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This commentary reflects the investment opinions and views of Phronimos Investments and should be read in the context of our investment strategy, which is intended for Wholesale and Sophisticated investors only. Any views or opinions expressed here are not intended as investment advice and do not take your personal circumstances into account. We strive to be factually accurate, but we do make errors from time to time. We typically comment only on securities that we currently own and therefore our interests may diverge from yours. Our views may also change with the passage of time, due to changing circumstances and security prices, and we make no commitment to update any previously expressed views. Please conduct appropriate research or consult a financial advisor before taking any action based upon anything you might read here.   

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investment resilience

  • Writer: Phronimos
    Phronimos
  • Feb 5
  • 2 min read

The recent turmoil in some corners of the equity market and certain other asset classes has had virtually no impact on the value of our portfolio, which remains up just under 2% in 2026 to date.


The Nasdaq is down nearly 5% over the past five trading sessions and since the beginning of the year the S&P500 Software sub-sector is down around 20% amid fears of AI disruption.


S&P500 Software and Services Index - 2026 YTD



Firms that rely on providing data and analytics, and which have formerly been viewed as high quality businesses have been similarly hard hit. And despite AI doing the disrupting investors have also been shaken by the truly extraordinary levels of capital investment the hyperscalers are planning for 2026 - Alphabet's $180bn and Amazon's $200bn being the most notable, management's confidence in the return on that investment notwithstanding.


And even the previous winners of that capital spending bacchanalia, such as Nvidia, have not seen the usual positive response gargantuan investments in IT infrastructure given increased competition from Alphabet (interestingly, TSMC, as the single most vital node in the entire semiconductor supply chain has remained unperturbed). Weakness has also spilled over in Bitcoin and precious metals, which one would previously have assumed have nothing to do with either software or AI.


The most obvious reason for the resilience of our portfolio is the fact we hold virtually no technology, software, precious metals and certainly nothing related to crypto. Our portfolio didn't benefit as these assets surged last year and it hasn't suffered in this recent weakness.

That's not to say our holdings won't be swept up in a scenario of broader market stress or that they don't face their own idiosyncratic risks. The latter will be much more significant for our performance given the relative concentration of our holdings.


We normally reserve disclosure of our largest 10 holdings for our quarterly investor letters, however, to better illustrate the above point the list is provided below as at 31 January.

Robertet SA

11.8%

Fielmann Group AG

11.5%

Berkshire Hathaway Inc

9.6%

Guaranty Trust Holding Company plc

7.6%

Spirax Group plc

7.3%

Novonesis A/S

7.2%

CarMax Inc

5.8%

Jeronimo Martins SGPS

5.6%

Halozyme Therapeutics Inc

5.1%

Chevron Corp

5.1%

As should be clear from the below the majority of our holdings are small to medium-sized companies concentrated in the consumer or industrial sectors with one or two exceptions. Chevron, for instance, is the result of our investment in Hess Corporation that was acquired.


 
 
 

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