BMC Global Technology July 2026

The strongest contributors to the fund's returns for July were Microsoft, Amazon, and Allegro, while the weakest were SK Hynix, Intel, and AMD.

After June's high point, we witnessed a subsequent correction in many tech stocks during July. Much of this correction can be explained by high expectations, elevated lending in the system, and new scrutiny of the AI companies' returns on investment. All of this led to substantial share price drops for many tech stocks, primarily in Asia. South Korea's KOSPI, for example, noted a decrease of just over 22% for July. This was followed by a backlash at the end of the month, when a number of companies became far too cheap and reported solid figures for the second quarter. This has continued into the first week of August.

During this correction, we made several changes to the portfolio. Several of our holdings have turned especially attractively valued in a short time, and we acted, increasing in some of the fund's Asian holdings, such as Mediatek, Taiwan Union, and Fujikura. In other words, we've made the most of the adage "Never let a good crisis go to waste." Nothing has changed fundamentally when it comes to AI, though. The underlying growth remains robust, and the hyperscalers responded to scrutiny of returns on investments by reporting superb growth in their cloud services (Microsoft +43%, Google +82%, Amazon +37%).

In addition, more than half of the portfolio's companies have reported their second quarter figures so far. All have reported solid numbers that have been appreciated by the equity markets. We anticipate a general acceleration for several tech companies as they increase production to be able to deliver equipment for the ongoing expansion of data centers. Visibility is incredibly high in many cases, owing to customers signing longer contracts to ensure supply chains. As a result, many companies have lifted their full-year guidance.

We are eager for the second half of the year, which we expect to be characterized by solid company reports, despite ongoing volatility. We believe the fund is packed with future winners for the next wave of AI: inferencing when AI models are used and implemented to a greater extent in companies' business models.

Key market events and trends

At first glance, July appeared to be a calm month, with the global equity market (MSCI World in EUR) dropping back by 0.6%. But this hides one of the year's most powerful sector rotations. Semiconductors fell by 20%, the South Korean equity market lost 30%, and Tesla was markedly down, while the US telecom sector rose by 15%, energy climbed up 8%, the finance sector saw a 7% rise, and everyday pharma was up 5%. 

This correction centered on AI-related topics. The greatest drop was seen in the AI and semiconductor spaces, plus the South Korean market, with its extensive exposure to memory chips. These have all been extremely popular, with increases of around 70% during the first half of the year. On top of this, we saw profit-taking, a more austere Fed under new chair Kevin Warsh, and a wave of liquidation of leveraged positions, including the Situational Awareness Fund being compelled to sell assets to meet the margin call. The underlying demand held firm, however, and reports from semiconductor companies and hyperscalers showed continued solid growth with rising revenue and profits. Overall, this appears to have been a healthy valuation correction of a structurally intact trend, rather than a sign of weakening fundamentals.

Estimates have been revised up—and our forecasts likewise. At the start of the year, we had forecast a total return of 10–15% for 2026. We raised this to around 15% after the convincing first quarter reports. And now—despite July's rotation—we see scope to lift it again, this time to 15–20%, given the second quarter results and updated valuations in play. This year's returns will be driven entirely by profit growth. The latest increases in long-term bond yields could pose a risk to keep an eye on, however, as if US 10-year yields surpass 5%, it could put pressure on share prices in general.

What do we anticipate for the fall? We expect the second half of the year to remain variable, the tone set by sector rotation rather than a broad-based general pickup. The underweight sectors—groceries, healthcare, telecom, and finance—seem to hold the best opportunities to continue making up lost ground, especially as many active investors are still underweight in these spaces. We would consider possible ongoing weakness in semiconductors as a buying opportunity, given the solid profit development expected there in 2026 and 2027. 

Portfolio changes

During July, we bought Swedish industrials company Munters, which benefits from a healthy investment cycle in data centers, given the greater need for cooling. We sold Deutsche Börse after its convincing share price increase this year. We also sold Oracle given its weaker performance, making space to move the capital into more attractive parts of the value chain.

The fund's positioning

The fund now comprises 41 companies exposed to a range of sectors and geographies, with companies chosen on their own merits. We do not limit ourselves to IT companies but also invest in those across various sectors benefiting from technology. We believe a concentrated but also diversified, actively managed global technology fund focused on stockpicking has all the prerequisites to deliver great returns to its unitholders over time.

*MSCI AC World NTR $ in EUR