Inside Alaamry Global Capital’s Contrarian 2025 Strategy
In a year marked by geopolitical tension, trade friction, deglobalisation narratives, and persistent macro uncertainty, global equity markets delivered a powerful reminder that fear and performance are rarely aligned.
Alaamry Global Capital generated a gross return of 26.3 percent in 2025, outperforming the S&P 500 at 17.9 percent and the MSCI ACWI at 22.9 percent. What stands out is not only the outperformance, but the disciplined philosophy behind it.
A Market That Climbed a Wall of Worry
Throughout 2025, markets navigated wars, tariffs, interest rate concerns, and growing global fragmentation. The macro narrative remained tense and unpredictable. Yet corporate fundamentals told a different story. Revenues expanded, earnings improved, and cash flows strengthened across many businesses.
Performance comparisons for the year illustrate the broader landscape:
- AGV Capital: 26.3 percent
- MSCI China: 31.4 percent
- S&P 500: 17.9 percent
- MSCI ACWI: 22.9 percent
- Hang Seng Index: 27.8 percent
The firm’s edge came from conviction in areas where sentiment was weakest.
The China Thesis That Delivered
In 2024, approximately 86 percent of the portfolio was allocated to Chinese equities, a decision that ran counter to prevailing global consensus. At the time, many investors viewed China as structurally challenged and politically risky.
By 2025, that contrarian positioning proved decisive. The MSCI China Index delivered a 31.4 percent return, significantly outperforming the S&P 500.
At the same time, US markets became increasingly concentrated. The so called Magnificent Seven accounted for roughly 34 percent of S&P 500 market capitalization and contributed about 42 percent of total returns. Without those names, the index would have delivered closer to 10 percent.
Alaamry Global Capital compared a basket of leading Chinese companies including Alibaba, BYD, Tencent, Baidu, PDD, and JD.com with the US Magnificent Seven. In 2025, the China basket returned approximately 30 percent versus about 22 percent for the US group.
The lesson was clear. Strong returns did not require chasing fashionable narratives. They required buying high quality businesses at attractive valuations.
A Holding Company Mindset
The fund approaches investing as if it were acquiring slices of real operating companies. Rather than focusing on tickers, it aggregates the underlying fundamentals of its holdings, translating ownership into revenue, earnings, and free cash flow per fund unit.
In 2025, portfolio companies grew revenues by 30.1 percent and earnings by 31.0 percent in US dollar terms. This growth significantly exceeded that of major global benchmarks. Importantly, the 26.3 percent fund return was driven almost entirely by earnings expansion rather than rising valuation multiples.
Strong Returns Without Paying Up
Despite strong performance, valuation multiples remained disciplined. The portfolio’s price to earnings ratio declined from 11.9 times to 10.7 times. Price to sales fell from 0.9 times to 0.8 times.
Compared with global indices, the discount remains meaningful. The portfolio trades at 10.7 times earnings versus 28.0 times for the S&P 500 and 22.4 times for the Vanguard Total World Stock Index. Dividend yield stands at 2.9 percent compared with 1.3 percent for the S&P 500.
Higher growth, higher quality, and lower valuation is a rare combination in global markets.
Improving Portfolio Quality
Valuation alone does not define opportunity. Portfolio quality improved materially in 2025. Return on equity increased from 17.8 percent to 22.3 percent. Return on capital employed rose from 16.9 percent to 20.2 percent.
Relative to benchmarks, the portfolio demonstrates stronger capital efficiency. Portfolio ROE of 22.3 percent compares favorably with 18.4 percent for the S&P 500. These metrics reflect disciplined capital allocation and durable business models.
Geographic Expansion with Discipline
China remains the largest allocation at 76.9 percent, reduced from 86.6 percent the previous year. The fund introduced new exposure to Brazil at 3.9 percent and Denmark at 3.1 percent. US allocation increased modestly to 14.0 percent.
Diversification was driven by opportunity rather than geography. Capital flows where quality and valuation intersect, not where headlines are loudest.
Sector allocation remains balanced across consumer cyclicals, technology, healthcare, financials, and industrials, reinforcing business model diversification alongside geographic expansion.
Alignment and Forward Outlook
Earnings growth above 30 percent, valuations well below global averages, and stronger returns on capital collectively drove the 26.3 percent result. Management estimates that the portfolio still trades at roughly a 30 percent discount to intrinsic value.
Total shareholder yield stands at approximately 4.8 percent, combining a 2.9 percent dividend yield and a 1.9 percent buyback yield.
Perhaps most importantly, leadership invests alongside shareholders. Personal capital has been increased, reinforcing alignment and long term conviction.
The Philosophy
The framework remains straightforward:
Own high quality companies with durable competitive advantages
Partner with management teams aligned with shareholders
Pay prices that provide a margin of safety
Look globally for opportunity rather than following consensus
In a year dominated by noise and concentration risk, Alaamry Global Capital demonstrated that disciplined global investing rooted in fundamentals and valuation can still outperform narrative driven markets.
For long term investors, 2025 was not about chasing momentum. It was about fishing where the fish are.
