Global Fund Update – May 2026
Global equity markets rallied strongly in April, more than recovering the losses in March that resulted from the military action by Israel and the United States against Iran. The Goshawk Global Fund enjoyed a strong month, buoyed by the performance of Intel, one of our larger holdings, with the Fund rising 6.5% over the month, taking year to date gains to 4.1%.
Equities have staged a remarkable recovery, despite the oil price remaining elevated and the geopolitically and commercially crucial Strait of Hormuz remaining virtually closed to all traffic, which is likely to create significant economic disruption if it continues in the medium term.
Stocks & Portfolio Moves
Intel shares rose 114% in April alone having already rallied strongly this year. The company released excellent results, revealing that recovery is well under way following the management changes that took place last year. Results were well ahead of expectations and have led to considerable upgrades to consensus estimates. After the spectacular rally in the shares, we are reviewing the position given that it is now more than 3% of the global portfolio.
Artificial intelligence continues to be a key thematic for the market as investors try to interpret the rapidly evolving news flow of new products and the impact that new companies such as Anthropic and OpenAI are likely to have on incumbent businesses, especially in areas such as software.
Given this uncertainty, we closed our position in Microsoft as we have become less confident in the strength of its moat and the likely return on investment of its enormous capital expenditure programme.
Although IBM posted solid results with software revenues up strongly, the shares fell heavily as investors continued to worry about lack of growth in the consulting business and lack of upgrades to its full year guidance despite beating expectations and reaffirming a strong forecast for improving free cash flow.
However, both Amazon and Alphabet announced impressive results with continued robust growth in their respective cloud businesses. Alphabet’s Google Cloud franchise demonstrated growth of an astonishing 63% y/y and now represents 18% of total sales, with margins improving from as little as 9.4% a year ago to above 30% as AI demand powers growth. At Amazon, AWS is also enjoying accelerating growth, justifying the increase in capex that the company announced last quarter. Both Amazon and Alphabet shares have performed well this year, and April was another strong month for both stocks, adding $615billion and $1.17trillion to their respective market capitalisations over the month.
The healthcare sector remains exceedingly difficult and we are continuing to run with significantly lower weights in this area than has historically been the case for what we still believe is a secular growth industry driven by ageing populations and the need to lower costs in the healthcare system. We currently have just over 9% of the global portfolio in this sector, divided between five names, all of which reported earnings during April and delivered satisfactory results. Nevertheless, Thermo Fisher, a world leader in scientific and diagnostic equipment, which is our only remaining investment in the life science tools space, still declined over 8% on the day of results despite meeting revenue forecasts and increasing its full year guidance, helped by the completion of its acquisition of Clario for $8.9billion. Clario looks a typical Thermo type bolt-on deal, providing endpoint data for clinical trials. Thermo has been materially de-rated in recent years and likely needs to deliver accelerating organic growth in order to improve share price performance, which we believe will come through, and therefore we are remaining patient with our holding.
In the pharmaceutical sector, we own Johnson & Johnson, AbbVie and Merck, with the latter two both delivering strong revenue growth and trading at attractive valuation multiples. AbbVie, which focuses on neuroscience and cancer immunotherapies, has not performed well this year, but both its Immunology and Neuroscience portfolios are performing strongly, with the latter growing at over 24% in the latest quarter, helped by robust growth in new products as well as from therapeutic Botox.
In the managed care sector, UnitedHealth bounced very strongly in April, rising over 36% after releasing reassuring results while also benefiting from an improved 2027 Medicare Advantage final payment rate announcement earlier in the month. The Advance Notice rate announced in April of just 0.09% led to a sell off across the sector in January with the final rate decision seeing a near 2.5% improvement on the advance number and better alignment with underlying cost trends in the sector. Despite the strong recent performance, we still view the company as an attractively valued investment.
In our Japanese portfolio, most of our companies have reported results and, so far, they have reported solid earnings. The standout performer has been factory automation company Keyence, whose shares rose 15% on the day after results as the company reported revenue growth of 18%, the fastest rate of growth in four years. Perhaps just as importantly, management finally approved changes in the company’s Articles of Association that will finally enable them to buy back stock. Keyence is sitting on an incredible ¥1.1trillion of cash, and so can continue to invest in its business aggressively, buyback stock and increase the dividend from a position of strength. The recent strong rise in the shares, comes after a lengthy period of underperformance, but we believe this should now be in the rear view mirror as an improving industrial automation cycle is aided by better capital allocation.
We met with the management of Japanese factory automation and robotics company Yaskawa during April ahead of its announcement of new financial targets later this month. Management acknowledges that it has not been able to meet the targets it set in 2022 as the manufacturing industry has suffered a period of prolonged weakness. Yaskawa shares have performed well in the last year as the market has become enthusiastic about the prospects for physical AI, and the company is clearly excited about the opportunity ahead in new industry verticals for its robotics and motion control business, including areas such as healthcare and food. Yaskawa is clearly a beneficiary of continued investment by the semiconductor industry, but may continue to be held back somewhat by its exposure to the automotive industry in Europe, though this is somewhat offset by exposure to the shift to electric vehicles in the Chinese market.
Outlook
Although markets have reached new highs, this has been driven by a small number of large semiconductor manufacturers having a startling rise. Many other stock prices have made little or no progress – indeed, we are finding a great range of good quality (if less exciting) companies at attractive valuations for the longer term. Probably this is the point: that there is excessive focus on more exciting industries over the next couple of years, leaving industries with good longer term prospects largely ignored. As the fashionable stocks make up a larger and larger amount of the equity index, it looks to us more and more fragile and unbalanced. We therefore remain bullish, but more bullish of our selection of investments rather than the equity index with its concentrations in few volatile areas.
Goshawk Asset Management
Data source: Goshawk Asset Management, Bloomberg
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