Fairtree Global Equity Fund Q3 2025 Commentary

03 November 2025, 13:09 Cornelius Zeeman

min read Guides

The fund returned 8.88% for the quarter, outperforming the benchmark by 1.26%. Both developed and emerging markets delivered substantial returns with the MSCI ACWI Index rising 7.6%, with the biggest gainers being China and Canada, increasing 20.7% and 9.7% respectively. The MSCI Emerging Markets Index increased 10.6% driven by gains in China and South Africa, increasing 20.7% and 20.4%, while India fell 7.6% (all in USD).

US equities rose 8% for the quarter and 3.6% in September, marking the fifth consecutive monthly gain following a strong rebound from earlier tariff-related volatility. Continued strength in mega cap technology and AI related stocks, particularly in the semiconductor sector, a softer US Dollar and a revision to US GDP numbers showing the economy expanded at an annual rate of 3.8% in the second quarter, supported sentiment. Headline CPI remained firm at 2.9% year on year, and the unemployment rate edged up to approximately 4.3%, signalling a gradual softening in the labour market. In response, the Federal Reserve delivered a 25bp rate cut, lowering the target range to 4.00% – 4.25% and marking the start of a more accommodative policy stance. The move was interpreted as confidence that inflation was easing without undermining growth. In Europe, equities advanced 3.6%, with the Netherlands leading the region with a strong 9.6% gain. European equity markets held up well, supported by positive global sentiment and stable domestic conditions. Eurozone Q2 GDP grew just 0.1% quarter-on-quarter, with contractions in Germany and Italy, and only modest growth in France and Spain. The unemployment rate held steady at 6.3%, and the European Central Bank opted to pause rate cuts during the quarter, keeping rates at 2% after 8 consecutive reductions. Euro area inflation ticked up to 2.2% year-on-year, with core inflation steady at 2.3%. The softer US dollar and lower global yields further supported capital flows into European equities.

Emerging markets extended their strong rally in the third quarter, advancing 10.6%. The outperformance was driven by a weaker US dollar and renewed optimism around country-specific catalysts, including political shifts, a greater focus on shareholder returns, and signs of a monetary policy turning point across several key economies. China rose 20.7%, extending its rally on continued policy support, particularly targeted at the technology and property sectors, and optimism surrounding AI-linked industries. The government’s ongoing push to expand domestic chip production by 2026 and maintain the US – China trade truce further bolstered investor confidence and lifted export-driven and tech-related equities. South African equities surged 20.4% for the quarter, where PGM and gold miners led gains. The rally was driven by firmer commodity prices and a weaker US dollar. Thailand surged 17.5%, driven by strong investor sentiment, declining inflation and favourable macro tailwinds.

On a sector level, Information Technology, Communication Services and Consumer Discretionary sectors were the best performing sectors over the quarter. The fund’s underweight holding in Information Technology detracted from relative performance, while the overweight in Consumer Discretionary added to relative performance. Stock picking in the Communication Services and Materials sectors added to relative performance, while stock picking in the Financial sector detracted from relative performance.

Notable portfolio actions during September included initiating new positions in Wolters Kluwer, while the existing holdings in Berkshire Hathaway, Coca-Cola, Amazon, Zoetis and Visa were topped up. Exposure to Alphabet, Alibaba, JD.com, Evolution and Samsung were trimmed following strong share price performances, while the position in Reinet, Oracle and DR Horton were exited. Notable contributors to fund performance were positions in Alphabet (+161bps absolute and +77bps relative), Apple (+62bps absolute and -25bps relative) and Alibaba (+52bps absolute and +35bps relative). Notable detractors from performance over the quarter came from Centene (-20bps absolute and relative), Crocs (-19bps absolute and relative) and Fiserv Inc (-18bps absolute and -15bps relative).

The fund is positioned with an underweight in cyclical names, in favour of EM technology exposure and slightly underweight on DM technology exposure. The fund has also reduced its underweight to defensive names. From a geographical perspective, the fund remains underweight the US and Canada, while being overweight Kazakhstan and China.

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Disclaimer

Fairtree Asset Management (Pty) Ltd is an authorised financial services provider (FSP 25917). Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments.

The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. Performance has been calculated using net NAV to NAV numbers with income reinvested. The performance for each period shown reflects the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full performance calculations are available from the manager on request. There is no guarantee in respect of capital or returns in a portfolio. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information such as fund prices, fees, brochures, minimum disclosure documents and application forms please go to www.fairtree.com.

Highest rolling one-year return 29.59% (Benchmark: 34.17%) and lowest rolling one-year return -17.19% (Benchmark: -18.73%) (information as at 30 September 2025). The Fund has returned an annualised return of 11.37% since inception (September 2021) (benchmark annualised return of 11.50% since inception). The Fund’s annualised performance over one-year is 14.79% (Benchmark: 17.27%). Fund returns disclosed are annualised returns net of investment management fees and performance fees. Annualised return is weighted average compound growth rate over the period measured. Fund investment risk indicator level: aggressive. Full performance calculations are available from the manager on request. Annualised performance: Annualised performance shows longer term performance rescaled to a 1-year period. Annualised performance is the average return per year over the period. Actual annual figures are available to the investor on request. Highest & Lowest return: The highest and lowest returns for any 1 year over the period since inception have been shown. NAV: The net asset value represents the assets of a Fund less its liabilities.

This document is confidential and issued for the information of the addressee and clients of Fairtree Asset Management only. It is subject to copyright and may not be reproduced in whole or in part without the written permission of Fairtree Asset Management. The information, opinions and recommendations contained herein are and must be construed solely as statements of opinion and not statements of fact. No warranty expressed or implied, as to the accuracy, timeliness, completeness, fitness for any particular purpose of any such recommendation or information is given or made by the Manager in any form or manner whatsoever. Each recommendation or opinion must be weighed solely as one factor in any investment or other decision made by or on behalf of any user of the information contained herein, and such user must accordingly make its own study and evaluation of each strategy/security that it may consider purchasing, holding or selling and should appoint its own investment or financial or other advisers to assist the user in reaching any decision. The Manager will accept no responsibility of whatsoever nature in respect of the use of any statement, opinion, recommendation, or information contained in this document. This document is for information purposes only and does not constitute advice or a solicitation for funds.

The Fairtree Global Equity Fund is registered and approved under section 65 of CISCA.

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