MARKETS
In June, the Nasdaq Composite Index dropped -2.81% and the S&P Index was down -1.06%. The Russell 3000 was slightly down -0.41%. In Europe, the Euro Stoxx 50 index increased 2.28% in USD, meanwhile DAX index declined -2.63%. China/HK markets had some divergence in terms of performance, with the Hang Seng Tech Index (USD) retreated -8.50%, while the China onshore index (CSI300 Index) up 1.47%. Sector-wise, the MSCI World Communication Services Index dropped -8.05%; the MSCI World Information Technology Index was down -1.98%; and the MSCI World Consumer Discretionary Index declined -4.11%. The MSCI Consumer Staples Index rose +0.89%, and MSCI Healthcare Index was up 4.91%. Last but not least, the MSCI World Financials Index went up 3.42%.
THEMATICS
In June, the market welcomed the largest IPO in history, SpaceX, which debuted with a US$1.8 trillion valuation, raised USD$75billion in proceeds, and was ~4x oversubscribed. Our fund participated in this IPO as we remain positive on all three of SpaceX’s core segments – Starlink Connectivity (with 12 million global subscribers and 10,000 satellites in orbit), AI segment (including xAI, coding platform cursor, and data center capacity agreements); as well as The Space segment (includes the Starship program). Combined,SpaceX is targetingg a total addressable market of US$28.5 trillion, which represents nearly a quarter of the global GDP. Leveraging these substantial market opportunities, Elon Musk, the founder of SpaceX, has projected the group to achieve US$1 trillion in revenue by 2030, a ~53x jump vs SpaceX’s 2025 revenue of US$18.7 billion.
During the month, our holding, CrowdStrike, one of the largest publicly listed cybersecurity companies, has reported strong first quarter results. The group delivered revenue growth of 26% to US$1.39 billion, while margins have also expanded meaningfully by 530 bps year-over-year to 24%. Moreover, in the earnings call, CrowdStrike’s management highlighted that the group has been selected by both Anthropic and OpenAI to secure frontier model deployments; and CrowdStrike has experienced a surge in customer engagement, with every customer conversation centred on AI protection and readiness. As a result, its AIDR (AI Detection & Response) products, launched in September 2025, has become the fastest-ramping product in CrowdStrike’s history, with its ARR (Annual Recurring Revenue) growing over 270% quarter-over-quarter. The strong momentum has enabled CrowdStrike to develop a record second quarter pipeline, and the company to raise its full year guidance. We continue to like CrowdStrike as the company is well positioned to benefit from incremental AI security budget, particularly when the AI related cybersecurity demand has been described as an “existential imperative” by CrowdStrike’s founder and CEO
Another June highlight was our headquarters visits to numerous tech companies including Applied Materials, Marvell Technology, Nvidia, Intel, AMD, Sandisk, and Salesforce etc. in Silicon Valley. Overall, companies are enthusiastic about the long term potential of AI, with various management teams commenting that “we are only scratching the surface of AI capabilities” when they look at their current internal AI deployment. Moreover, all the companies have underscored strong demand for AI infrastructure, ranging across GPUs, CPUs, memory chips, optical components, substrates and power generation. Almost every hardware company is booked out for 2027 product deliveries, and the C-suites (group CEOs and CFOs) are now directly involved in supply chain procurement efforts given the shortage. Memory remains the biggest bottleneck for the industry, as the new clean room for additional capacity typically takes two to three years to construct; meanwhile an increasing number of customers and contracts are now under the LTA (long term agreement) structure, and provide enhanced earnings visibility for the memory makers.
Last but not least, Nike reported its fiscal fourth quarter results. While the group’s fiscal fourth quarter revenue declined by 4% on a currency-neutral basis, the earnings have exceeded consensus expectations on both revenue ($10.97B vs. $10.85B consensus), as well as EPS ($0.72 vs. $0.12 consensus), even when excluding the one-off $0.52 tariff refund benefits on the EPS. In the quarter, wholesale sales grew 1%, while Nike Direct declined 9%. North America delivered a 3% currency-neutral gain yet Greater China and EMEA were still under pressure. Category wise, Nike Sportswear and Jordan Streetwear continued to struggle; meanwhile Nike Running and ACG (All Conditions Gear such as outdoor/trail) have sustained good momentum. Looking ahead, Nike has maintained its EPS guidance for calendar 2026, but within that, the group has lowered the sales outlook, which is then offset by better gross margin expectations. in the earnings call, Nike’s management acknowledged that turnaround is taking longer than expected, but remain confident in the potential inflection in calendar 2027 as the group readies for potential launch of various product innovations next year. Nike is also holding an Investor Day on 16–17 November 2026 to elaborate more on the strategy and new products.
PERFORMANCE
In June 2026, the LO Funds-World Brands EUR P was +2.50% (reference portfolio in EUR) while the MSCI World EUR was up 1.34%. The outperformance was primarily driven by strong security selection effects, which contributed +2.65%, partially offset by headwinds from asset allocation and FX effects. The portfolio maintained meaningful overweight positions across key growth sectors. The shift from consumer discretionary brands to tech brands at the end of March, continued to support performance this month. We are still overweight in consumer discretionary brands but at a lower level compared to the history of the fund. Our three largest overweights are:
1) Information Technology (45.19% vs benchmark 30.36%) delivered 3.04% return, compared to the benchmark sector return of -1.67%, with outperformance mainly generated by security selection effects of +2.18%, while asset allocation was -0.27%
2) Communication Services (10.76% vs benchmark 8.28%) generated -6.97% return vs the benchmark sector declined -7.81%. Security selection contributed a modest +0.12%, while the overweight position detracted -0.16% from the allocation effects.
3) Consumer Discretionary (14.57% vs benchmark 8.94%) resulted in -6.47% return vs benchmark sector at -3.52% return. Security selection effect was -0.50%, and allocation effect was -0.17%
The portfolio’s outperformance was driven by the fund’s positive stock selection, particularly with tech brands: Marvell Technology's strong rally — catalyzed by Nvidia's endorsement, S&P 500 inclusion, and AI product launches — alongside Caterpillar's AI-infrastructure and tariff-driven surge and SK Hynix's AI memory momentum, collectively anchored the portfolio's outperformance. The gains were partially offset by Applied Materials, in which we had a near-zero position for most of June against a meaningful rally of the stock; as well as Hyundai Motor, which was negatively impacted by labour disruption.
The top five contributors in June include: Marvell Technology, Caterpillar, SK Hynix, Microsoft (underweight vs. benchmark) and Shinsegae; while these 5 holdings have contributed negatively in June: Applied Materials, Hyundai Motor, Weichai Power, Minimax, and Alibaba Group.
OUTLOOK:
The LOF – World Brands fund owns a high conviction portfolio of growth businesses around the world that are structural winners and have pricing power. Looking ahead, the fund’s holdings have very strong financial metrics which significantly exceed the MSCI World benchmark. The expected revenue growth of the fund's holdings is 38.4%, compared with the 22% expected from the MSCI World Index. The expected EPS growth is 58.1% for the fund versus 25.9% for the MSCI World. The ROE of the holdings is on average at 32.5% vs. the reference index MSCI World at 31%. The forward P/E for the fund is 20.9x (MSCI World at 19x). The PEG ratio continues to be very attractive. The market generally expects a strong Q2 earnings season starting in mid-July.
The portfolio's strong outperformance in June was primarily driven by successful security selection in names like Marvell Technology and SK Hynix, which generated substantial alpha. Our consumer brands positioning still faced some headwinds given the market’s limited conviction in the consumer macro backdrop, although we have seen some optimism on the back of strong wealth effects in South Korea, Taiwan and the US. Some incremental spending might lift revenues in these regions for some of our luxury brands and Korean luxury department stores. We have seen some market volatility especially in the AI ecosystem names since the end of June, and we have been managing the risks and rebalancing our tech book ahead of the Q2 reporting season starting in mid-July.
condividi.