January Report

• The Fund declined 0.1% in January, outperforming the benchmark, which fell 0.3%, as positive stock selection offset the stronger Australian dollar, which reduced returns in local currency terms.
• Global equity markets were firmer in USD terms, with market leadership broadening beyond mega-cap technology into energy, materials and other cyclical sectors.
• Portfolio activity was measured, with the initiation of a new position in Clarkson PLC and the exit of Allfunds Group following its agreed acquisition.

Top Holdings (alphabetically)

Gaztransport & Technigaz SA

France

Energy

Gaztransport & Technigaz SA is an engineering company engaged in designing containment systems with cryogenic membranes used to transport LNG for onshore and offshore LNG storage. It operates through the following sectors: liquefied natural gas carriers, multi-gas carriers, floating liquefied natural gas units, floating storage and regasification units and onshore storage tanks. The company was founded in 1994 and is headquartered in Saint-Remy-les-Chevreuse, France.

IMI plc

United Kingdom

Industrials

IMI Plc engages in the business of operating in fluid and motion control markets. It operates through the following segments: IMI Precision Engineering, IMI Critical Engineering, and IMI Hydronic Engineering. The IMI Precision Engineering segment focuses on designing and manufacturing motion and fluid control technologies where precision, speed, and reliability are essential to the processes in which they are involved. The IMI Critical Engineering segment provides flow control solutions that enable vital energy and process industries to operate safely, cleanly, reliably, and more efficiently. The IMI Hydronic Engineering segment includes providing technologies that deliver energy efficient water-based heating and cooling systems for the residential and commercial building sectors. The company was founded by George Kynoch in 1862 and is headquartered in Birmingham, the United Kingdom.

Nextpower Inc. Class A

United States

Industrials

Nextracker, Inc. engages in the provision of integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects. Its products enable solar panels in utility-scale power plants to follow the sun's movement across the sky and optimize plant performance. The company was founded by Daniel S. Shugar, Alexander Au, Nicholas Miller, Michael Mehavich, Marco Garcia, and Tyroan Hardy in 2013 and is headquartered in Fremont, CA.

Noritsu Koki Co., Ltd.

Japan

Consumer Discretionary

Noritsu Koki Co., Ltd. engages in the manufacture and sale of environment solution, kitchen, and photo processing equipment. It operates through the following segments: Monodzukuri, Health Care, Drug Discovery, Senior Life, Agricultural Food, and Others. The Monodzukuri segment handles research, development, production, and sale of pens and cosmetic parts. The Health Care segment provides radiology services, survey data, and genetic testing. The Drug Discovery segment provides research, development and sale of biopharmaceuticals. The Senior Life segment handles publication and mail order services for seniors. The Agricultural Food segment produces and sells fresh vegetables. The Others segment handles investigation and investment of new growth areas. It also offers mail order for dental materials and development and sale of drug treatment database for insurance companies. The company was founded by Kanichi Nishimoto in June 1951 and is headquartered in Tokyo, Japan.

USS Co., Ltd.

Japan

Consumer Discretionary

USS Co., Ltd. engages in the automobile auction business. It operates through the following segments: Auto Auction, Used Car Purchasing and Selling, and Others. The Auto Auction segment operates auto auction connection services through satellite television line and internet; provides used car information services; transportation of display and bid car; and offers financing services for the auto auction members. The Used Car Purchasing and Selling segment deals with the buy and sell of used cars and accident-damaged cars. The Others segment includes the recycling of end-of-life vehicles and waste rubber, and services of used automobiles export processing. The company was founded on October 29, 1980 and is headquartered in Tokai, Japan.

Market review

Global equity markets began 2026 on a firmer footing in US dollar terms, with leadership broadening beyond the narrow mega-cap technology cohort that dominated much of last year. However, a stronger Australian dollar reduced returns in local currency terms, resulting in modestly negative outcomes for Australian investors despite generally positive underlying market performance.

Performance dispersion remained elevated across regions and sectors. International equities outperformed US large caps in US dollar terms, supported by strength in parts of Europe and emerging markets. Korea and Taiwan were particularly strong, while several Latin American markets also advanced. In contrast, US mega-cap technology delivered more muted returns amid mixed earnings reactions.

Sector leadership reflected a rotation toward more cyclical exposures. Energy and materials were among the strongest-performing areas, supported by higher commodity prices and renewed geopolitical tensions in the Middle East. Consumer staples also delivered solid gains, while technology, healthcare and financials lagged.

Central bank policy divergence continued to influence capital flows and currency movements. The Federal Reserve held rates steady during the month, signalling a cautious pause as inflation remained above target. The European Central Bank and Bank of Japan also maintained policy settings, while Australia’s comparatively hawkish stance contributed to currency strength. Overall, January reflected a further broadening of market leadership and continued style rotations beneath the surface.

Portfolio Commentary

The Fund modestly outperformed its benchmark in January, with stock selection the primary contributor to relative returns. While currency movements influenced headline outcomes, company-specific developments were the more important determinant within the portfolio.

A new position was initiated in Clarkson PLC, the world’s largest shipbroker, with a market share well ahead of its nearest competitor. Clarkson operates a scaled global brokerage network and benefits from deeply embedded client relationships across the shipping industry. Its Research division provides proprietary data and analytics to thousands of organisations, generating high levels of recurring revenue at attractive margins. The investment case rests on Clarkson’s dominant competitive position, structural scale advantages and differentiated data assets, which create meaningful barriers to entry in a fragmented market. These advantages support resilient profitability across cycles.

The Fund exited Allfunds Group, crystallising gains following the binding acquisition agreement by Deutsche Börse Group and realising value after a period of strong share price performance.

Among the strongest contributors was NextPower, a provider of solar power solutions, which advanced after delivering results ahead of expectations and raising full-year guidance. A record order backlog reinforced confidence in the durability of demand and the company’s operational execution, supporting improved sentiment toward renewable energy exposures.

Noritsu Koki, a global leader in professional DJ equipment, also contributed positively. The company benefits from its dominant global market share, recurring revenues generated through its rekordbox software ecosystem and a strong net cash balance sheet. Strength in Japanese equities during the month provided a supportive backdrop.

International Seaways, an owner and operator of crude oil tankers, performed strongly as energy markets rallied amid higher oil prices and rising geopolitical tensions. The company’s move to take full ownership of Tankers International further enhanced its fleet optimisation strategy and competitive positioning within the tanker market.

Offsetting these gains were weaker performances from ChemoMetec, a supplier of automated cell-counting instruments to life sciences customers, and Cavco Industries, a US manufacturer of factory-built homes. ChemoMetec declined following revenue disruption linked to the US government shutdown, increasing the implied second-half growth requirement. Cavco experienced margin pressure and acquisition integration costs. Despite near-term volatility, we retain conviction in both holdings’ long-term structural growth drivers and competitive advantages.

Overall, portfolio positioning remains centred on high-quality small-cap businesses with durable competitive advantages and resilient balance sheets. We believe this discipline remains well suited to an environment characterised by rotation, dispersion and shifting macro expectations.