During the second quarter of 2026, the market showed a distinct preference for enterprises whose profitability gains stemmed more from fleeting industry shortages than from robust, long-term competitive strengths. Our investment approach, however, remains focused on identifying businesses poised for success across a spectrum of potential outcomes, particularly concerning the burgeoning field of artificial intelligence. This strategy allows us to maintain a stable portfolio irrespective of the precise growth path of AI-related expenditures.

This period also marked significant financial events, including the initial public offering of SpaceX on June 12, an event that became the largest IPO to date. However, the substantial valuation commanded by SpaceX necessitates optimistic projections regarding its market penetration, operational efficiency, capital demands, and enduring business value, which presents considerable investment scrutiny. Concurrently, the Global Equity composite experienced a 10.6% increase before fees, trailing the MSCI ACWI Index's 15.1% gain, reflecting the nuanced market conditions.

The first half of 2026 was largely characterized by considerable supply chain disruptions. These issues ranged from the global oil crisis, exacerbated by geopolitical tensions in Iran, to an intense competition for data center resources among leading technology firms. Such scarcities underscore a critical vulnerability in global economic structures and highlight the importance of strategic positioning in volatile markets.

In this dynamic environment, a disciplined investment philosophy is crucial. Focusing on companies with intrinsic value and adaptability allows for resilience against market fluctuations driven by short-term trends or external shocks. True success lies in fostering sustainable growth through innovation and strategic foresight, not merely capitalizing on temporary market anomalies.