Global Fund Update – December 2025
November was a tale of two distinct halves for global equities. After a poor start to the period, stocks then rallied strongly in the latter stages of the month to close the November slightly lower in Sterling terms. The Goshawk Global Fund declined just over 1.5% in November and is up around 5.5% for the year.
Stocks & Portfolio Moves
US equities led global markets lower for much of November as uncertainty increased around whether the Federal Reserve would be able to cut interest rates at the December meeting. This has been caused by the difficult balance of the two sides of the Fed’s mandate, containing inflation and maintaining a stable labour market. Inflation has been persistently above target, while a weakening labour market has raised concerns around the underlying strength of the US economy. However, in the last week of November, a number of influential members of the Fed appeared to have come out in favour of another rate cut before the end of the year, which had the effect of stabilising markets.
There continues to be concern about consumer spending in the US, and there has been unmistakable evidence of trading down. After a strong run, we sold our position in US off-price retailer Burlington Stores ahead of results that subsequently disappointed the market. Burlington has been the beneficiary of the trends towards consumers seeking greater value for money, and while we still believe management has done a good job revitalising the company in recent years, we felt that the risk reward was poor in the short term and as a result were happy to move to the sidelines.
This now leaves our portfolios with limited exposure to the US consumer. We still own shares in Walt Disney and felt that the stock was treated very harshly following its recent results. Disney shares have pulled back from just below $120 to around $104 at the end of the month, despite producing a solid set of results and continuing to confidently forecast double digit earnings growth for the next two years. While uncertainty continues around management transition at the company with Bob Iger set to retire for the second time, we believe that investors are under-appreciating the continued strength of the overall business. The streaming businesses Disney+ and Hulu, which are being combined into one service, are now reaching an inflection point where profits should move considerably higher in the coming years. Despite concerns over consumer spending, the Parks business remains extremely resilient and Cruises are set to play an increasingly significant role in the profitability of the Experiences division. We believe Disney shares offer particularly good long-term growth prospects and are prepared to remain patient through managerial uncertainty.
Elsewhere in our US portfolio, we also closed out our position in Meta Platforms after disappointing results which raised further concerns about its aggressive levels of spending. Meta stated that it was set to continue this huge investment into AI-related data centre infrastructure to support its plans for future growth in AI. Meta indicated that it was planning for another notable step up in capex in 2026, with estimates now sitting at well over $100billion. Although the company does have a strong balance sheet and cash flows to support this level of spending, we are concerned that the returns from this investment remain unclear and therefore, at this time, decided to take profits and watch from the sidelines.
In Japan, by contrast to the US, there is continued speculation that the Bank of Japan will finally raise interest rates again at the December meeting as part of its ongoing strategy to normalise monetary policy. For many months, BoJ Governor Kazuo Ueda has been procrastinating about rate rises given the economic uncertainty caused by US tariff policy and the impact it would have on the Japanese economy. The new Prime Minister, Sanae Takaichi, has revealed an expansionary fiscal policy to stimulate faster growth. This has contributed to a considerable further weakening of the yen, adding pressure on the BoJ to step in and raise rates, narrowing the gap between the US and Japan. Longer-term Japanese rates have already moved up, with ten-year government bond yields moving to above 1.8% from as little as 1% a year ago.
One beneficiary of higher rates in our portfolios is Sumitomo Mitsui Financial Group, whose shares rallied by around 13% in November and have performed well this year. SMFG issued a decent set of results when it reported in November, showing growth in income from loans and deposits due to rising rates along with growth in loan volumes. The bank has also been increasing its exposure to the fast-growing Indian economy by increasing its investment in Yes Bank. SMFG’s management team is targeting improving its price-to-book in line with global peers via both faster growth and a higher return-on-equity. We remain confident in the strength of Sumitomo’s financial position and like the balance it creates in our Japanese portfolio.
After a strong run, Alibaba shares have given back some of its recent gains. Last month’s results continued to show the successful growth of its AI strategy, but also highlighted the cost of this investment and the negative impact of the ongoing price war in the company’s Quick Commerce division. Net profits in the second quarter shrank by half but were still $3billion. Crucially, Alibaba’s Cloud Intelligence division continues to grow very strongly, with revenue growth of 34%, and the company plans to continue its aggressive investment in AI. Revenue from the food delivery Quick Commerce division did grow by 60% but at this time, the division is considerably loss-making and the company is working to reduce losses. By October, the loss run rate was materially better than in July, thanks to an improvement in order structure and a reduction in logistics costs. We have modestly reduced our position in Alibaba, but still believe that its long-term investment and strategy around AI and e-commerce will be successful and that the valuation of the stock remains attractive for the long term.
Outlook
As we move towards the end of 2025, we remain optimistic about the strength and balance across our portfolios heading into next year. We fully acknowledge that there remains considerable uncertainty with respect to the global economic outlook, but believe that the financial strength and robust market position our companies have in their various sectors enables us to be confident about our potential to deliver solid long-term returns for our investors.
Goshawk Asset Management
Data source: Goshawk Asset Management, Bloomberg
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