May MegaTrend newsletter
In May, as geopolitical tensions eased and energy prices plummeted, risk appetite returned strongly to the stock markets, resulting in a favorable month and strong performance for the Fund. Thematic, technology, and AI-exposed segments outperformed, while the energy sector corrected in the wake of sharply falling oil prices. At the end of the month, however, another exchange of blows between the U.S. and Iran, followed by a 60-day memorandum of understanding, reminded investors of the persistence of geopolitical risk.
One of the month’s most significant developments, affecting the Fund’s entire thematic universe, was the unfolding wave of AI IPOs. SpaceX publicly filed its preliminary prospectus for an IPO targeting a record valuation of approximately $1.75 trillion, with its debut expected in mid-June. The two leading AI labs, Anthropic and OpenAI, are also expected to go public before the end of the year. The capital requirements for building out AI infrastructure are enormous, and companies are finding it increasingly difficult to meet these needs through the private market, so they are turning to the public stock market.
This wave of capital raising has also spurred action among tech giants already listed on the stock market: Alphabet, Google’s parent company, announced an $80 billion stock offering to finance its AI investments. On the one hand, these offerings open up new, direct investment opportunities in AI players that were previously accessible only indirectly; on the other hand, the inflow of fresh capital must find a destination, which could temporarily cause a realignment of existing large technology holdings. This could act as a headwind to the performance of the MAG7 companies, in which investors are heavily concentrated.
Market valuations remain at historically high levels, but sustained, strong, double-digit corporate earnings growth remains a supportive factor. The risk continues to lie in geopolitics. A lasting agreement could further ease monetary conditions, while a renewed escalation could threaten to bring inflationary pressures and a decline in risk appetite.
During the month, we increased the Fund’s overweight position in the technology and AI infrastructure themes, which have maintained their strong momentum in recent weeks.
Return DownloadThis is a marketing communication. Making a well-informed investment decision requires obtaining detailed information. Please read the Key Information Document, the official prospectus, and the management regulations available at the distribution points of the Fund and on the website of the Fund Manager (www.vigam.hu) for detailed information regarding the Fund’s investment policy, distribution costs, and the possible risks of investing. Costs related to the distribution of the investment fund (purchase, holding, sale) can be found in the Fund’s management regulations and at the distribution points. Past performance is not a reliable indicator of future returns. Future returns from the investment may be subject to taxation, and tax and duty information relating to individual financial instruments and transactions can only be accurately assessed based on the individual circumstances of each investor, which may change in the future. It is the investor’s responsibility to obtain information regarding tax obligations.
The data contained in this information material are provided for informational purposes only and do not constitute investment advice, an offer, or investment consulting. VIG Investment Fund Management Hungary Ltd. accepts no liability for investment decisions made based on this information or for their consequences. The license number of the Fund Manager for alternative investment fund management (AIFM) is: H-EN-III-6/2015. The license number of the Fund Manager for UCITS fund management (collective portfolio management) is: H-EN-III-101/2016.