of uncertainty that diligent, long-term value investors often find their most compelling opportunities. Our strategy is built to identify and acquire high-quality assets at attractive prices, positioning the Fund to potentially benefit as market sentiment eventually realigns with fundamental value.

The core tenets of First Eagle's investment philosophy — a deep-seated commitment to value, an unwavering emphasis on downside protection, and the patience to weather short-term fluctuations — remain our guiding principles.

We believe that by focusing on businesses with enduring value and sound financial footing, we are best positioned to navigate the challenges and seize the opportunities that future markets will undoubtedly present. Our commitment to our shareholders is to continue applying this disciplined approach, aiming to preserve and grow capital effectively in all market environments.