Freedom Calls: 19/1/26, “Abu Dhabi investor event tonight (Monday 19th).... And Trump's world peace tour"

From the team at Freedom Asset Management

+++ This "Monday note" is coming out early because I am on an overnight flight to Abu Dhabi.  For those in Abu Dhabi, I look forward to seeing you at the event tomorrow +++

Abu Dhabi Investor Event tonight (Monday 19th)

It’s Davos this week, and my free ticket to this $40,000/head jamboree seems (again) to be "lost in the post”.  But forget Davos, the key event this week is our investor event in Abu Dhabi tonight.  

(L-R) Ramon Eyck (Opus Global Freedom and Managed Income), Justin Oliver (Opus Global Growth) and Cody Willard (US Technology VIP) will each be speaking and taking questions about a range of subjects including themes like healthcare, AI, emerging markets and of course geopolitics, over drinks and canapés at the Four Seasons Hotel in ADGM.  Unlike Davos, it's free and doors open at 1800.  It should be good fun - and it is not too late to register - just reply to this email and we will make sure you are on the list.

Greenland and Trump's "world peace" tour

I have come to the conclusion that it is pointless trying to write this Monday newsletter on Saturday.  In Trump’s world a lot can happen by Sunday morning.  So, I suppose we should not have been surprised that having (1) made his move on Venezuela 2 weeks ago, and (2) dabbled in Iran last week, that (3) Trump’s "world peace” tour has now ensnared a more dog-friendly neighbour, Greenland.  Whilst the dogs will be happy for the attention, the Greenlanders are less impressed.  If you read last week’s issue on Greenland, you will know my view, which is that basically that Trump has a point, even if we don't much like his approach.

My take on this week’s development is a simple one: Trump is being silly using tariffs - they could cause some economic harm.  If he waits this out longer, he will have more chance of getting a better version of what he wants.  And if he is really in a hurry, forget tariffs, just bring some sausages to distract the “Elite Sirius Dog Sled Patrol”!

Pictured: "Bought!"

Picture credit: Cheezburger.com

But we are not unduly concerned about where this goes from the perspective of geopolitics or markets.  Our basic view is that anything that makes the world safer and more predictable is better for markets.  And whether or not we are philosophically on board with the US taking control of Greenland’s foreign affairs, ironically, it would make the world a safer and more predictable place.  

Interestingly, the FT published a piece over the weekend titled “Beijing pours cash into Belt and Road financing in global resources grab”.  If anyone had thought that China was giving up on Xi’s big foreign policy initiative, think again.  According to the article, last year China signed 350 deals worth $213bn, up 74% on 2024.  The majority of these projects are in the fields of energy, metals and mining.  See chart below.  This is partly Trump’s point.

Source: FT 18/1/26 - China Belt and Road Initiative (BRI) Investment Report 2025, Christoph Nedopil Wang, Griffith Asia Institute, Green Finance & Development Center.  Total engagement refers to the combined value of construction contracts and investments

Performance - a quiet week

(For performance disclaimers - please see foot of email)

The markets were fairly quiet last week.  Just looking at the futures, we are not seeing much movement for Monday either on the back of Trump’s Greenland comments.

Last week, we held our first quarter Investment Committee on our flagship balanced fund, the Opus Global Freedom Fund.  This came hot on the heels of Charles and Ramon doing a tour of some of the largest investment managers in London to pick their brains.

What is interesting is the alignment of thinking - and they all expect a good year in 2026:

On Geopolitics - nobody seems to care anymore.  In the old days when missiles were fired, markets fell.  Now the view is that Trump's missiles make the world a safer and more predictable place and so markets are happier.

On the US - everyone believes there will be no recession in the US, and US equities will continue to have another strong year of earnings growth (as Justin wrote about last week).  Most believe we will be operating in a world of lower US interest rates.

On Europe - there is less and less interest here, except for defence stocks and some opportunities in value.

On China - technology names will continue to have a good run - as will the dividend plays in Hong Kong; at an economic level, President Xi will still have to contend with a slower economy, but he must be looking with great interest at what is happening in Greenland.

On Commodities - Gold miners are the big winners, so long as the mine owners don't squander all their new found profits on expensive M&A (like they have historically done at this point in the cycle).

Our articles this week:

Derek Akkiprik gives us the third in his series of articles on the opportunities in fixed income in 2026

Cannacord's Justin Oliver tells us that in the US Consumer Staples are showing signs of life

I shall be in Abu Dhabi and Dubai this week.  Whereever you are, please let me wish you a peaceful and wonderful week ahead,

Adrian

Co-Founder // Freedom Asset Management

Guernsey // Abu Dhabi // Hong Kong

M: +44 7781 40 1111 // M: +971 585 050 111 // M: +852 5205 5855

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"Opportunities in Fixed Income in 2026 - Part III - Credit and EM for 2026: coupon can carry returns, but spreads leave less room for error ”, 19/1/26

By Derek Akkiprik, Junior Investment Analyst

Credit can still deliver in 2026, but the game is different than in a “cheap spreads” year.  The more realistic playbook is coupon-led returns with tight risk controls, because spread levels imply less cushion if macro volatility returns.

Start with the simple truth: spreads are not screaming cheap

One clean way to see this is through option-adjusted spreads (OAS), which measure the extra yield investors earn over Treasuries after adjusting for bond features.

As of late December 2025:

• U.S. investment-grade OAS: ~0.79% (79 bps)  

• U.S. high-yield OAS: ~2.84%–2.86%  

That’s not “bubble” territory, but it’s also not the kind of wide-spread setup that forgives mistakes. The upside case in 2026 is less about spreads tightening hard, and more about earning the yield while defaults stay contained.

High yield: attractive income, but asymmetric outcomes

High yield can be compelling on all-in yield, but it has a fast downside when spreads widen. A practical way to frame this is to look at representative market vehicles. For example, the iShares High Yield Corporate Bond ETF (HYG) shows:

• 30-day SEC yield: ~6.16%

• OAS: ~260 bps

• Effective duration: ~2.8 years

That’s solid income, but it’s not a free lunch. If spreads move wider, price losses can overwhelm months of coupon quickly. The response is straightforward: prioritize quality within credit, avoid the weakest balance sheets, and keep liquidity high enough to reposition when conditions change.

Emerging markets: local-currency debt works best when the dollar cooperates

EM local-currency sovereign debt can be a cleaner expression of “rates coming down globally,” but it comes with a major condition: USD strength can erase returns through FX.

Even so, the starting yield picture is compelling. The iShares EM Local Currency Bond ETF (LEMB) reports:

• 30-day SEC yield: ~6.4%

• Average yield to maturity: ~7%

That yield can be powerful in a benign global backdrop, but EM local remains a “macro trade” at heart. It tends to work best when global inflation is cooling, U.S. rates are drifting lower, and the dollar is stable to weaker.

2026 takeaway: credit is investable, but it should be framed as income-first with tighter risk discipline. Investment grade is a steady allocator at today’s spreads; high yield can contribute returns through coupon but needs careful sizing; EM local can outperform in the right USD regime, but should stay conditional rather than core.

Derek Akkiprik

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"US Consumer Staples are showing signs of life”, 19/1/26

By Canaccord’s Justin Oliver – Adviser to the Opus Global Growth Fund

The S&P 500 Consumer Staples sector has been showing signs of life in the early days of 2026 after a forgettable 2025. Last year, investors generally passed over the defensive sector, known for stability and dividends, in favour of fast-growing technology stocks. This year, they may be seeking safer havens after the S&P 500’s three-year run of double-digit gains. The Consumer Staples sector has gained 5.8% year to date through to the end of last week, outpacing the S&P 500’s 1.4% gain and ranking among the top performers.

Investors may be hopeful that some of the sector’s recent headwinds will die down this year: Inflation shows signs of cooling. Many stocks in the sector pay dividends, which become more attractive as interest rates fall. And while the surge in GLP-1 drug adoption continues, its impact on snack consumption may already be factored into stock prices. It has been calculated that company insiders bought more than $5 million worth of consumer staples sector stocks in the last two months of 2025. Since insiders rarely buy for short-term moves, the purchase activity may well continue.

Some of the fundamentals that may be helping the consumer staples sector start the year on a positive note include:

(1) Earnings on the upswing. Consumer staples’ earnings aren’t expected to grow at the fastest rate among S&P 500 sectors this year, but they are expected to be among the most improved versus 2025. Returning to earnings growth in 2026 after earnings declines in 2025 are the following industries within the consumer staples sector: Personal care products (12.7% in 2026, -16.8% in 2025), distillers & vintners (7.4%, -15.6%), packaged foods & meats (4.1%, -13.2%), and brewers (2.9%, -9.5%). Meanwhile, the consumer staples merchandise retail industry’s earnings are forecast to grow 11.5%, a far sight better than the 3.3% expected in 2025. Even the soft drinks & non-alcoholic beverages industry shows improvement, with earnings forecast to grow 6.9% this year, more than twice last year’s 3.0% growth. Only two of the sector’s industries should post decelerating growth this year versus last: tobacco (7.2% in 2026, 10.7% in 2025) and household products (1.8%, 3.8%).

(2) Tariff rollback should help.  In November, President Donald Trump entered into agreements with certain Latin American countries that eliminated tariffs on various goods, including imported coffee, bananas, agricultural products, and beef. Consumer products companies that use these foods as ingredients in their products stand to benefit. This should buoy packaged food companies’ profit margins which were hurt last year by rising prices, and their share prices. Conagra Brands, Lamb Weston Holdings, and Campbell’s stocks each shed nearly a third of their value over the past year. All three reside in the S&P 500 packaged foods stock price index, which is down 3.1% year on year to 16th January. The industry’s forward profit margin has fallen from north of 10% in 2021 to a recent 7.5%, which weighed on earnings. Analysts do see improvement this year, with revenues expected to rise 2.0% and earnings forecast to climb 4.1% after falling 13.2% last year. The slightest improvement could help the industry’s stocks because their forward P/E has crumbled to 14.9, close to its nadir of the past 30 years.

(3) Can teetotaling last?  The past two years have seen a large reduction in US alcohol consumption, potentially driven by increased cannabis use, the focus on body weight with the adoption of GLP-1 drugs, fewer happy hours with many people working from home, and growing awareness of alcohol’s health impacts.  The percentage of US adults who consume alcohol fell to 54% last year, the lowest over the past 90 years, Gallup reports. It was as high as 71% in the late 1970s and bounced between 60% and 67% from 1991 through 2023 before sinking to last year’s low. The good news for brewers is that historically alcohol use has recovered after previous droughts. The S&P 500 Brewers stock price index is down 7.7% year on year, but has bounced early in 2026, rising 4.9%. Analysts hold low expectations for the industry’s sole member, Molson Coor’s, with almost no revenue growth forecast over the next two years (-0.3% in 2026 and 0.2% in 2027) and minimal earnings growth (2.9%, 3.8%). But its valuation looks primed for a surprise; the forward P/E of 8.8 is near its lowest in 30 years.

(4) Shoppers keep shopping. Retailing giant Walmart has had the largest impact on the consumer staples sector. The retailer’s stock gained 31.5% over the past year as investors grew excited about Walmart’s increasing online and delivery capabilities and foray into artificial intelligence. Gaining even more than Walmart in the S&P 500 consumer staples merchandise retail industry are the shares of dollar-store operators Dollar General and Dollar Tree, up 111.3% and 93.1% year on year, respectively. They’ve benefitted from higher-income consumers’ increased use of the channel and the lifting of prices beyond the $1 threshold. Offsetting Walmart’s gains have been Target’s losses. The retailer’s stock has dropped 21.7% in the past twelve months, but some investors are optimistic that new management will improve operations. Costco shares have flatlined over the past year. Altogether, the S&P consumer staples merchandise retail stock price index has risen 19.1% year on year, recently breaking out to a new high.

The industry’s forward revenue, earnings, and profit margin each are at or near 15-year record highs. Analysts call for strong revenue and earnings growth for this year, of 5.5% and 11.5%, respectively. But the industry sports a record-high forward P/E to match: 36.7, pushed northward by the forward P/E’s of Costco (44.8) and Walmart (40.9).

Nonetheless, with investors seeking alternative sources of return, the relatively unloved consumer staples sector may be a beneficiary.

Justin Oliver

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Disclaimers

Performance table

Capital at risk.  Returns in US dollars unless otherwise stated. Source: * Estimates Freedom Asset Management as at 18/1/26. Please note depending upon how the funds are invested a small number of underlying funds can price 1-2 days after we take our estimates above so final published NAVs may vary.  Estimated GBP returns are from a $1.25 FX rate on 31/12/24 and $1.34 as at 31/12/25.  Please note launch dates of USVIP 12/2/25 and MINC 20/5/25. ** Note fund prices quarterly and includes 5% discount to NAV expressed as 5% performance above for 2024, note also that the 2025 YTD estimate takes the MCAS November 2025 YTD estimate and deducts the estimated charges of the Astro feeder fund. *** Morningstar as at 18/1/26, I shares for CIM Dividend Fund, F shares for PHC Global Value Fund.

General

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