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Investment letters
GLOBAL EQUITIES: CULTIVATING A BALANCED GARDEN OF GROWTH
Comgest's Global Equities Team - 10-Dec-2025
- The artificial intelligence (AI) boom has reshaped global equity markets, concentrating the MSCI AC World Index (ACWI) in a handful of US tech giants.
- As long-term investors, we prioritise growing portfolios rooted in diverse growth drivers, ensuring resilience beyond the AI.
- Comgest’s unconstrained approach spotlights quality growth regardless of sector or geography.
A BROAD SPECTRUM OF GROWTH
Rapid advancements in AI have led to unprecedented levels of concentration across global equity markets. As of October 2025, nine of the top 10 largest year-to-date contributors to the MSCI AC World Index were AI-linked companies. Yet beneath the surface, investors are growing increasingly concerned about diversification and earnings durability of these leading stocks.
Although several encouraging indicators suggest that the AI momentum could continue—including increased investment in datacentres, growing demand for computing power and expanding applications—potential headwinds remain. Signs of overcapacity, reduced funding, slower implementation and technological setbacks could quickly temper the current AI enthusiasm.
At Comgest, we recognise the pitfalls associated with concentration risk. Like any well-tended garden, our portfolios thrive on diversification and draw strength from a mix of structural growth drivers. Rather than only planting our portfolio with AI stocks, we seek to cultivate resilience through other sectors such as healthcare, critical data, consumer products and industrial gases. This balanced approach underpins our Global Equity strategy and aims to deliver consistent returns over the long run.
