The Evenlode Global Equity fund returned -1% in February 2026 (GBP terms) while its comparator benchmark, the MSCI World index returned +2.8%. The February return belies an extraordinary sequence of events intramonth. A panic on 3 February triggered by the announcement of new Anthropic vertical market plug-ins hit many fund holdings hard but was almost fully reversed by month-end. There were further nervous outbreaks caused by, respectively, the Twitter account of a small startup founder and by an independent stock-picking newsletter, but these had broader impacts, reflecting concerns that AI could cause a deflationary spiral embracing the whole economy. It may turn out that the Anthropic driven sell-off marked the peak of AI anxiety specific to data and software companies, replaced by more general fear on the rational calculation that future improvements to AI powerful enough to disrupt the most resilient of companies would have disastrous consequences for the entire corporate universe.

This twitchy pricing is unsurprising given that we are all still digesting the impact of AI technology. Share prices have marked the chaotic evolution of market consensus on who is a winner and who is a loser. Alphabet is the clearest example of this instability, having gone from nailed-on loser to the clearest winner in the entire index in the space of eight months. Volatility this extreme is guaranteed to produce large buying opportunities, which in the long term are good for active managers although horribly painful in the short term. The management teams we speak to are both bewildered by current share prices and extremely confident of their future. They are putting their money where their mouths are.

The 2025 reporting cycle showed the continued indifference of the portfolio’s operational momentum to the stock market’s perception of it. Growth in revenue, Earnings per share, and adjusted EBIT¹ accelerated sequentially vs the rest of 2025 and continues to outpace the MSCI World index. All the negative performance of portfolio companies of the last two years has come in declining earnings multiples versus the index rather than inferior earnings growth.

The incremental buyer of these companies is increasingly the companies themselves, as their copious excess cashflow generation funds ever larger share buybacks. At current levels these are instantly highly accretive. Consensus expects 2 points of per share accretion from buybacks on top of 11% group earnings growth for the portfolio in calendar years 2026 and 2027². Bear in mind 1) the value of shares retired now compounds over time, and 2) further share price weakness will mechanically drive bigger per-share earnings accretion as well as likely triggering even more buybacks. Every quarter that the market waits for evidence of AI-driven disruption is another quarter where more shares can be retired at bargain prices.

1 Earnings before interest and tax

2 Source: Visible Alpha