Despite 2026 being characterised by explosive geopolitical conflict, rapidly fluctuating oil and energy prices and occasional sharp market selloffs, tech has remained a dominant theme for most of the year, making it challenging for investors to keep up.
For example, the MSCI ACWI Information Technology and Communication Services index has still nearly doubled the performance of the wider MSCI ACWI even after the sell-off last month, according to FE fundinfo data.
However, a willingness to go off the beaten track can still be rewarded even in this tech-heavy market, according to Dan Higgins, portfolio manager of Majedie Investments.
“I’d much rather be considered unfashionable than be wrong and cool,” he told Portfolio Adviser.
This approach seems to be paying off with the trust up 24.8% year to date, well above the benchmark average, despite holding just 25% of the portfolio in tech-dominated regions such as the US.
Investors, he warned, are risking getting swept up in the rise of semiconductor and chip stocks this year and losing sight of the fundamentals.
“It’s human nature, when things start going your way you think you’re a genius, and when it’s not you think it’s because the market just doesn’t get it.”
This is only compounded by market inefficiency, which has essentially turned markets into a “short-term narrative machine,” according to the Majedie manager.
“Well over two-thirds of the daily market volume in equity markets is from non-fundamental participants,” he said. “It’s algorithmic trading systems, ETFs, derivatives or highly levered pod shops that will get shut down if they lose 5% or 8%.”
“You really have two choices as an investor to deal with that; you can either try and get ahead of it, or you can accept that just because you don’t know why a stock is up or down on a given day, doesn’t mean anyone else does either”, the Majedie manager said.
To that end, he argued it was important to invest “probabilistically” or target areas where the rate of change looked to be most heavily tilted in investors’ favour.
“You need to have a margin of safety, and you can only get that in areas where things are incrementally getting better, rather than worse.”
This is part of the reason why he has been (comparatively) avoiding US equities this year, he explained. A crucial thing to consider about US assets was the net international investment position, or the gap between the amount of US assets owned by international investors and US investors’ ownership of non-US assets, he said.
“Post-financial crisis that number was -$1.3trn, in other words we owned $1.3trn more US assets than they owned our assets,” he said. “Now that number is -$28trn, so since 2009 roughly 26trn pounds, euros, yen or so have gone into the US.
“I think that’s unlikely to repeat and if that changes even a bit, it could have profound implications for overlooked international opportunities.”
As a result, the team has favoured other areas of the global market, such as Asia. In the portfolio’s June 2026 update, Higgins noted some of the strongest contributors to the trust’s recent performance included one of their specialist Chinese funds and a Korean activist fund.
This focus on investing where the “rate of change” was most attractive has also caused the team to shift some allocations this year as markets were hammered by geopolitics and rising oil prices.
See also: Oil up again as Iran hits back and bond market seeks clues from Burnham
For example, he explained the team re-added to its copper exposure, having pulled profits last year. One stock they owned within this space was Weir Group.
“I think a lot of people still think of it as an oil services business, but it has sold off almost all of their oil business and are now focused almost exclusively on providing equipment and parts to the copper mining industry.”
Another area that looked selectively exciting was software, which the team was primarily exposed to through external investment managers.
“It’s probably not escaped anyone’s notice that the market narrative is that every software company is an AI loser and many will not be around in a few years,” he noted.
But this was not a “back up the truck” moment in software, and while a handful would be structurally challenged, many with in-house data sets are likely to remain profitable for years to come, he said.
“These aren’t just things that clients can rip out and replace with something made by two guys using Claude in a garage.”
See also: Baillie Gifford’s James: The market is being too simplistic with software businesses
