Global Fund Update – April 2026
After a solid start to the year in January and February, global equities suffered a very difficult month in March after the increase in geopolitical tensions in the Middle East that followed US and Israeli military action in Iran on 7th March.
As the conflict has continued into its fifth week, fears of supply side disruption to oil and other vital commodities have materially increased inflation concerns. In Europe and in countries like the UK, expectations for interest rate cuts to help improve the economy have been replaced by fears that rates may now have to rise to tame inflation risks.
During March, global equities lost 4.6% in Sterling and the Goshawk Global Fund declined by 6%, negatively impacted by our heavily overweight position in Japan. The Nikkei lost 13% in March in local currency, nearly wiping out all the strong gains made in the earlier weeks of the year. Despite this, Japanese equities did outperform the US market in the first quarter.
For the quarter as a whole the global equity market declined by just under 2% in Sterling and the Global Fund fell just over 2%.
In the US, the Federal Reserve left interest rates unchanged after cutting rates three times in the latter months of 2025. At the recent March meeting of the FOMC, outgoing Chair Jerome Powell noted that the Fed was in “wait and see” mode. This was reinforced in a speech given at Harvard University at the end of the month where Powell noted that it was too soon to know how much of an impact the oil shock would have on the economy and that the Fed was in a good place to “look through” the rise in the oil price, as the current rate setting is high enough to allow for patience to see how the situation unfolds.
In addition to Mr Powell’s comments on rates, he did also note that the Fed was monitoring the situation in the private credit market “super carefully” but currently does not see it posing a systemic threat to the broader financial system. We are also keeping a close eye on private credit and believe we have little direct exposure to companies who actively participate in these opaque markets. We also have no exposure to the US or European banking sector, though we do hold Asian banks SMFG in Japan and ICBC in China.
Stocks & Portfolio Moves
We made a number of changes to our portfolios in the first quarter increasing our exposure to energy markets before the outbreak of hostilities in early March. We introduced Exxon Mobil, the world’s largest integrated oil company, to the Global Fund in February alongside EQT, the US’s largest producer of natural gas that not only serves the domestic market but has major ambitions to be a substantial exporter to the rest of the world. We have owned Cameco, the world’s largest quoted uranium miner, for many years, and believe the role of nuclear as a key energy source has only been enhanced by recent events in the Middle East.
In March we added two new “energy security” names to our portfolios via Ithaca Energy and Ørsted, the Danish offshore wind company.
In late 2024, Ithaca announced a transformational business combination with Eni SpA that enhances its position in the North Sea, making it one of the largest resource holders with a diversified portfolio of production and development opportunities that should underpin long-term organic growth and deliver essential energy for the security of the UK while also supporting decarbonisation targets.
At its recent full-year results Ithaca Energy detailed a solid financial performance with free cash flow from operations of £683million versus just £260million in the prior year. From the cash flow, Ithaca was able to deliver £500million of dividends to shareholders, giving the stock a yield of around 9%. Management has outlined a capital allocation framework targeting 20-35% shareholder returns of post-tax cash flow from operations, an increase from the previous range of 15-30%.
We have re-initiated a position in Ørsted into the portfolios after many years on the sidelines following a very successful investment in the company up until January 2021, where the valuation of the business reached a point that far exceeded the company’s prospects. When we sold our holding over five years ago, we were not expecting the company to run into so much financial trouble that it required a substantial equity refinancing in 2025 that raised $9.4billion to support the pay down of the company’s debt and provide the necessary working capital to complete a highly capital intensive business plan. Ørsted’s new management has also had to engage in a material divestment plan that has seen it raise nearly $7billion and focus on offshore wind as its key competence.
The company still faces risks to its US business where, in December, both the Revolution Wind and Sunrise Wind projects were issued “stop work” orders by the US government due to “national security” concerns. Ørsted was allowed to restart construction in February but there remains a high degree of political risk to these projects. However, the remainder of the company’s projects now appear to be in a far better position for the existing portfolio of assets to generate solid profits and cashflow. In its recent results, Ørsted demonstrated that it had been able to achieve its targets even with a sub-optimal level of annual wind speeds. We believe renewable energy has a very important role to play in future energy security and Ørsted remains at the heart of this opportunity.
Outside of increased geopolitical tensions and growing concerns around private credit markets, the other key market driver is the fast-evolving technology revolution created by artificial intelligence.
While AI has created a tailwind for a number of companies in our portfolio, including but not limited to Alphabet, Equinix, Schneider Electric and physical AI robotics company Yaskawa, it has also created a major headwind for a number of quality franchises in our portfolios. It is unclear how consequential new AI driven products from companies such as Anthropic will ultimately prove to be, but we took action to reduce our exposure to software and related sectors by selling outright our positions in Salesforce and SAP while meaningfully reducing exposure to Microsoft and trimming both Accenture and IBM. We are closely monitoring new developments in the artificial intelligence revolution from all perspectives, including the semiconductor industry, infrastructure providers and, in fact, all companies in our portfolio.
Despite a serious sell off in our Japanese and Chinese portfolios in March, we have maintained our overweight stance to this part of the world in the first quarter. We did de-risk our Japanese weightings early in March via the sale of SMC and some profit taking in Yaskawa, but notwithstanding the current oil crisis we remain confident of the growth opportunities these markets present.
Mitsubishi Electric remains our largest position in Japan. The company delivered good results and continues to re-shape its business portfolio to improve returns, and the share price has responded well, climbing around 100% in the last twelve months.
In China, both Alibaba and Baidu suffered difficult quarters in a “risk off” environment, but both are tracking well on their pivot to AI and we have maintained our exposure to both companies. We also continue to hold China Life Insurance and ICBC, both of which produced solid results at the end of March.
Outlook
We do not try to anticipate developments in the Gulf, but expect the summer to see supply disruptions, a rise in inflation and a slowing consumer economy. Our portfolios are well positioned to cope with these developments, and we note that most of the companies we have selected for the portfolio coped well with both the pandemic and the start of the Ukraine war.
While we monitor the news, recent events have changed neither our approach nor our belief that our global equity fund will product attractive returns ahead of inflation over the years ahead.
Goshawk Asset Management
Data source: Goshawk Asset Management, Bloomberg
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