Global Fund Update – October 2026
Despite a significant rise in world bond market yields, global equities remained resilient during September, rising just under 1% in Sterling, although this was aided by the weakness of Sterling against the Dollar. The Goshawk Global Fund was down 1.5% during the month and is up 8.4% year to date.
Although equities rose in September at an index level, it is worth noting that the equal weighted S&P 500, which accounts for more than 70% of the global market, declined by nearly 5% in local currency.
September saw one of the steepest increases in US bond yields in many years. Ten year US Treasury yields increased by around 50bps during the month to finish at 5.28%, the highest level in nearly 20 years, while thirty-year yields increased to 5.63%, a rise of 39bps. The Federal Reserve raised interest rates in September to 3.75-4.00%, as expected, as Fed Chair Kevin Warsh sought to establish his credentials in controlling inflation. As the US economy continues to put in a resilient performance, expectations are that rates will likely rise again before the end of the year. As the conflict in the Middle East continues and the oil price remains elevated, other central banks around the world have also reacted by raising rates, although the UK has left policy on hold.
In China, the authorities reacted to the continued softness in the property market with stimulus measures designed to bring an end to a multi-year slump that has had a material impact on consumer confidence and retail spending. The Chinese government has introduced mortgage subsidies to help existing and first-time buyers, as well as liquidity support, lowering the supplementary lending rate by 25bps to 1.5% to support low-cost financing for affordable housing projects.
Stocks & Portfolio Moves
The prolonged downturn in the Chinese property market has had a knock-on effect for the luxury goods industry, and there have been a number of revenue and earnings downgrades in the short term. Inevitably, this has impacted the stock prices of the two names that we continue to own: LVMH and Moncler. Both of these stocks have struggled this year and, while valuations now look very attractive for long term investors, we remain patient to establish an appropriate entry point before adding to the sector.
Having struggled earlier this year, our healthcare portfolio has performed much better in recent months, and September continued this trend, led by our medtech and life sciences positions Agilent and Thermo Fisher, both of which have reported strong results after a period of anaemic growth. The strategic imperative of reducing healthcare costs has long been a key theme in our portfolios, and to reflect this, we have added a new position in Sandoz, the Swiss biosimilars and generics company, to our portfolios following a detailed internal research project. Many of the mega cap pharmaceutical companies are facing a significant loss of exclusivity for their products over the next ten years, and we believe that Sandoz is in the process of building a capability to have an extensive new range of products. Last month’s investor day highlighted the company’s BIO-100 strategy, which aims to move its existing biosimilar portfolio from 13 to over 100 compounds by 2040.
Sandoz was spun out of Novartis in 2021 and has long had a very successful business in generic medicines, and we expect this to continue, with the biosimilar portfolio adding a new dimension to growth in areas that include immunology, oncology and potentially the highly lucrative area of GLP-1 drugs in the next decade as established products lose their patent protection. From a healthcare industry perspective, the role that companies like Sandoz play in offering generic or biosimilar alternative products is important for keeping healthcare industry prices lower. We do not see this as strategically contradictory to our ownership of companies like AbbVie, J&J and Merck as innovative R&D and drug discovery remains absolutely critical to the healthcare ecosystem. Indeed, in September, AbbVie announced that it had been successful in introducing a new oral product for Parkinson’s disease, which is the fastest-growing neurological disease on the planet.
After a period of very strong performance, we have been taking some profits in Apple, which has proved to be one of our most defensive stocks in 2026. Apple shares have risen by over 20% year to date and by more than 30% over the last twelve months. Although they have continued to deliver strong results, we now feel that the valuation more than reflects the strength of the company’s franchise and the improved quality of earnings that it has delivered by expanding the services side of the business. This side has materially higher gross margins than the hardware part of the company, which is comprised of the iPhone, iPad and personal computer products which have performed so well in recent quarters. We believe that Apple shares have been rewarded for staying out of the AI capex “arms race” and, as a result, has maintained a highly cash-generative business model. This has enabled the company to continue to deliver on what has become the biggest share buyback programme in stock market history, worth over $870billion since 2012 and reducing Apple’s share count by over 40%.
We increased our position in Union Pacific in September, making it one of our larger portfolio holdings. As the oil price has remained stubbornly high following the conflict in the Middle East, we see increasing evidence of more traffic leaving the roads and moving back onto the US rail network. The company recently delivered strong results, helped by good execution and revenue growth of 12%. At the same time, Union Pacific is trying to gain regulatory approval for its proposed merger with Norfolk Southern, which would create America’s first transcontinental railroad. Although the outcome of the transaction remains uncertain, we believe it would add considerable value to the franchise if it goes through, though the business has an attractive long term outlook even if it remains a standalone company.
Outlook
Recently bond investors have taken a rather gloomy view of prospects, while equity investors have remained upbeat. The higher yields we see reflect the strong US economy as well as inflationary pressures, some from that economic activity but some from higher energy costs. Our strategy is therefore to manage the portfolio with a bias towards safeguarding the gains we have made, while also shifting gains towards less favoured (and expensive) stocks which have good long term growth potential but have seen dull trading of late. We believe that, by taking a longer term view, we can avoid some of the valuation excesses in parts of the equity market, and so we continue to look forward to real returns from our portfolios over the medium and longer term.
Goshawk Asset Management
Data source: Goshawk Asset Management, Bloomberg
Disclaimer: This is a marketing document. Further information about Vermeer UCITS ICAV, including the current Prospectus and Key Investment Information Documents (“KIIDs”), are available in English and can be found at https://www.goshawkam.co.uk. Past performance may not be a reliable guide to future performance. Investments can go down as well as up and therefore the return on investment will necessarily be variable. Income may fluctuate in accordance with market conditions and taxation arrangements. Changes in exchange rates may have an adverse effect on the value, price, or income of the product. Goshawk Asset Management is a trading name of North Atlantic Investment Services Limited (FCA no. 969870) with company no. 13800256. North Atlantic Investment Services Limited is authorised and regulated by the FCA (FRN 969870) and is incorporated in the United Kingdom (Company no. 13800256). Registered Office Address: 6 Stratton Street, Mayfair, London, W1J 8LD. Vermeer UCITS ICAV (“the Fund”) is registered with the Central Bank of Ireland as an open-ended umbrella-type Irish collective asset management vehicle with variable capital (Register Number C154687). Opinions expressed, whether specifically or in general or both, on the performance of individual securities and in a wider economic context represent our view at the time of preparation. They are subject to change and should not be interpreted as investment advice. This document is intended for use by shareholders of the Fund, persons who are authorised to carry out investment business, professional investors, and those who are permitted to receive such information. Nothing in this document should be construed as giving investment advice or any offer, invitation, or recommendation to subscribe to the Fund. Any decision to subscribe should be based on the Fund’s current Prospectus and KIIDs. Waystone Management Company (IE) Limited, as UCITS Man Co, has the right to terminate the arrangements made for the marketing of funds in accordance with the UCITS Directive. A summary of investor rights policies can be found at https://www.waystone.com/waystone/policies.