We were featured in the Australian Financial Review discussing our strategic pivot on software stocks amid AI disruption. As a global equities fund managing portfolios in an increasingly AI-driven market, we've witnessed firsthand how artificial intelligence is reshaping traditional business models and investment strategies.
Following Anthropic's release of Claude's legal tool, global software stocks experienced significant sell-offs, with companies like Xero and WiseTech Global falling 13.1 per cent and 8.3 per cent respectively. This market reaction prompted us to reassess our investment thesis. Thomas explained his revelation during the Christmas break:
"I did a lot of coding on the Christmas holidays, and came back and thought, actually, things have changed."
After sharing his findings with Armina, we quickly shifted from a long position to shorting software stocks. Armina noted that DIY AI solutions don't need perfection – being "good enough" creates substantial disruption. As she emphasised:
"It feels like you need to be able to change your mind a lot more in this market. And that's not being flaky, that's being flexible."
This flexibility in portfolio management is essential for fund managers navigating unprecedented technological change. Our analysis now incorporates deeper assessment of AI's impact on competitive intensity and margin compression across sectors.
To read the article, click the link below.