MARKET COMMENTARY

We will discuss the first two months of 2026 later on, but this quarter, and possibly future ones, will be defined by the last third of this quarter. On 28th February, the assassination of Ayatollah Khamenei marked the onset of Operation Epic Fury – a name drawn from the Donald’s book of hyperbole.

2025 was another good year for investors. Stock markets (with one exception) enjoyed a year of strong growth, and other asset classes also delivered.

In June 2025 a start-up called Thinking Machines Lab raised $2bn at a $10bn valuation – the largest seed round in history. The company elected not to declare what it was working on.

In 1720 a company was launched “for carrying out an undertaking of great advantage, but nobody to know what it is”.

Much as an ageing heavyweight boxer loses speed and power after the early rounds, Trump’s war against global trade norms is slowing down.

At the end of the film “Burn after reading”, the CIA boss (played by JK Simmons) has a conversation with his deputy:
“What did we learn here?”
“I don’t know, sir”
“I don’t know either. I guess we learn not to do it again”
“Yes, sir”
“Though I don’t know what we did”
“Yes, sir. It’s hard to say”.

In the outstanding 2019 mini-series, Chernobyl, one of the final scenes is played out in the trial of the plant managers held responsible for the explosion.

The last three months the fund has performed positively. SORBUS VECTOR had a positive total return of 1.1% over a period when the MSCI UK IMI All Companies Index was down (0.6%).

Having signalled forthcoming rate cuts for nearly two years, and failing to deliver, the Fed finally got “on message” and cut base rates by 0.5% (50bps) in September.

We have made two new additions to the fund over the last couple of months:
Spectra Systems; and
Rightmove.

In the last two commentary pieces, we said that the direction of stock markets has depended on two questions:
1)Whither the Magnificent Seven (or Fab Five)?
2) Have markets fully absorbed that the period of declining and/or ultra low interest rates are behind us?
Repetitious as it may be, but these two questions persist.

Fund performance for VECTOR in February was rather disappointing, with the fund down (3%). The two main detractors over the month were PZ Cussons and Reckitt Benckiser.