Kopernik Global All-Cap Fund — Quarterly Commentary
In plain words
This quarterly report says Kopernik fund stuck to buying unloved hard-asset companies (mining, energy) while the market chased tech stocks, losing 6.6% in the quarter and trailing its benchmark by 21 points. The manager isn't worried, seeing the pullback as a chance to add to holdings like platinum miner Sibanye, potash producer K+S, and natural gas firm Range Resources, plus new buys including Chinese ride-hailing DiDi and Philippine conglomerate Ayala. They sold health insurers Centene and Molina after big gains, and hold S&P 500 put options (bets that the market will fall), warning the current market structure is risky.
At a Glance
One-sentence summary: The author remains committed to contrarian value investing amid market euphoria, taking advantage of the sharp pullback in hard asset sectors to add positions against the trend, with a stance of 【cautiously bullish】.
- The fund's net value fell 6.60% this quarter, underperforming the MSCI ACWI Index by 21.53 percentage points, primarily due to the market's intense追捧 of momentum stocks such as semiconductors, while the hard asset sectors (precious metals, energy, materials) heavily weighted by Kopernik experienced widespread declines.
- The largest single drag on the fund was the S&P 500 put options (contributing a 1.1% drag), which the author re-established as volatility once again declined, betting on a market pullback.
- Using the cash accumulated this quarter, the author added to more than a dozen undervalued hard asset and cyclical stocks during the downturn, including platinum group metals (Sibanye, Impala), potash (K+S, Nutrien), natural gas (Range Resources), uranium (Paladin Energy), and others.
- At the same time, the author initiated positions in 8 discounted names, spanning non-US tech areas such as Chinese ride-hailing (DiDi), a Philippine diversified conglomerate (Ayala), and Mexican financials (Inbursa), while exiting Centene, Molina Healthcare, and others that had reached intrinsic value due to price appreciation.
- The author explicitly stated, "We are pleased to see hard asset companies fall back to attractive prices," viewing the current volatility as a golden opportunity for long-term investors, and reaffirming trust in their own analysis over market consensus.
Underperformed the Benchmark by 21.5 Percentage Points This Quarter
Performance Comparison: This quarter, the fund's I-class shares fell 6.60%, while the MSCI ACWI Index rose 14.93%, resulting in an underperformance of 21.53 percentage points. Year-to-date, the fund is up a marginal 0.26%, compared to the index's gain of 11.25%. The report attributes this to extreme market euphoria, a surge in the semiconductor sector (the DRAM ETF soared 157% from its April launch to the end of June), and momentum factors posting their largest advantage in decades. Kopernik has historically lagged in euphoric and momentum-driven markets.
Put Options and the Materials Sector Were the Biggest Drags
Performance Drag: The fund's single largest detractor was S&P 500 Index put options, which reduced total returns by 1.1%. The fund re-established these positions in April when implied volatility again fell to attractive levels, currently holding options expiring in late July and August. The materials sector overall detracted 3.2%, with precious metals companies seeing significant declines: gold fell 16%, silver fell 21%, and platinum and palladium fell 21% and 19%, respectively. The energy sector detracted 1.5%. The report argues that the painful correction in hard assets could be a godsend for investors needing protection from the consequences of the current system's fundamental imbalances, directing readers to its earlier commentary, "Bayou Jubilee."
Capitalized on Volatility to Add to Multiple Undervalued Areas
Position Moves: The fund utilized the substantial cash accumulated over the quarter to add to several undervalued areas amid market volatility. Details are as follows:
- Sibanye Stillwater Ltd (Added): A South African platinum group metals producer. Total return for the quarter was -29.3%, detracting 0.3%. The fund added to the position during the decline.
- Valterra Platinum Ltd (Opportunistic Reduction and Addition): A South African platinum group metals producer. Total return for the quarter was -18.2%, detracting 0.7% (the second largest detractor). The fund opportunistically reduced and added to the position amid price volatility.
- Impala Platinum Holdings Ltd (Opportunistic Reduction and Addition): A South African platinum group metals producer. Total return for the quarter was -24.6%, detracting 0.5%. The fund executed similar opportunistic trades.
- Champion Iron Ltd (Added): A Canadian iron ore producer. Total return for the quarter was -24.4%, detracting 0.2%. The fund added to the position.
- K+S AG (Added): A German potash producer. Total return for the quarter was -19.5%, detracting 0.5%. The fund added to the position.
- Nutrien Ltd (Opportunistic Reduction and Addition): The world's largest integrated potash producer. Total return for the quarter was -15.4%, detracting 0.2%. The fund opportunistically traded around price volatility.
- Range Resources Corp (Added): A US natural gas producer. Total return for the quarter was -17.2%, detracting 0.4%. The fund added to the position at lower prices.
- Paladin Energy Ltd (Added): An Australian uranium producer. Total return for the quarter was -15.9%, detracting 0.3%. The fund added to the position at lower prices.
- Japan Petroleum Exploration Co Ltd (Japex) (Added): A Japanese oil and gas exploration and production company. Total return for the quarter was -39.9%, detracting 0.2%. The fund added to the position at lower prices.
- Inpex Corp (Added): A Japanese energy company with ownership in the Ichthys LNG project in Australia. Total return for the quarter was -30.0%, detracting 0.2%. The fund added to the position at lower prices.
- Golden Agri-Resources Ltd (Not Specified): An Indonesian palm oil producer. Total return for the quarter was -9.6%.
- SLC Agricola SA (Not Specified): A large Brazilian agricultural producer. Total return for the quarter was -30.2%.
Adhering to Independent Analysis, Capitalizing on Market Mispricing
Market and Macro View: The report's stance is [Cautious/Bearish on the current market structure]. It argues that the market is highly emotional, with index performance increasingly driven by US tech stocks (as of 6/30/2026, the US comprised 63% of the MSCI ACWI, and Information Technology 32%), while many non-US tech sectors are under pressure. The report emphasizes its philosophy with a direct quote: "we trust the results of our own analysis even when (especially when) it generates vastly different conclusions from those of the crowd and/or those taught by many academics." The report believes that high tracking error, negative news, or unpopular stocks/countries/sectors/industries can pose career risk for fund managers but often simultaneously reduces the portfolio's risk of permanent capital loss due to lower entry prices and higher potential upside.
Added to Detracting Stocks, New Positions Focus on Discounted Assets
Performance Comparison: This section does not provide an overall fund return versus the benchmark but details individual stock contributions and detractions to fund performance.
Position Moves (Itemized):
- Kyorin Pharmaceutical (Added): A Japanese pharmaceutical company. Total return was -31.6%, detracting 0.2% from fund returns. The report added to the position during the decline.
- CKD Pharma (Added): A South Korean pharmaceutical company. Total return was -26.5%, detracting 0.2% from fund returns. The report added to the position during the decline.
- LG Uplus (Opportunistic Buying and Selling): A South Korean telecom company. Total return was -11.0%, detracting 0.3% from fund returns. The report opportunistically reduced and added to the position amid price volatility.
- KT Corp (Added): A South Korean telecom company. Total return was -15.9%, detracting 0.3% from fund returns. The report added to the position during the decline.
- Golden Agri (Added): Detracted 0.2% from fund returns. The report added to the position during the decline.
- SLC Agricola (Added): Detracted 0.2% from fund returns. The report added to the position during the decline.
- Centene Corp (Reduced): A US healthcare management company. Total return was 98.8%, contributing 0.7% to fund returns. The report reduced the position during the advance.
- Molina Healthcare (Closed): A US healthcare management company. Total return was 70.7%, contributing 0.2% to fund returns. The report closed the position as the price approached its estimate of risk-adjusted intrinsic value.
- LG Corp (Opportunistic Buying and Selling): A South Korean conglomerate. Total return was 21.7%, contributing 0.5% to fund returns. The report opportunistically added and reduced the position amid price volatility.
- Franklin Resources (Reduced): A US asset management company. Total return was 47.3%, contributing 0.3% to fund returns. The report reduced the position during the advance.
- Northern Dynasty Minerals (Held for Observation): Owns the Pebble project in Alaska. Total return was 36.3%, contributing 0.4% to fund returns. Action not specified.
- New Positions (8 total): Lumina Metals Corp (Polish gold/silver developer), DiDi Global Inc (70% share of China's ride-hailing market), Ayala Corp (Philippine diversified conglomerate), EPAM Systems Inc (software engineering company), Mosaic Co (largest US phosphate fertilizer producer), Birchcliff Energy Ltd (Canadian natural gas producer), GT Capital Holdings Ltd (Philippine holding company), Grupo Financiero Inbursa SAB de CV (Mexican financial holding company). The report states, "All of these companies are discounted on multiple metrics and trade at substantial discounts to Kopernik’s estimates of their risk-adjusted intrinsic values."
- Re-established / Completed Positions: Re-established S&P 500 Index put options, Suzuken Co Ltd (Japanese pharmaceutical distributor), Sinopharm Group Co Ltd (Chinese pharmaceutical and medical device distributor); completed the position in Empresas COPEC SA (Chilean diversified natural resources and retail company).
- Other Closed Positions: Hyundai Department Store Co. Ltd, Amundi SA, First Resources Ltd, Barrick Mining Corp, Humana Inc (closed due to price appreciation); Euroapi SA (closed due to fundamental deterioration); Air Lease Corp (closed due to the company being acquired and taken private at a price above Kopernik's risk-adjusted intrinsic value).
- Corporate Event: Seabridge Gold Inc spun off its Courageous Lake gold project to shareholders, and the fund received shares in the new company, Valor Gold. The report considers Courageous Lake a large, undeveloped gold mine in Canada, believing its intrinsic value has upside even applying a significant margin of safety.
Reaffirming Value Investment Discipline, Viewing Volatility as Opportunity
Market/Macro View: Stance [Optimistic]. The report states, "We are pleased to see so many hard asset companies fall back to attractive prices," arguing that the current environment is favorable for investment.
Outlook and Risk Reminder: The report emphasizes that its investment process revolves around buying and holding companies at significant discounts, viewing volatility as an opportunity to add or reduce positions. Holdings in Russian securities (approximately 2.9% of the portfolio as of June 30, 2026) remain untradeable due to US and Russian government restrictions, detracting -0.3% from returns this quarter. The report states it will continue to actively monitor developments.
Position Moves
| Ticker | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| Sibanye Stillwater Ltd | Added | South African platinum group metals producer, added on weakness | Quarterly total return -29.3%, drag 0.3% |
| Valterra Platinum Ltd | Opportunistic reduction and addition | South African platinum group metals producer, trading volatility | Quarterly total return -18.2%, drag 0.7% |
| Impala Platinum Holdings Ltd | Opportunistic reduction and addition | South African platinum group metals producer, trading volatility | Quarterly total return -24.6%, drag 0.5% |
| Champion Iron Ltd | Added | Canadian iron ore producer, added on weakness | Quarterly total return -24.4%, drag 0.2% |
| K+S AG | Added | German potash producer, added on weakness | Quarterly total return -19.5%, drag 0.5% |
| Nutrien Ltd | Opportunistic reduction and addition | World's largest integrated potash producer, trading volatility | Quarterly total return -15.4%, drag 0.2% |
| Range Resources Corp | Added | US natural gas producer, added at low price | Quarterly total return -17.2%, drag 0.4% |
| Paladin Energy Ltd | Added | Australian uranium producer, added at low price | Quarterly total return -15.9%, drag 0.3% |
| Japan Petroleum Exploration Co Ltd (Japex) | Added | Japanese oil and gas exploration and production company, added at low price | Quarterly total return -39.9%, drag 0.2% |
| Inpex Corp | Added | Japanese energy company (Ichthys LNG project), added at low price | Quarterly total return -30.0%, drag 0.2% |
| Kyorin Pharmaceutical | Added | Japanese pharmaceutical company, added on weakness | Quarterly total return -31.6%, drag 0.2% |
| CKD Pharma | Added | South Korean pharmaceutical company, added on weakness | Quarterly total return -26.5%, drag 0.2% |
| LG Uplus | Opportunistic increase and decrease | South Korean telecom company, trading volatility | Quarterly total return -11.0%, drag 0.3% |
| KT Corp | Added | South Korean telecom company, added on weakness | Quarterly total return -15.9%, drag 0.3% |
| Golden Agri-Resources Ltd | Added | Indonesian palm oil producer, added on weakness | Quarterly total return -9.6%, drag 0.2% |
| SLC Agricola SA | Added | Large Brazilian agricultural producer, added on weakness | Quarterly total return -30.2%, drag 0.2% |
| Centene Corp | Reduced | US managed care company, reduced on strength | Quarterly total return 98.8%, contribution 0.7% |
| Molina Healthcare | Closed | US managed care company, closed when price approached intrinsic value | Quarterly total return 70.7%, contribution 0.2% |
| LG Corp | Opportunistic increase and decrease | South Korean conglomerate, trading volatility | Quarterly total return 21.7%, contribution 0.5% |
| Franklin Resources | Reduced | US asset management company, reduced on strength | Quarterly total return 47.3%, contribution 0.3% |
| Northern Dynasty Minerals | Hold and observe | Owns the Pebble project in Alaska, no explicit action | Quarterly total return 36.3%, contribution 0.4% |
| Lumina Metals Corp | New position | Polish gold/silver developer, trading at a discount on multiple metrics | Not disclosed |
| DiDi Global Inc | New position | 70% share of China's ride-hailing market, trading at a discount | Not disclosed |
| Ayala Corp | New position | Philippine diversified conglomerate, trading at a discount | Not disclosed |
| EPAM Systems Inc | New position | Software engineering company, trading at a discount | Not disclosed |
| Mosaic Co | New position | Largest US phosphate fertilizer producer, trading at a discount | Not disclosed |
| Birchcliff Energy Ltd | New position | Canadian natural gas producer, trading at a discount | Not disclosed |
| GT Capital Holdings Ltd | New position | Philippine holding company, trading at a discount | Not disclosed |
| Grupo Financiero Inbursa SAB de CV | New position | Mexican financial holding company, trading at a discount | Not disclosed |
| Suzuken Co Ltd | Re-established position | Japanese pharmaceutical distributor, trading at a discount | Not disclosed |
| Sinopharm Group Co Ltd | Re-established position | Chinese pharmaceutical and medical device distributor, trading at a discount | Not disclosed |
| Empresas COPEC SA | Position completed | Chilean diversified natural resources and retail company, trading at a discount | Not disclosed |
| Barrick Mining Corp | Closed | Closed due to price appreciation | Not disclosed |
| Humana Inc | Closed | Closed due to price appreciation | Not disclosed |
| Euroapi SA | Closed | Closed due to fundamental deterioration | Not disclosed |
| Air Lease Corp | Closed | Closed due to company being acquired and taken private | Transaction price above risk-adjusted intrinsic value |
| Hyundai Department Store Co. Ltd | Closed | Reason not stated | Not disclosed |
| Amundi SA | Closed | Reason not stated | Not disclosed |
| First Resources Ltd | Closed | Reason not stated | Not disclosed |
| Seabridge Gold Inc / Valor Gold | Corporate event | Spun off Courageous Lake gold project to shareholders; fund received shares in the new company | The author believes the project's intrinsic value has upside potential |