EU‑UK Portfolio
Q1 2026 · January – March 2026
Macro & Market Context
For the full macro and market environment commentary, please refer to the Emit Capital Global Opportunities Portfolio Q1 2026 Quarterly Report.
That report covers the Q1 Iran conflict, global oil shock, sovereign bond market analysis, the Emit Nexus investment thesis, and the full cross-asset review.
The key macro developments that shaped portfolio outcomes in Q1 2026 — the Iran conflict and Strait of Hormuz closure, the global oil price shock, the synchronised repricing of sovereign yield curves across the US, Germany and Japan, and the central bank pivot from accommodation to hawkish restraint — are covered in full in the Global Opportunities Q1 2026 Quarterly Report. This supplement focuses on the portfolio-specific performance, positioning, and outlook for the EU-UK Portfolio.
Portfolio Performance
Performance Summary — AUD Returns to 31 March 2026
| 1 Mth | 3 Mth | 6 Mth | 1 Yr | SI (Total) | |
|---|---|---|---|---|---|
| EU-UK Portfolio | −2.2% | +8.2% | +13.1% | +35.2% | +31.6% |
| STOXX Europe 600 | −6.9% | −5.9% | −0.6% | +8.9% | +8.2% |
| Active Return | +4.7% | +14.0% | +13.7% | +26.3% | +23.4% |
Performance is net of fees. Based on the aggregation of all managed accounts. Individual account performance may vary.
The EU-UK Portfolio delivered a strong +8.2% (AUD) for Q1 2026, outperforming the STOXX Europe 600 by +14.0 percentage points. A closed position in ASML Holdings was the largest single contributor at +250 bps, exited during the quarter as the stock re-rated on AI semiconductor capital equipment demand. RWE (+132 bps) and Siemens Energy (+95 bps) delivered the strongest returns among current holdings, both benefiting from the European energy security crisis and the accelerated re-rating of grid and power infrastructure assets. SSE (+72 bps) and Prysmian (+51 bps) completed a strong top five.
The primary detractors were Schneider Electric (−58 bps), Acciona (−56 bps), and Rexel (−30 bps), where industrial and distributor names faced headwinds from the ECB rate hike repricing, partially offsetting what was otherwise an exceptionally strong quarter for European energy transition assets.
Growth of $100,000. Approximate inception NAV series used for illustrative purposes.
Portfolio Analytics
Top 5 Contributors — Q1 2026
| # | Holding | Sector | BPS Contrib. |
|---|---|---|---|
| 1 | ASML Holdings (closed) | Technology | +250 bps |
| 2 | RWE AG | Utilities | +132 bps |
| 3 | Siemens Energy | Utilities | +95 bps |
| 4 | SSE | Utilities | +72 bps |
| 5 | Prysmian | Industrials | +51 bps |
Top 5 Holdings — Portfolio Weight
| # | Holding | Sector | Port Wt % |
|---|---|---|---|
| 1 | Iberdrola | Utilities | 7.2% |
| 2 | Schneider Electric | Industrials | 6.6% |
| 3 | SSE | Utilities | 6.4% |
| 4 | RWE AG | Utilities | 6.2% |
| 5 | Siemens Energy | Utilities | 6.1% |
Regional Outlook & Positioning
The EU-UK Portfolio targets high-conviction exposure to European and UK listed equities at the intersection of electrification, grid build-out, renewable integration, and energy-efficiency infrastructure. Q1 2026 demonstrated the portfolio's resilience in a difficult environment for European equities, with the utility-heavy positioning and active overlay generating strong outperformance despite the sharp industrial sell-off driven by ECB rate hike repricing.
The EU-UK Portfolio is positioned to capitalise on structural investment themes within its regional universe, supported by the portfolio derivatives overlay which provides active downside risk management and tactical flexibility across market regimes.
Key Positioning Themes — Q2 2026
- RWE and Siemens Energy are the highest-conviction current positions following their Q1 outperformance (+132 bps and +95 bps). Both are direct beneficiaries of the European energy security crisis and the accelerated grid investment that follows.
- Iberdrola (7.2% weight, largest position) contributed only modestly in Q1 (+23 bps) despite its structural positioning; the long-term contracted renewable and grid asset base makes it a core holding through volatility.
- Reassess Schneider Electric (−58 bps) and Acciona (−56 bps) on any stabilisation of the ECB rate hike narrative. Both have strong earnings fundamentals that the Q1 rate shock temporarily overshadowed.
- Monitor ASML as a potential re-entry candidate. The position was closed during Q1 contributing +250 bps; any valuation pullback on AI capex scrutiny would present a disciplined re-entry opportunity.
- Add to Prysmian (+51 bps) and EDP Renováveis (+43 bps) selectively. Both sit at the intersection of grid cable infrastructure and renewable energy, directly exposed to European grid investment acceleration.
Portfolio Facts & Structure
| Name | Emit Capital EU/UK Portfolio |
| Structure | Separately Managed Account (SMA) |
| Investor Type | Wholesale |
| Asset Class | European & UK Listed Equities |
| Regions | Europe, United Kingdom |
| Benchmark | STOXX Europe 600 |
| Strategy Inception | 28 February 2025 |
| Holdings | 15–25 positions |
| Cash Range | 5–15% |
| Minimum Investment | A$250,000 or equivalent |
| Pricing | Daily |
| Prime Broker | Interactive Brokers (IBKR) |
| Currency | AUD / USD |
| Allocation in Global Opps | 25% of Global Opportunities Portfolio |
| Manager | Emit Capital Asset Management Pty Ltd |
| AFSL / ABN | 551084 | ABN 57 652 326 237 |
This portfolio is one of five strategies managed by Emit Capital Asset Management. For the full firm overview and Global Opportunities Quarterly Report, visit emitcapitalam.com.