Alma Electron Global Fund

Market Review and Outlook

The Fund was negative in June with a performance of -0.8%, underperforming the MSCI World Utilities, MSCI All Country World, and S&P 500 Indices. Global equity markets posted strong performance in the second quarter of 2026, driven by the resolution of the Iran conflict, relief in oil prices, and robust AI and semiconductor demand. The first two months of the quarter were characterized by a ceasefire relief rally and a swift rotation into growth sectors led by technology and semiconductors. June brought a reversal of leading sectors: oil prices fell as a result of the peace deal, breadth expanded and capital rotated back into cyclicals, with industrials, healthcare, and materials the primary beneficiaries. Corporate earnings for Q1 were strong, with 85% of S&P 500 companies beating estimates, well above the five-year average according to FactSet. On the policy front, Kevin Warsh was sworn in as Federal Reserve Chairman in May, succeeding Jerome Powell. Inflation ran hot during the quarter. The April CPI accelerated to 3.8% and May CPI rose further to 4.2%, driven largely by elevated energy costs tied to the war. Lower energy prices following the Iran peace deal should provide some near-term inflation relief, though markets are now pricing in at least one rate hike by year-end.

Notable contributors in June included long positions in Flex, Entergy, and Panasonic. Notable detractors included long positions in Constellation Energy, Primoris, and Sigenergy.

– Flex, a leader in power modules for data centers, delivered strong share performance in June. On the company’s fiscal fourth quarter call in May, management announced a spin-off of the data center business and introduced growth targets exceeding market expectations. We believe growth in the data center business will continue to beat expectations and are confident in further upside to the stock.
– Entergy, a US-based electric utility, was a strong contributor during June. On the company’s first quarter earnings call in April, management raised capital expenditure guidance by 33% vs the previous projection, and they raised the earnings per share growth outlook to 13% vs 11% prior. This is a clear example of our accelerating power demand thesis playing out in utilities’ earnings profiles. We believe utilities across the U.S. will continue raising capex and EPS projections, and we expect our utilities exposure to outperform as this plays out.
– Panasonic was a strong contributor during June. Panasonic is a Japanese equipment and appliance manufacturer with leadership in batteries for electric vehicles and battery backup units (BBU) used in data centers. The company benefits from accelerating data center demand for their BBU product, and they are a beneficiary of corporate governance reform. Panasonic has divested or discontinued operations in unprofitable parts of the business to better streamline operations and focus efforts on more profitable and high growth end markets. We expect shares to continue benefitting from data center demand and their enhanced focus on select end markets.

Despite a noisy quarter between peace deal negotiations and higher inflation, enthusiasm in the accelerating power demand theme persists. Robust Q1 earnings across the utilities and infrastructure sectors confirms that the power demand theme is driving real fundamental improvement for the stocks in our universe, and our conviction in the thesis continues to strengthen.

Markets are always uncertain, but we seek to generate alpha for our investors with the same persistence as we have throughout our 20-year history.