The International Growth Fund finished the month down -2.8% vs the benchmark which was down -0.2%.

Tencent (+19%) rallied alongside the wider Chinese tech sector. Chinese AI startup DeepSeek’s release of an AI model that perfromed on par with leading US AI models ignited investor enthusiasm. Tencent is already benefiting from AI-driven technology in its advertising business and is now rolling out AI features into its WeChat app. Sentiment was further boosted by a more supportive stance from the Chinese government, with President Xi Jinping meeting tech leaders during the month. This follows several years of intense regulatory oversight in the private tech sector.

Alphabet (-17%) sold off during February on weaker than expected results from Google Cloud and an unexpected step up in Capex. Alphabet’s Search and YouTube businesses were better than expected. Google Cloud reported the first deceleration of growth in four quarters. Like peers Amazon and Microsoft, Google Cloud is datacenter capacity constrained and struggling to meet AI demand. As a result, Alphabet materially increased its expected cCapex spending for 2025 to $75b from $52b in 2024. With slowing Google Cloud revenue growth, investors are questioning the future return on this large Capex investment. Alphabet continues to gain good momentum with AI Overviews, which has complemented existing Search volumes with consumers searching more often and with new queries.