October Report

Global equity markets moved higher in October, supported by broad strength across many regions but with leadership again centred in Technology. Semiconductor and hardware companies continued to benefit from sustained investment in artificial intelligence and expanding data-centre infrastructure, which remained key drivers of sentiment throughout the month.

Emerging Markets outperformed, helped by strong gains from leading South Korean technology firms as demand for memory and logic components improved. Japan also advanced after political developments increased expectations for fiscal support and a more accommodative monetary policy stance. The United States recorded another month of solid progress, extending its run of positive performance through 2025.

More defensive, income-oriented areas such as Consumer Staples and Real Estate eased after the US Federal Reserve reduced interest rates late in the month. The shift in monetary policy encouraged investors to rotate away from bond-proxy sectors and toward companies positioned to benefit from longer-term structural growth themes.

Overall, the global backdrop remained constructive, with easing inflation, gradually improving demand conditions and supportive policy settings contributing to a generally favourable environment for equities.

Portfolio Commentary

PIA delivered a 2.3% return in October, a strong absolute outcome in a month where global markets continued to rise, although the Portfolio did lag the benchmark’s 3.3% gain. The Portfolio remains well exposed to many of the long-term growth themes shaping global equities, including artificial intelligence and the broader buildout of digital infrastructure.

Market leadership in October was concentrated in a small group of semiconductor companies that continued to benefit from strong demand across AI-related technologies. The Portfolio holds several high-quality businesses participating in these trends, while maintaining a disciplined approach to valuation to ensure that exposures remain balanced and aligned with long-term fundamentals.

Within Communication Services, Alphabet contributed positively after reporting strong earnings across its major business lines, supported by continued growth in cloud services. Management also indicated that investment in technology capabilities will rise next year to support long-term demand.

Meta Platforms also reported solid revenue growth, although its share price eased as margins narrowed following higher investment in AI initiatives. These spending decisions reflect the company’s continued focus on strengthening its long-term technology platform.

During the month, the Portfolio initiated a new position in Fabrinet, a Thailand-based manufacturer that produces high-precision optical components used in fibre-optic networks. The company has built a strong competitive position through its technical expertise and efficient manufacturing base. Fabrinet has delivered consistent growth as global demand for cloud computing, video streaming and AI-related data transmission has expanded. The team believes these long-term trends will continue to support the company’s development as it invests in additional capacity and strengthens its operational capabilities.

Performance across other holdings was mixed. In Financials, Progressive, a leading US auto insurer, detracted after recording slower policy growth and a regulatory charge linked to policyholder refunds in Florida. In Communication Services, Netflix softened after quarterly results met expectations but fell short of investor hopes, while Tencent, the China-based gaming and social media company, declined amid renewed tariff tensions. By contrast, Fabrinet added to its results within Information Technology.

The Portfolio remains focused on owning high-quality global businesses with strong balance sheets and durable competitive advantages. The team continues to follow a disciplined, long-term investment approach designed to deliver resilient outcomes through a variety of market conditions.