Global Leaders Equity Fund | Q1 2025

15 April 2025

Market review

A particularly volatile March rounded out a bumpy 1Q25 for global equity markets, with the MSCI World Net Index returning -4.5% in US dollars (USD) in the month and -1.8% in the quarter (local currency returns of -5% in March and -2.7% in Q1). Political uncertainty and concerns over a slowing United States (US) economy defined market sentiment, although interestingly, the fall in equity markets so far appears to be largely down to the high-profile Artificial Intelligence (AI) plays – the Magnificent Seven (Mag 7) – rather than widespread deterioration in other sectors. The IT and Consumer Discretionary sectors were down -9% and -8% respectively in the month and double digits in Q1 (-12% and -10% respectively), mainly due to NVIDIA, Apple, and Tesla which saw several hundred billion wiped off their market capitalisations. The other Mag 7-exposed sector, Communication Services, delivered -7% in March and a slightly less severe -4% in Q1, held back by Alphabet.

Outside of these Mag 7 exposed sectors underperforming, there was little differentiation between defensive and cyclical sectors with all other sectors delivering positive returns. Energy and Utilities led in the month (+5% and +3% respectively) and quarter (+10% and 7% respectively), while Consumer Staples, Health Care, and Financials were also ahead of the overall index in March and delivered positive quarterly returns (+5-6%).

Turning to geographies, the chaotic rollout of Trump’s protectionist policies saw the greenback weaken against international currencies, with the U.S. the only major market to lag the MSCI World in March (-6%) and Q1 (-5%), in USD terms. Major markets in continental Europe were strong, outperforming the overall index in the month and delivering double-digit dollar returns in Q1 (+6, -12% local). Performance in Asia was more mixed: for Q1 overall, Singapore (+10% USD, 8% local) and Hong Kong (+4%, +5%) held up well despite tariff fears, while the appreciation of the yen saw weaker performance by Japan (0%, -5%).

Portfolio review

In March, the portfolio returned -1.92%, ahead of the MSCI World Net Index which returned
-4.45%. For the first quarter (1Q25) overall, the Portfolio’s focus on earnings resilience and capital preservation shone through, with the portfolio delivering a positive absolute return of +3.22%, while the MSCI World delivered a negative absolute return, falling -1.79%. As a reminder, we expect the portfolio to deliver an asymmetric performance profile over the long term, offering attractive absolute long-term returns with reduced downside participation during challenging market environments.

Source: Morgan Stanley Investment Management. Data as of March 31, 2025.

Disclaimer:

Waystone Management Company (Lux) S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF) (ref A00000395 & S00000734), Waystone Management Company (Lux) S.A. is acompany located in Luxembourg, L-1273 Luxembourg at 19, Rue de Bitbourg. This document is Issued by Ashburton Fund Managers (Pty) Limited (The Investment Manager) (Reg number 2002/013187/07), which has its registered office at 3 Merchant Place, 1 Fredman Drive, Sandton, 2196, South Africa and is an authorised financial services provider (FSP number 40169), registered with the Financial Sector Conduct Authority (FSCA). The funds are authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF). The fund does not distribute; it accumulates. In South Africa, the Fund(s) is/are approved for promotion under section 65 of the Collective Investment Schemes Control Act 2002. The Fund Prospectus, and further information including pricing and changes, may be viewed at the Fund’s representative office in South Africa: Ashburton Management Company (RF) Proprietary Limited (“Ashburton CIS”), of the same address. Ashburton CIS is an approved collective investment schemes manager regulated by the Financial Sector Conduct Authority and a full member of the Association of Saving and Investments South Africa. In the event a potential investor requires material risks disclosures for the foreign securities included in a portfolio, the manager will upon request provide such potential investor with a document, outlining potential constraints on liquidity & repatriation of funds; Macroeconomics risk; Political risk; Foreign Exchange risk; Tax risk; Settlement risk; and Potential limitations on the availability of market information. The value of participatory interests and the income from them may go down as well as up and is not guaranteed. Past performance is not necessarily a guide to the future performance. Where an investment involves exposure to a currency other than that in which it is denominated, changes in rates of exchange may cause the value of the investment to go up or down. CIS portfolios are traded at ruling prices and can engage in borrowing and scrip lending. A full detailed schedule of fees, charges and commissions is available from Ashburton on request and incentives may be paid and if so, would be included in the overall costs. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The manager has a right to close the portfolio to new investors in order to manage the portfolio more efficiently in accordance with its mandate. This document does not constitute an offer or solicitation to any person in any jurisdiction in which Ashburton Fund Managers (Pty) Limited is not authorised or permitted to communicate with potential investors, or to anyone who would be an unlawful recipient. The original recipient is solely responsible for any actions in further distribution of this document and should be satisfied in doing so that there is no breach of local legislation or regulations. This is a marketing communication. The Management company has the right to terminate the arrangements made for Marketing. Additional information about this product, including brochures, prices, application forms, Prospectus, KIID and annual or half-yearly reports, can be obtained from the Manager, free of charge, and from the website: www.ashburtoninvestments.com