HL Select Global Growth Fund – Q4 2025 Review

Market Review

Global equity markets made further progress in Q4, with the MSCI World Index delivering a total return of 3.2%. Investor sentiment was buoyed by signs that economies were coping with the new tariff regimes, with modest growth and easing inflation. This allowed major Western central banks to ease interest rates further in December.

Health Care stocks led markets higher, with the global sector adding almost 11% in value. Real Estate was the only losing major industry, declining by 2.2%. Commodity price strength, from precious metals to copper helped mining stocks to advance, whilst financial services benefited from lower interest rates. Technology was something of a laggard, advancing by just 1.4% as a degree of scepticism over AI emerged.

The Winners

Alphabet, the parent company of Google was far and away the largest positive contributor during Q4 adding 1.1% to the value of your fund. Not long ago Alphabet was seen as at risk from AI, which it was felt could threaten the value of Search. However, as it became clear that Google had deftly integrated the group’s own AI capabilities into the core search engine sentiment turned sharply, enabling the stock to rally strongly.

With signs that tariffs were failing to seriously disrupt much of global trading activity the luxury sector enjoyed something of a relief rally and LVMH as the largest player benefited accordingly. We think the picture remains somewhat clouded, for many brands moved stock around the globe in advance of tariffs taking effect. As these positions unwind we should get a clearer view, but it appears that customer demand for luxury goods remains strong.

As mentioned previously, Health Care was the strongest sector during Q4 so it is unsurprising to see sector stalwart Danaher joining in. Their Q3 earnings report delivered growth ahead of market forecasts, with a solid outlook for the year ahead.

API Group has been one of the fund’s stronger performers in 2025 and this continued through Q4. The group provides safety services around the world, with sales often driven by regulatory imperatives. This gives it a solid base of dependable turnover. Recurring revenues like these are a quality that we value highly because they can reduce volatility of earnings and make higher growth rates achievable.

Amphenol delivered another solid performance, cementing its position as our most successful investment in the fund’s history. The company delivered well received Q3 results, driven by strength in their communications division. Amphenol’s product range gives them exposure to the massive growth in datacentre building in the US and elsewhere. Their products both ease the delivery of power onto site and the pace of data transmission around the centres too. This should provide the group with strong underlying demand for some time.

The chart highlights the five strongest contributors to performance this quarter. Hover over each bar for more detail.

The Losers

Fiserv Inc. delivered a sharp profit warning and effectively admitted that it had previously overstated its performance. Fiserv had previously seen its CEO depart to take up a position in the Trump administration. Perhaps we should have viewed that and some earlier weakness in guidance as a warning flag. Either way the company has sharply lowered its expected growth, including within its key Clover payments business which we regarded as core to the future value of the group. We had at least reduced the position earlier in the year, which limited the impact and we have now fully exited from the position.

Microsoft is a large position so small changes in its price tend to impact on the value of the fund. The stock suffered a little from a more sceptical approach by the market toward AI players but we are not aware of any tangible reasons for the modest drop in the share price during Q4.

Phreesia continues to act as a drag on performance. We have had great hopes for the long-term value of their technology, which helps improve the operational and financial performance of health care practices, predominantly in the USA. However, transforming this potential into profit has taken far longer than we originally anticipated when we invested back in 2020 and Phreesia has been a meaningful drag on fund performance over the years, despite a promising start.

Motorola Solutions struggled between September and mid-December but has been mounting something of a recovery since. We are at a loss to understand the reasons for the drop in the share price, which fell from just over $480 in September to a low of $363 in mid-December. We see little prospect that their activities, which span the production of communication handsets and network equipment for Police, Fire, Ambulance and other vital services, being disrupted by AI. Nor do we see any shift in the competitive balance versus other existing competitors. The simple truth may be that the stock had simply become too expensive for some holders, but we would argue that there are few companies out there with Motorola Solutions to keep compounding earnings far out into the future.

Australia’s Car Group has been struggling since August. The business is essentially a digital vehicle marketplace, roughly analogous to Auto Trader of the UK. That’s been weak too, since August and that in turn seems to tie in closely with Rightmove’s profit warning issued back then. That warning revealed a need to invest more deeply into the Rightmove’s technology to keep it up to date. We suspect that the market is tarring other online marketplaces with the same brush, without looking at the opportunities specific to Car Group’s international market positions.

The chart highlights the five weakest contributors to performance this quarter. Hover over each bar for more detail.