Investment objective
The investment objective is to generate superior returns for Unit holders by investing in global markets, with a focus on reducing risk and preserving capital.
More information can be found in the Information Memorandum located at the Fund website.
Applications available here.
Investment Strategy
The Defender Global Fund (Fund) provides investors with exposure to global markets through a long and short strategy.
The Fund starts with the Managers global macroeconomic and market outlook , then overlays key thematics which the Manager believes will effect future performance and combines this with a bottom-up investment decision criteria.
Performance Summary
Commentary
The Defender Global Fund returned +2% in Q4 CY2025.
Financial Markets Report: Q4 CY2025
As we look back from the vantage point of February 2026, the final quarter of 2025 stands out as a “Grand Final” of sorts for the global markets high stakes, heavy hits, and a dramatic pivot in momentum. While 2024 was about the promise of AI, Q4 2025 was about the industrialization of intelligence. The quarter closed with a definitive “soft landing” narrative in the US, contrasted by a more sluggish, defensive posture in the Australian economy.
US Macro: The “Goldilocks” Landing
The US economy finished the year with surprising vigor. Real GDP for Q4 2025 grew at an annual rate of 2.9%, a deceleration from the blistering Q3 but still robust enough to keep recessionary fears at bay. The Federal Reserve, having navigated the “higher for longer” era, maintained a holding pattern through October and November, before signaling a more accommodative stance in December as Core PCE inflation settled toward 2.4%.
Consumer resilience remained the backbone of this expansion. Despite elevated credit card interest rates, the American consumer continued to spend, bolstered by a labor market that shifted from “red hot” to “sustainably warm.”
Equity Markets: A Record-Breaking Sprint
The S&P 500 and the Nasdaq Composite both ended the year near all-time highs, capping off a stellar 2025.
- S&P 500: The index gained 8.4% in the final quarter. While the rally began with a narrow focus on tech, the final weeks of December saw a “broadening out” into industrials and financials as investors bet on a cyclical recovery in 2026.
- Nasdaq: The tech-heavy index surged 12.1% in Q4. This wasn’t just momentum; it was fueled by a blowout earnings season where the “Magnificent Seven” (and their emerging challengers) proved they could translate AI hype into actual balance sheet growth.
The AI CAPEX Arms Race
The defining theme of the quarter was the unprecedented capital expenditure (CAPEX) of the AI hyperscalers (Microsoft, Amazon, Alphabet, and Meta). Total quarterly CAPEX for these four giants combined surpassed $60 billion, an annual run rate exceeding $240 billion.
Investors initially greeted these numbers with “CAPEX anxiety,” questioning the timeline for returns. However, by mid-quarter, the narrative shifted. The deployment of NVIDIA Blackwell B200 clusters became the new benchmark for enterprise relevance. For specialized cloud providers and hyperscalers alike, the consensus became clear: the risk of under-investing in GPU infrastructure was far greater than the risk of over-spending. We are no longer just buying chips; we are building the “sovereign superclusters” of the next decade.
GOOG: The Cloud and Gemini Rebound
Alphabet (GOOG/GOOGL) had a particularly redemptive Q4. After spending much of early 2025 in the shadow of OpenAI and Microsoft, Alphabetˇs “full-stack” advantage began to manifest.
- Google Cloud: Revenue growth re-accelerated to 31%, hitting a run rate that places it firmly as the high-growth alternative to AWS and Azure.
- Gemini Integration: The rollout of Gemini 2.0 across Search and Workspace began to show early signs of “search defensibility,” allaying fears that LLMs would cannibalize their core ad revenue.
- Financial Discipline: Despite the massive AI spend, Alphabet maintained high operating margins through continued “efficiency” measures, proving they can build the future without gutting the present.
Gold: The Silent Outperformer
While tech grabbed the headlines, Gold quietly hit new nominal highs in Q4, crossing the $4330 /oz threshold. This rally was driven by a “perfect storm” of factors:
- Central Bank Buying: BRICS+ nations continued to diversify reserves away from the USD.
- Geopolitical Hedging: Ongoing tensions in the Middle East and Eastern Europe kept the “fear gauge” elevated.
- Yield Sensitivity: As the Fed signalled the end of the hiking cycle, the opportunity cost of holding non-yielding gold dropped, making it the preferred hedge for a potentially volatile 2026.
Local Commentary: The Australian Economy
In Australia, the mood was more somber. The RBA remained the “Grinch” of the holiday season, keeping the cash rate steady at 4.35% even as global peers began to pivot.
- GDP Growth: The local economy sputtered, growing at a meager 0.2% for the quarter. Household consumption is being squeezed by the “mortgage cliff,” with discretionary spending falling in real terms.
- The Mining Drag: Softness in Chinese demand for iron ore put pressure on the ASX 200ˇs heavyweight materials sector.
- The Silver Lining: The bright spot remains digital infrastructure. Australia is emerging as a critical hub for “Sovereign AI” in the APAC region. Investment in Tier IV data centers and domestic GPU clusters provided one of the few avenues for productivity-led growth, even as the broader “bricks and mortar” economy struggled.
Looking Ahead to 2026
The quarter ended with a sense of “mission accomplished” regarding inflation, but a new set of questions regarding AI productivity. The focus for 2026 will shift from “who is buying the GPUs?” to “who is actually making money with them?”
Regards,
The Defender Global Team
Key Information
Sector allocation
12 Feb 2026
Important Notice
This report has been prepared by Defender Capital Pty Ltd ABN 58 636 314 540, operating under a Corporate Authorised Representative agreement of Defender Asset Management Limited (AFSL 482722) (CAR 001 285 563), Fund Manager of the Defender Global Fund (ABN 27 482 997 023) without taking into account the objectives, financial situation or needs of individuals and is prepared only for wholesale investors. Before making an investment decision about the Fund, investors should read the Fund’s Information Memorandum available at the Funds website https:// defenderam.com/investments/ or by contacting [email protected] and obtain advice from an appropriate financial adviser. Units in the Fund are issued by Defender Asset Management Limited (ABN 29 608 281 189) (AFSL 482722).
his information is current as at the date of publication. The material has been prepared based on information believed to be accurate at the time of publication. Assumptions and estimates may have been made which may prove not to be accurate. Defender Capital undertakes no responsibility to correct any such inaccuracy. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information. To the full extent permitted by law, neither the Fund Manager, the trustee or any related entities makes any warranty as to the accuracy or completeness of the information in this newsletter and disclaims all liability that may arise due to any information contained in this newsletter being inaccurate, unreliable, or incomplete. Past performance is not a reliable indicator of future performance.