3 big themes and 3 stock picks from 3 top fund managers

In just a year, we’ve watched markets hit record highs, geopolitical shocks push gold markets to unexpected levels and cryptocurrencies join the conversation in regulations (and crash in the latter part of the year). It’s also been a significant year for Future Generation, with its unlisted trust Future Generation Women hitting its first anniversary.

The trust offers access to a diversified blend of top female Australian fund managers in both Australian and global equities. All the fund managers have donated their time, and instead of fees, 1% of the Fund’s average monthly net assets is donated to not-for-profit partners focused on driving economic equality and opportunity for women.

Future Generation Women recently announced the nine partners for the Fund, with three including Ember Connect, Prison Network and Sisterworks.

As part of a showcase marking the anniversary, three top fund managers shared their views on the top market themes and how they are playing them, and their top picks heading into 2026.

• Annabelle Miller, ECP Asset Management
• Arms Rosenberg, Minotaur Capital
• Dawn Kanelleas, First Sentier

The big themes to watch

2025 has been dominated by a few key themes and the fund managers anticipate these will continue to influence investment markets in 2026.

There were three key themes:

1) Dispersion in the market

“We’re all aware that a few stocks are driving the majority of outperformance, which has meant you are seeing a large number of companies being overlooked or ‘blood in the streets’ trades,” says Miller.

2) Geopolitical shocks and last-minute policy changes

From ongoing conflict in Gaza and Ukraine, to shifting trade policies, we’ve seen a lot this year, and it has been reflected in markets at various points – particularly if you consider the record high prices of gold, which, as Kanealleas describes it, is a “commodity of fear. People go to it for safety.”

3) AI

While this has been partly behind the market dispersion, it’s also something to highlight in its own right, given its sway over every sector in the market.

Market dislocations can generate opportunities, and these themes are no exception.

Both Miller and Rosenberg note that the dispersion and AI themes have created opportunities in enterprise software, which has been hit hard by views that AI will replace such businesses. Each is still a believer in the fundamentals of these businesses.

“Companies like ServiceNow (NYSE: NOW), Adobe (NYSE: ADBE), Salesforce (NASDAQ: CRM) are big positions in the fund,” says Miller.

Rosenberg notes that AI can be a significant opportunity for enterprise software companies and nominates Atlassian as an example.

“Atlassian is off 50% from its peak but is still growing revenues more than 20%. It has 3.5 million monthly average users using its AI features, and the kicker is that their customers who use vibe-coding tools are adding JIRA seats at a faster rate than those customers who are not,” she says.

Given market activity, Rosenberg has positioned her portfolio away from exposures more susceptible to shock, describing diversification as critical.

“We are underweight North America and have a more outsized exposure to some emerging markets, along with Korea and Japan,” Rosenberg explains.

Other opportunities from the market dispersion and geopolitical environment have included the healthcare sector, along with high-quality growth businesses where there is cyclical and market exposure, such as real estate portals in Sweden.

“Healthcare has been one of the worst performing sectors for the last three years as an outcome of overcapacity and COVID, but there are great quality businesses like Sartorius (ETR: SRT3) in France that are high quality and exposed to structural tailwinds,” Miller says.

As an Australian equities manager, Kanelleas has been able to access the implications of market dispersion and geopolitics in generating gold’s spectacular run.

“Gold makes up 15-17% of the small cap index, and the mid-cap index. Increasingly, the top 100 index is dominated by gold.

Most gold companies, even the highest cost gold-producing companies in Australia, at prices of US$4,200, are making margins in excess of almost every software company in the world,” says Kanelleas.

Investing in AI

Australia’s smaller tech sector can make it a harder AI play, but Kanelleas highlights that investors can and should think about the role of resources in AI, with electricification to power it in enormous demand.

“From an Australian context, it’s all about lithium, rare earths, copper and it’s about aluminium,” Kanelleas says, explaining that aluminium is increasingly viewed as a viable alternative to copper, which is in limited supply.

“All the big guys are exposed to aluminium. South32 (ASX: S32), Alcoa (ASX: AAI) are all investment opportunities in Australia and we are looking at playing AI through that segment mainly,” she notes.

Rosenberg and Miller are able to access a broader depth of technology via global equities, so they have leaned into AI infrastructure and chips.

“We have some AI infrastructure names. We own Nvidia (NYSE: NVDA) in the portfolio, but it's an underweight position relative to the index. We like memory names like SK Hynix (KRX: 000660) and Micron Technology (NASDAQ: MU)", says Rosenberg.

She also highlighted stocks to avoid are those in the PC space, noting that, "if you’ve tried to buy a PC lately, you’re now paying 3-4x the memory in that PC than you were two-to-three months ago".

Miller has invested in TSMC (TPE: 2330) and the supply chain surrounding it.

One company she likes in this space is Japanese testing company Advantest (TYO: 6857), which is the “monopoly provider of testing solutions for Nvidia”.

She also increased her position in Alphabet (NASDAQ: GOOGL) earlier this year when the business sold off on concerns over regulatory risks and the threat of competition to search from businesses like OpenAI.

Three top stock picks

Miller – Raspberry Pi (LON: RPI)

“They make small, low-power, high-performance computer modules, which are found in industrial settings. A lot of engineers tinker with them on the weekend and bring them to work and create a little prototype as an industrial product,” Miller explains.

She believes there is a big opportunity for Raspberry Pi to scale the prototype volumes into commercial unit volumes. Further to this, Raspberry Pi has a growing and well-recognised business in microcontrollers.

“There is the opportunity to disrupt the very mature microcontroller market and take market share from the likes of NXP and ST Micro,” she says.

Rosenberg – Unicredit (BIT: UCG)

"European banks generally experienced a banking winter from 2010 to 2021. All they wanted to do was shore up their balance sheets, improve their tier one capital and didn’t grow risk weight assets much at all during that period. Cut forward to today, we’re excited to be finally seeing credit growth coming back to European Markets. Unicredit is at the forefront of this. They have an exceptional cost-to-income ratio of 38%”, she says of the Italian bank.

She also highlights that it ranks high in terms of diversity and inclusion, with 43% of the executive management personnel and 38% of the overall leadership team being female.

Kanelleas – Breville Group (ASX: BRG)

Consumer appliance manufacturer Breville is unique in its category. Kanelleas explains that generally, premium players will be ‘vertical’ where they focus on just one aspect to be the best in the world, while lower-tier brands are usually ‘horizontal’ where they sell across all aspects.

“Breville is actually horizontal, so it plays against every category in the segment. It’s premium and it’s global,” she says.

Kanelleas views particular opportunity from the growing sales in coffee machines and the ‘at home segment’ where people are after luxury and quality, but without having to leave the house.

Final takeaways?

Diversification never goes out of fashion, and thinking beyond the big players can reap rewards based on the insights of these three top fund managers. AI is far from a flash in the pan, but don't be too quick to assume that traditional players will be obsolete, particularly if they are clever innovators.