The Fund trailed global markets, though Alphabet, Cadence and Advantest delivered strong AI-linked gains. Additions to ServiceTitan and Zscaler enhanced efficiency and digital security exposure, while long-term healthcare positioning remains a key conviction.
Simon [00:00:11] The SF Global Growth Fund rose 3.6% over the third quarter, which was behind the MSCI World, which rose 9.2%, and the IA sector peer group average, which rose 7.2%.
Simon [00:00:26] Looking in more detail at the equity portfolio, top performers within the Fund included Alphabet, Cadence Design Systems, and Advantest. Advantest shares gained after raising its full year operating profit forecast by 24% for the year, reflecting strong demand for semiconductor testing equipment used in AI applications. Advantest has about 60% share of the overall testing market in which they operate, but they own close to 100% for more sophisticated chips such as GPUs used in AI.
Simon [00:01:10] London Stock Exchange Group and Morningstar were among the detractors, facing investor concern that their business models could face disruption from advances in AI. We believe these are overstated, but are paying close attention to the moats these businesses have beyond purely providing data and information for their customers.
Simon [00:01:36] We added Service Titan over the quarter. This company provides a software platform designed for tradespeople such as plumbers and electricians, helping them operate more efficiently, scale faster, and build resilience.
Simon [00:01:55] We also added Zscaler, a new position in our 'Enhancing Digital Security' theme. As hybrid working becomes more commonplace, and more and more information and data has moved to the cloud, the attack area which hackers can target our devices has become broader and more difficult to protect. This has created the need for the next evolution in cybersecurity, which is a more sophisticated approach to how each person can access a company's network. Zscaler is the global leader in this evolution and continues to grow its market share in the security space.
Simon [00:02:37] One theme we are particularly exposed to longer term and continue to build within the Fund is healthcare. This is an area that's performed poorly over the last couple of years after strong performance during the pandemic. We are heavily invested in areas such as life sciences with names such as Thermo Fisher and Agilent Technologies. These companies provide the technology used by customers in the biotechnology and pharmaceutical industries to find solutions to unmet medical needs such as the vaccine which was so rapidly deployed during the COVID pandemic. We believe that the healthcare industry has much further to go in terms of finding medical solutions to disease, particularly in areas such as cancer, autoimmune disease, rare disease, and neurological diseases such as Parkinsons and Alzheimers. We believe the investment the industry will make to solve these diseases will drive performance for these companies despite the recent weak stock market performance.
Simon [00:03:59] Our asset allocation positioning remained unchanged over the quarter. We maintained overweight positions in both global and UK equities, and underweight positions in cash and government bonds. We remain neutral on UK and European corporate bonds. We believe broader global economic activity is nearing an inflection point despite sluggish growth. Outside sectors benefiting from the ongoing AI infrastructure buildout. Equity markets have also been supported by interest rate cuts implemented during 2025. While credit remains fundamentally attractive, concerns about the impact of fiscal pressures in the UK on gilt yields leads us to retain a neutral stance on credit and an underweight positioning in gilts.
Simon [00:05:00] The GFSF Global Growth Fund rose 1.4% over the quarter in US dollars, which was below the MSCI World, which delivered 7.3%, and the peer group average was delivered 4.4% over the same period.
KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
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