2026/04/30 - Insights
Q1 2026 Portfolio Management Report
Q1 2026 | Portfolio Management Report The insight fund allocators are missing This quarter's report addresses a blind spot that pervades the industry. Precious metals continued to dominate investment outcomes in Q1 2026, as they did throughout 2025, and active portfolio returns cycled sharply around the benchmark depending on sector positioning. Against that backdrop, our portfolios delivered consistency rather than the feast-or-famine outcomes prevalent in the market. But rather than simply tabulating returns and their causes, we use this report to examine something more consequential: the asymmetry between errors of commission and errors of omission. Most fund allocators and portfolio managers underestimate, by orders of magnitude, how severely the latter damages long-term investment outcomes. In this report, we cover three dimensions of omission that define portfolio outcomes over the long term: Compounding as an error of omission. Why value-style investors consistently underperform by avoiding quality compounding businesses, and what the mechanics of See's Candy reveal about the pay-off of finding needles in a haystack. Timing the market as an error of omission. Why being out of the market on its best days is far more destructive than sitting through its worst, and why the best days to invest consistently occur during bear markets. Lack of diversification as an error of omission. How diversification across idiosyncratic, macroeconomic, and sector factors protects against the structural deficiencies of the JSE, and why overreliance on any one factor imposes insurmountable opportunity costs. We also provide updates on our two global equity strategies. The Quality Growth Fund, with its high-conviction, high-tracking-error approach, continues to demonstrate resilience relative to other global equity offerings in the local market, and we outline why we believe relative underperformance has bottomed out. The Global Top 100 Quality Companies Fund, our low-tracking-error core proposition, has outperformed the MSCI ACWI by a cumulative 25% since inception. Finally, we revisit two live case studies in the dynamic interplay between Quality and Valuation: The Trade Desk and Asics. One illustrates how growth can slow while Quality remains intact; the other demonstrates how correctly calibrated Quality can render a high purchase multiple cheap in hindsight.