Dr David Allen, portfolio manager of the Plato Global Alpha Fund says investors shouldn’t ignore the global macroeconomic and geopolitical turbulence that’s underscored the start to CY 2026.

“I don’t think you can deny the current macro and geopolitical uncertainty carries real investment implications. The myriad of major developments simply can’t be ignored, in fact such turbulence should now be a long-term structural consideration for investors.

Allen says the major structural shifts require a systematic approach to risk management.

“Trying to trade or time major macro and geopolitical developments is a great way to destroy your capital. Even for expert investors, it’s our strong view that attempting to forecast macroeconomic or geopolitical shocks is a poor basis for investment decision-making.

“We believe whole-of-portfolio systematic risk processes are the only way to ensure you can continue to be exposed to the exceptionally strong growth on offer in global equities, while managing risk in what really is a shifting global order”

The $3.2 billion Plato Global Alpha Fund applies daily stress tests to its portfolio and Allen says the number of scenarios the portfolios are tested against has now increased to 96 (from 57 in 2024).

“Using thousands of data points, our proprietary risk management system runs these tests, like the way systemically important banks stress-test their loan books, said Dr Allen.

“We are not making predictions about these events, and certainly not trying to time the market. We are simply investing our clients’ capital where we see exceptional long and short opportunities, while at the same time ensuring if any of the 96 stress events do occur, that capital will not be impacted by outsized drawdowns.

“For us, it should be a big concern if your global equities portfolio is not being regularly stress tested in 2026.”

Since inception in September 2021, the Plato Global Alpha Fund has returned +25.36% per annum after fees, outperforming the MSCI World by 13% per annum, with downside capture of just 62% (to 31 December 2025).

The fund now manages $3.2 billion on behalf of Australian investors.

Plato has released data from four of its current stress test scenarios, showing how company share prices would be impacted should the scenarios materialise.

1. Acceleration of U.S. rate cuts: Australian global miners to rise more

 Dr David Allen commented: “In the scenario of rapid rate cuts, gold miners, many of which are Australian, dominate the winners, though the magnitude of upside is notably smaller than 12 months ago, perhaps reflecting already elevated gold prices.”

2. Return of full-scale trade wars

Dr David Allen commented: “Trade wars have been a portfolio stress event now for several years. Of note, the threat of intensifying trade wars is back with the US and Europe locking horns over Greenland.

“European stocks face outsized declines should a full-scale trade war between the US and Europe erupt. Autos and Semis will likely bear the brunt.”

3.  Rapid AUD devaluation

Dr David Allen commented: “It is not implausible that an increasingly assertive U.S. foreign policy in the Western hemisphere encourages China to act more forcefully in its own backyard. Prediction market Polymarket currently assigns a 9% probability to a Chinese invasion of Taiwan by year-end. Following Maduro’s capture, Chinese social media lit up with suggestions that U.S. actions provided a blueprint for Taiwan, content viewed hundreds of millions of times.

“From a market perspective, Australia and the AUD would be crushed. This is an underappreciated risk, certainly for Australian investors with a strong home bias.”

4. A Significant ASX correction

Dr David Allen commented: “The ASX 200 has risen roughly 46% over the past three years, including dividends. One might reasonably assume earnings growth has been robust. In fact, aggregate ASX 200 earnings have fallen by approximately 15% over that period.

“This disconnect raises an obvious question: which stocks are most exposed if the ASX corrects sharply?”

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Mark Steinberg, CEO of First Sentier Investors, said that the completion of First Sentier Investors’ majority investment into a strategic partnership with AlbaCore diversifies the range of investment capabilities it can offer to clients, aligning with the firm’s corporate strategy to accelerate growth.

“Today is an exciting and important day for First Sentier Investors, our shareholder Mitsubishi UFJ Trust and Banking Corporation, and our new partner AlbaCore. The alternative credit capabilities that AlbaCore brings to the table complements our existing investment capabilities and enables us to unlock new asset classes and structures for our clients,” he said.

Headquartered in London, with a presence in Dublin, AlbaCore has capabilities spanning various parts of the corporate credit spectrum including private credit, CLOs, liquid credit and structured credit in Europe. Its partnership with First Sentier Investors will enhance AlbaCore’s growth prospects by expanding market access to its expertise and deepening its product offering.

“Together, we have made strong headway in exploring areas in our respective businesses to collaborate and accelerate our respective strategic plans and longer-term growth trajectories,” Steinberg said.

David Allen, Managing Partner and Chief Investment Officer at AlbaCore said: “We are delighted to be officially part of the First Sentier Investors Group. We look forward to providing compelling opportunities within alternative credit to the broader Fist Sentier Investors business, to access new client markets and channels.  This strategic partnership is rooted in the deep alignment of people, values and culture at First Sentier Investors and AlbaCore, and we are excited to formally start working together.”

AlbaCore will operate with investment autonomy with no change to its operations, teams, office locations or brand. The senior team at AlbaCore will maintain a minority ownership stake in the business and will continue to invest capital into funds alongside First Sentier Investors.

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It is the leading research house’s inaugural rating of the Fund which has delivered a total return after fees of 11.78% per annum since inception^[1] (to 30 September 2023), outperforming its benchmark (MSCI World Net Returns Unhedged Index) by 8.5%.

Dr David Allen, Plato’s head of long/short strategies and portfolio manager of the Plato Global Alpha Fund, welcomed the independent endorsement.

“We thank Zenith for its thorough research into our strategy and team. This recommended rating validates our conviction in our investment process and the benefits that can be achieved for clients through a 150/50 fund that helps amplify opportunities to generate returns from long ideas, while also generating alpha from companies expected to underperform.” said Dr Allen.

“Our strong investment team is well positioned to capitalise on the current global market environment in which it is critical investors generate alpha through both long and short positions, following an extraordinary period of extremely low rates and low inflation.”

The Plato Global Alpha Fund aims to outperform the MSCI World Net Returns Unhedged Index by 4% p.a. (after fees) over the medium-long term.

The Fund uses an all-weather investment style that seeks to deliver consistent alpha over the cycle. Plato Investment Management’s proprietary 100+ Red Flags modelling system, which helps identify long and short ideas, is integral to the Plato Global Alpha Fund’s investment process.

———

[1] Plato Global Alpha Fund Inception Date is 1 September 2021.

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Dr Allen’s research paper, titled A comparison of non-Guassian VaR estimation and portfolio construction techniques, has recently been published in the prestigious Journal of Empirical Finance.

“It is widely accepted by academics that asset returns do not follow the well behaved bell-shaped normal distribution of economic textbooks, and that extreme returns occur much more frequently than one would expect,” said Dr Allen.

“For example, if stock returns really were ‘normally’ distributed as practitioners tend to assume, the 12% fall in the S&P 500 that occurred on the 16th March as COVID-19 fears gripped the world would not have occurred even if the stock market had been open every day since the Big Bang. The 20% drop in the S&P 500 that occurred on Black Monday, October 19th, 1987, would not have occurred even if the history of the universe was repeated one billion times.

“Using the normal distribution in a non-normal world is to court disaster. Nevertheless, the normal distribution forms the bedrock of modern financial practice, primarily because it is mathematically tractable and easy to use.

“Unfortunately, almost all of the widely available approaches for building portfolios and measuring risk are based on how asset prices should behave rather than on how they do behave in the real world.”

While completing his PhD at Cambridge University, Dr Allen developed a new model of asset returns that accounts for “fat tails”, volatility clustering (where extreme returns beget extreme returns), and correlations increasing during times of stress.

The results, published in Journal of Empirical Finance, show that investors can significantly increase their risk adjusted returns by moving beyond the traditional “normal” assumptions of modern finance.

“In 2007-9 the CDO (Collateriased Debt Obligations) pricing model was based on the normal distribution and subsequently described as the formula that felled Wall Street due to the mispricing of risk. The recent market turbulence has again underscored the need for approaches to risk management that reflect how asset prices really do behave, rather than how we would like them to.”

Read the research paper.

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Ms Woodland, to be based in Hong Kong, will lead the Sustainable Investment team alongside current team head, Sydney-based Dr Ian Woods. Ms Woodland has 18 years of investment experience in portfolio management and trading roles, primarily with UBS in London and Hong Kong.

For the past year Ms Woodland has worked for ADM Capital, where she focused on sustainable investment programs in Indonesia. She holds a Degree in Financial and Business Economics from Newcastle University (UK), a Masters degree in Corporate Environmental Governance from the University of Hong Kong and is a CFA Charterholder,

Earlier this year Karin Halliday, Senior Manager Corporate Governance with 34 years of experience with AMP Capital, moved from Sydney to London to support the globalisation of the ESG capability.

Additionally, from the start of 2019, Adrian Williams will fulfil the role of ESG Director, Real Estate and Listed Equities. Over the past 10 years Adrian has held senior roles within the Real Estate business of AMP Capital including Head of Corporate Responsibility and Business Platform, Head of Finance and Acting Chief Operating Officer. Outside AMP Capital, Adrian also has more than 30 years of grass roots involvement in the establishment and running of not-for-profit and social enterprises and is passionate about the importance of driving social change.

The appointment of Ms Woodland and Mr Williams increases the size of the Sustainable Investment team to six people. Dr Woods and his team have run the Australian-focused AMP Capital Sustainable Share Fund for more than a decade and supported AMP Capital’s public markets teams globally in integrating ESG into their investment processes.

David Allen, Global CIO, Equities, said: “I am delighted to welcome Emily to the team, whose passion for ESG and impact investment struck me from the first time we met. Under the joint leadership of Emily and Ian, we have great aspirations to deepen and broaden our offerings to clients, both within Australia and globally.

“Investing in companies with long-term sustainable business models is an important part of our investment approach across all asset classes. More specifically, there is growing demand from clients to be able to invest globally in companies that are changing the world for the better, while also delivering strong long-term financial outcomes. Over time, we aim to help clients meet this need.

“With Adrian also joining our Sustainable Investment team, we seek to leverage AMP Capital’s ESG experience across private and public markets, for the benefit of clients.”

AMP Capital is recognised as a global leader for its ESG and responsible investment approach, and recently received A and A+ ratings in the annual reporting and assessment of signatories to the Principles for Responsible Investment (PRI).

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The AMP Capital Global Equity Fund is long-only and is the inaugural fund in AMP Capital’s new global equities range.

The fund will focus on absolute risk and return, not benchmarks, and invest in a concentrated portfolio of between 25 and 35 exceptional companies with strong current or anticipated cash generation. The investment time horizon will be long term, leading to low portfolio turnover.

The fund will seek tailwinds of thematic drivers and, where possible, environmental, social and governance tailwinds. Favoured investment themes include changing demographic trends, which will drive major changes in future global patterns of consumption and healthcare, and technology.

David Allen, AMP Capital’s Global Chief Investment Officer, Equities, said: “The launch of the AMP Capital Global Equity Fund is a defining moment for AMP Capital. It represents a highly differentiated investment opportunity for clients following years of work by our team and it is also a trailblazer for how we plan to re-position our broader equity fund range over time. We have built a global equity capability that stands apart from its peers and is in line with what clients tell us they want: process transparency, absolute capital growth, reduced volatility and downside protection. Importantly, the fund seeks to deliver absolute outcomes as it is benchmark unaware.

“We’ve taken a high-conviction approach, investing in a small number of exceptional companies with outstanding prospects, that have dependable and persistent cash-backed returns on capital. As we are not bound to a benchmark, sector or country, these are names that we think are the best stocks globally and will deliver the performance to meet our clients’ goals.”

Mr Allen said AMP Capital’s new global equity fund is underpinned by a strong and collaborative team culture.

“We believe our star team approach – rather than that of a star portfolio manager – leads to better and more sustainable outcomes for clients by managing individual behavioural biases and reducing key person risk,” Mr Allen said.

The investment team is based in London and Sydney, drawing on the strength of the investment professionals in both regions and enabling coverage across time zones.

AMP Capital intends to launch additional global equity products in the coming years.

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