Top-performing funds: navigating markets in a changing global landscape

The global investment environment has become increasingly complex, shaped by geopolitical tensions, technological disruption and shifting economic alliances. In such conditions, identifying fund managers able to navigate volatility while maintaining disciplined investment processes has become more important for long-term investors.

This supplement examines how several leading asset managers are responding to that challenge. The firms featured here illustrate how investment managers are adapting to a rapidly changing market environment. They use different strategies, ranging from global diversification and systematic investing to specialist sector expertise and concentrated global portfolios.

Periods of uncertainty often reveal the true strength of an investment process. While market volatility can unsettle investors, it also highlights the importance of disciplined research, effective risk management and the ability to identify long-term structural opportunities.

A more complex global backdrop

Financial markets are increasingly influenced by forces that extend beyond traditional economic indicators. Geopolitical developments, technological innovation and changing policy priorities are reshaping the global investment landscape.

The inflation shock that followed the Covid-19 pandemic prompted central banks to raise interest rates sharply in many major economies. While inflation has begun to moderate in some regions, the legacy of that tightening cycle continues to influence asset valuations and investor sentiment.

At the same time, geopolitical tensions have introduced a new layer of uncertainty for global markets. Trade disputes, shifting alliances and more assertive economic policies among major powers have contributed to a more fragmented global landscape.

These developments have periodically triggered sharp movements across equity, commodity and currency markets, reinforcing the importance of diversification and disciplined portfolio construction.

For fund managers, navigating this environment requires the ability to balance short-term market volatility with a clear understanding of long-term economic trends.

Technology and structural change

Alongside geopolitical developments, technological transformation is emerging as one of the most powerful forces shaping global investment opportunities.

Artificial intelligence, automation and digital infrastructure are reshaping industries ranging from finance and manufacturing to healthcare and communications. Companies able to harness these technologies effectively often achieve significant competitive advantages, making them attractive prospects for long-term investors.

However, rapid innovation can also create valuation challenges. Elevated expectations and substantial capital investment in emerging technologies mean investors must carefully assess whether share prices accurately reflect long-term earnings potential.

As a result, many fund managers are placing greater emphasis on valuation discipline and fundamental analysis when assessing opportunities in high-growth sectors.

At the same time, the pace of technological change is accelerating competition across industries. Companies that fail to adapt risk losing market share to more innovative rivals, while those that successfully integrate new technologies can unlock entirely new sources of growth. For fund managers, identifying businesses capable of sustaining competitive advantages in such an environment has become a central part of long-term portfolio construction.

This dynamic has also encouraged a greater focus on structural trends rather than short-term market movements. Themes such as digital transformation, artificial intelligence and the electrification of energy systems are expected to influence investment opportunities for many years. Managers therefore increasingly seek companies positioned to benefit from these long-term shifts rather than attempting to predict short-term fluctuations in market sentiment.

Different investment approaches

The firms featured in this supplement illustrate several distinct approaches to managing capital in today’s markets.

Investec Wealth & Investment International emphasises global diversification and valuation discipline in portfolio construction. In an environment where leadership in global equity markets can shift between regions and sectors, maintaining balanced exposure across geographies has become increasingly important.

Prescient Investment Management takes a systematic and evidence-based approach to investing. Its strategies rely on rules-based processes informed by empirical data and long-term research, aiming to remove emotional bias from investment decisions while maintaining consistent portfolio positioning.

Within Denker Capital’s broader product range, the firm has specialist expertise in the global financial sector. The global financials team seeks to identify opportunities that may not be fully reflected in broader market strategies.

Peregrine Capital, one of South Africa’s longest-running hedge fund managers, emphasises disciplined risk management and long-term compounding. The firm recently launched the Vision Fund, a US dollar-denominated strategy designed to provide investors with exposure to a concentrated portfolio of its highest-conviction global investment ideas.

The role of diversification

One of the key themes emerging across global asset management is the importance of diversification. Exposure across multiple asset classes, geographic regions and investment strategies can help reduce portfolio risk while still allowing investors to benefit from long-term growth opportunities.

Periods of market stress often highlight the value of diversified portfolios. When certain sectors or regions experience sharp declines, exposure to other assets can help stabilise returns and protect capital.

This approach also allows fund managers to remain invested in markets while still managing downside risk. This is an important consideration in an environment characterised by frequent volatility.

Long-term thinking in volatile markets

Despite the uncertainty surrounding global markets, one principle remains consistent: long-term investment success is rarely determined by a single market call.

Instead, it is typically the result of disciplined decision-making, careful portfolio construction and the ability to maintain a long-term perspective even during periods of market turbulence.

Many of the world’s most successful investment strategies are built around this principle. By focusing on long-term economic trends rather than short-term market noise, fund managers aim to identify opportunities that can compound value over time.

Looking ahead

Global markets are likely to remain influenced by geopolitical developments, technological transformation and evolving economic policies. Trade relationships between major economies, fiscal policy decisions and shifting capital flows will continue shaping the investment environment in the years ahead.

At the same time, demographic changes, energy transitions and the ongoing digitisation of industries are expected to create new investment opportunities across both developed and emerging markets. For fund managers, the challenge lies in distinguishing between temporary market narratives and structural changes that can drive long-term value creation.

For investors, this environment reinforces the importance of partnering with managers able to combine rigorous research with disciplined portfolio construction. In markets where volatility has become more frequent, strategies grounded in long-term thinking and robust risk management may prove better positioned to capture opportunities while protecting capital.

For investors, the challenge is navigating this uncertainty while maintaining exposure to long-term growth opportunities. The fund managers featured in this supplement illustrate how different investment philosophies can respond to that challenge. Whether through systematic portfolio construction, specialist sector expertise or concentrated global strategies, each approach reflects an attempt to balance risk with the pursuit of sustainable long-term returns.

In an increasingly complex world, disciplined investment processes and a clear long-term perspective may prove more valuable than ever.

Investec Investment Management: patience, valuation and discipline in an uncertain market

Global markets in 2025 were shaped by persistent inflation, uneven economic growth and rising geopolitical uncertainty. Against that backdrop, investment outcomes were increasingly influenced by valuation and regional positioning, with previously lagging markets beginning to outperform.

Shift in global market leadership

According to Chris Holdsworth, Chief Investment Strategist at Investec Wealth & Investment International, the year marked an important shift in global equity performance dynamics.

“For the first time in a while, countries that were cheaper outperformed and countries that were more expensive underperformed,” he says. “That meant the US underperformed the broader global index for the first time in several years.”

Concerns around the US fiscal outlook and the potential impact of tariffs on growth contributed to a weaker US dollar during the year. Investors also sought safe-haven assets, pushing gold higher amid uncertainty around global economic conditions.

Staying true to mandates

While headline returns often attract the most attention, Investec assesses portfolio performance through a different lens. The key question, Holdsworth explains, is whether portfolios delivered outcomes consistent with their intended mandates.

“The test is whether a portfolio did what it is supposed to do,” he says. “If a high-quality mandate had performed exceptionally well in a year when quality was out of favour globally, that would have suggested a divergence in style.”

Balancing risk and return

Investec’s multi-style mandates performed strongly in 2025, reflecting the broader market environment. Risk management also played an important role in navigating the year’s volatility.

“Risk management is critical and needs to be balanced against the opportunity for generating return,” says Holdsworth. “At the same time, investors need to be able to stomach short-term volatility in order to earn the premium that comes from long-term equity investing.”

Patience and long-term thinking

A defining feature of Investec’s investment philosophy is patience. Investment decisions are based on detailed research and a long-term time horizon, even when markets move against a position in the short- term.

“Often a call will go against us over shorter periods and we will test our thesis,” says Holdsworth. “Most of the time we expect the thesis to remain intact and we ride out the volatility.”

Several of the firm’s long-term expectations began to play out during 2025. They included US dollar weakness, relative underperformance of US equities and stronger performance from Japanese equities. These dynamics contributed to solid returns in Investec’s multi-manager portfolios.

Looking beyond the US

Asset allocation decisions also reflected the view that global leadership was beginning to broaden beyond the US.

“Our key call was to be overweight non-US markets,” Holdsworth says. “Even after recent strong performance, we are not yet willing to close that position.”

Looking ahead, Investec expects global markets to remain characterised by elevated uncertainty. Markets have already become more volatile, and performance differences between regions and sectors are likely to remain wide.

Why valuation still matters

For long-term investors, the central lesson remains clear: valuation still matters.

“It can take time, but ultimately valuation has a strong bearing on market returns,” says Holdsworth. “At the same time, not everything reverts to the mean. Record or near-record valuations should often be treated as warning signs.”

In a more uncertain global environment, disciplined investment processes and a long-term perspective may prove more important than ever.

Inside a standout year in global financials

With a 47.9% return in US dollars in 2025, the Denker Global Financial Fund finished the year well ahead of broader global equity markets. The fund, managed by Denker Capital’s Kokkie Kooyman, focuses on global banks, insurers and other companies in the financial sector.

Although the fund benefited from rising bank share prices, particularly in Europe and the UK, the result reflects more than one strong year. It is the outcome of a repeatable process applied consistently for more than 20 years.

What sits behind the long-term track record?

Experience and learning

Financial companies are complex and closely linked to economic cycles. Having navigated multiple crises, the global financials team at Denker Capital understands the risks these businesses face and sees when markets overreact.

Investing in businesses, not shares

Buying a bank or insurer means backing its management, strategy and ability to grow shareholder value over time, rather than trading short-term price movements.

Not overpaying

A share can look cheap but still disappoint if the underlying business is weak. The focus remains on owning quality businesses at sensible prices.

A clear circle of competence

The strategy is managed by a dedicated global financials team with deep sector expertise.

Emotional discipline

Financial stocks can be volatile. The team avoids chasing momentum and is prepared to invest, or stay invested, when sentiment is negative but fundamentals remain intact.

While 2025 was an outstanding year, it was not an anomaly. It reflects a disciplined, specialist approach that has been applied consistently for more than two decades.

Disclaimer

This is a marketing communication and does not constitute investment advice or an offer or solicitation to buy or sell any securities. The Denker Global Financial Fund is a sub-fund of Sanlam Universal Funds plc, an Irish UCITS authorised by the Central Bank of Ireland. Past performance is not a reliable guide to future performance. The value of investments may go down as well as up and investors may not recover the full amount invested. Source of performance data: Morningstar. The return shown is for the A class, which is the most expensive class (with an annual management fee of 1.25%). The prospectus, supplement, MDD and KIID are available free of charge at www.sanlam.ie

Concentrated global investing in a volatile market

Global financial markets are navigating a period of heightened uncertainty, shaped by geopolitical tensions, shifting economic alliances and rapid technological change. For fund managers, this environment requires a careful balance between protecting capital and identifying opportunities created by market volatility.

For Peregrine Capital, one of South Africa’s longest-running hedge fund managers, volatility is not only a risk but also a source of potential opportunity. The firm has been managing client capital since 1998 and has navigated multiple market cycles over that period, refining strategies designed to balance downside protection with long-term growth.

Managing risk in turbulent markets

Periods of geopolitical and economic uncertainty can trigger sharp market swings, particularly when policy announcements or trade measures alter investor expectations. In such conditions, disciplined risk management becomes central to portfolio strategy.

According to Peregrine Capital, protecting client capital during periods of stress allows portfolios to remain positioned for long-term growth opportunities when markets stabilise.

At the same time, volatile markets can create pricing dislocations that enable investors to increase exposure to high-quality companies at more attractive valuations.

A focused global strategy

Within this context, Peregrine Capital recently introduced the Vision Fund, a US dollar-denominated strategy designed to provide investors with exposure to a concentrated portfolio of the firm’s highest-conviction global investment ideas.

Unlike more diversified portfolios, the strategy accepts higher short-term volatility in pursuit of stronger long-term returns. The fund focuses primarily on global companies positioned to benefit from long-term structural growth trends, including technological innovation and digital transformation.

Artificial intelligence and related technologies remain an important theme for many global investors as industries continue to adapt to rapid advances in computing power, automation and data-driven business models.

Performance and long-term compounding

The Vision Fund delivered a 28.96% net return in 2025, benefiting from exposure to selected global technology and innovation-driven investments.

Peregrine Capital’s flagship strategies also continued to demonstrate the impact of long-term compounding. The High Growth Fund and Pure Hedge Fund delivered net returns of 14.67% and 10.6% respectively during the year.

While market conditions are expected to remain volatile, Peregrine Capital believes that maintaining disciplined investment processes and focusing on high-quality companies positioned for long-term growth can help investors navigate uncertainty while continuing to build capital over time.

Prescient Investment Management: disciplined exposure to South Africa’s largest companies

South African equity investors navigated a complex market environment in 2025, shaped by persistent inflation concerns, shifting expectations for interest rates and uneven global economic growth. Against this backdrop, disciplined investment processes and diversified sources of return played an increasingly important role in navigating volatile markets.

Systematic investment approach 

The Prescient Core Top 40 Equity Fund ranked strongly within its ASISA South African High Equity peer group in 2025, while also maintaining competitive rankings over the three- and five-year periods. According to Prescient Portfolio Manager and Investment Analyst Seeiso Matlanyane, this consistency reflects a systematic investment approach rather than a reliance on short-term market calls.

Post-pandemic disruption

“The period following the pandemic has been defined by powerful macro forces,” he explains. “Investors have had to navigate debates around inflation, changing monetary policy expectations, technological disruption and a complex geopolitical backdrop.”

One of the key questions facing investors was whether the post-pandemic inflation surge would prove structural or temporary. Prescient’s analysis suggested that much of the inflation shock would eventually prove transitory, with tighter policy ultimately giving way to a more favourable interest-rate environment.

Evidence-based investing

Rather than attempting to rotate aggressively between sectors or predict short-term market movements, Prescient’s approach focuses on maintaining broad market exposure while systematically incorporating macro information into portfolio construction.

Central to the strategy is what Matlanyane describes as a systematic, evidence-based investment framework. “Our investment philosophy is grounded in what we call ‘gut-free investing’,” he says. “Rather than relying on intuition or discretionary judgement, portfolios are constructed using rules-based processes informed by empirical data and long-term research.”

This structured approach becomes particularly valuable during periods of heightened market volatility. While financial markets frequently react to short-term narratives and investor sentiment, a clearly defined process helps ensure that portfolio decisions remain aligned with long-term evidence.

Embedded risk management

Risk management is also embedded within the portfolio structure. The strategy combines broad equity market exposure with additional sources of return generated through systematic strategies implemented in liquid cash and fixed-income markets.

Within this portable alpha framework, equity exposure provides diversified market beta while additional alpha is generated from other segments of financial markets. These return streams are largely uncorrelated, providing diversification that helps manage overall portfolio risk.

Importantly, this means Prescient does not rely on traditional bottom-up stock selection as the primary driver of performance.

Sources of alpha

“Extensive empirical evidence suggests that consistently outperforming through discretionary stock picking in large, well-researched markets is extremely difficult,” says Matlanyane. “Our edge comes from combining equity exposure with additional alpha generated in other areas of the market.”

For long-term investors, the lesson remains clear: disciplined processes and patience are essential for capturing the benefits of compounding. “Equity markets reward patience over time,” Matlanyane says. “The greatest risk for many investors is not volatility itself, but the temptation to abandon a strategy during short-term periods of market noise.”

Looking ahead, investors are likely to continue navigating an environment shaped by shifting inflation dynamics, evolving monetary policy and geopolitical uncertainty. In such conditions, maintaining diversified market exposure while systematically identifying additional sources of return may remain an effective way to capture long-term equity growth while managing risk.