Semiconductors and optical names dragged the portfolio sharply lower.
Defence and energy held ground when tech did not.

Tuesday handed the UBS Marlow High Conviction Portfolio a difficult session, with the portfolio falling 3.25% against a comparatively modest 0.57% decline in the S&P 500 Total Return. The selling was concentrated and precise: optical components, memory, and semiconductor names that have driven much of our year-to-date gain gave back ground in a broad risk-off rotation. NVIDIA fell 2.37% and Micron Technology dropped 6.18%, setting the tone for the wider semiconductor complex.

"Concentration in the right themes earns the strong years — but it also means the difficult days look different from the index, and that is a trade-off we accept with clear eyes."

The session's damage was narrowly but deeply felt across the AI infrastructure sleeve. Optical connectivity names were the worst-affected corner of the portfolio. Lumentum Holdings, which makes lasers and optical components for data centre networks, fell 8.55%. Coherent Corp, another optical components manufacturer supplying hyperscale data centres, dropped 7.50%. Ciena, which builds high-speed optical networking equipment, fell 7.14%. These names had all performed strongly year-to-date, and today looked more like profit-taking in a crowded trade than any change in the underlying demand picture.

Semiconductors compounded the pressure. Monolithic Power Systems, which designs power-management chips used throughout AI server racks, fell 9.29%. Credo Technology, a provider of high-speed connectivity chips for data centres, dropped 7.80%. Astera Labs, which makes connectivity solutions that sit between AI accelerators and memory, fell 7.06%. The pattern was consistent: names with direct AI infrastructure exposure and meaningful year-to-date gains bore the brunt of the rotation.

Aerospace and defence provided a genuine offset. Karman Holdings, a manufacturer of advanced structures and components for rockets and hypersonic vehicles, gained 7.11% — its strongest session in recent weeks. Graham Corp, which makes heat-transfer and fluid-handling equipment for defence and space applications, rose 5.47%. Howmet Aerospace added 2.58%. Across the energy transition sleeve, Bloom Energy rose 2.32%, a reminder that not every theme moved in the same direction today.

The breadth and speed of today's semiconductor selloff raises a question we are watching carefully: whether this is orderly profit-taking after a strong run, or the beginning of a broader reassessment of near-term AI spending timelines. Upcoming earnings from major hyperscalers and semiconductor equipment companies will be the clearest test. Until those data points arrive, the macro picture for AI infrastructure capital expenditure remains the single most important variable for a meaningful portion of the UMHCP.

Thematic breakdown — no weights or position sizes.

Days like Tuesday are the cost of running a concentrated, high-conviction portfolio in structural growth themes — and the 38% year-to-date gain in the UBS Marlow High Conviction Portfolio reflects what that concentration can deliver when the themes perform. We are not reading today's selloff as a verdict on AI infrastructure demand; the picks-and-shovels businesses that benefit when hyperscalers spend have not changed their fundamental position overnight. We are watching for any deterioration in the actual capital expenditure data before drawing conclusions. The defence and energy transition exposures that held firm today are a reminder that UMHCP is not a single-theme bet, and we believe that balance continues to serve clients well.

Precision hardware and specialty materials led a broad advance.
UMHCP gained 3.40% as conviction paid off.

The week of June 9th was a reminder that genuine earnings power still separates the winners. Advanced Energy Industries — which makes precision power-conversion equipment for chipmakers — surged 15.8%, while Credo Technology — a provider of high-speed connectivity solutions for AI data centres — added 12.8%. Meanwhile NVIDIA gave back 1.7%, a healthy sign that the market is learning to look past the obvious names.

"Owning the infrastructure layer beneath the AI headline — power, photons, precision metals — is where durable returns are quietly compounding."

Equity indices finished the week in positive territory, driven by a resilient technology complex and continued enthusiasm for anything that touches AI capital expenditure. The S&P 500 pushed higher as investors rotated away from mega-cap software and toward the hardware and component businesses that actually build the infrastructure. A cooler-than-expected CPI print mid-week removed a meaningful amount of rate anxiety, allowing rate-sensitive industrials and growth names alike to breathe. Microsoft and Meta were broadly flat to slightly positive — both beneficiaries of AI tailwinds, but neither the story of the week.

The real action was in the second and third tier of the AI supply chain. Semiconductor test and measurement companies, specialty metals producers, and power-management chip designers all moved sharply higher on a combination of earnings beats, guidance upgrades, and analyst upgrades. Robinhood added 9.6% after positive brokerage volume data pointed to sustained retail engagement. On the other side, optical networking names like Ciena gave up ground — down 4.4% — as investors questioned near-term data centre spending timelines. SOITEC, the French maker of engineered semiconductor substrates, fell 12.2% after disappointing European order commentary, a sharp reminder that not every component company is benefiting equally from the AI buildout.

Advanced Energy Industries delivered the week's standout move, rising 15.8% after management raised forward guidance on the back of accelerating orders from semiconductor equipment customers. The company sits at a structural intersection of two of UMHCP's most meaningful themes: AI infrastructure build-out and re-industrialisation of domestic chipmaking capacity. What the market is still catching up to is how tight the supply of precision power-conversion hardware has become — these are not off-the-shelf components.

Carpenter Technology's 12.5% gain was similarly grounded in fundamentals rather than sentiment. The company makes the specialty alloys that go into jet engines, medical implants, and increasingly, the structural components of hypersonic defence programmes. Its guidance raise pointed to order books extending well into 2027. UMHCP has maintained a measured exposure here for precisely this kind of inflection — a business where scarcity of material science expertise meets multi-year government and aerospace contracts.

The UBS Marlow High Conviction Portfolio gained 3.40% this week, and the composition of that gain matters as much as the number. It was not driven by one lucky name — it came from precision power hardware, specialty metals, and the connectivity layer that makes AI data centres actually function. We believe this is exactly the behaviour a concentrated, thematic portfolio should exhibit: owning the infrastructure layer beneath the AI headline — power, photons, precision metals — is where durable returns are quietly compounding. We are watching the Fed closely next week, but our positioning is not contingent on any particular rate outcome; it is rooted in the multi-year capital cycles of re-industrialisation and AI infrastructure that no single interest-rate decision will derail. The one area we are watching with discipline is optical networking, where the near-term demand picture has become less clear, and we will let the data, not the narrative, guide our thinking.

Risk-on returned in May. We kept pace, not stride.
A strong month, just shy of the benchmark.

Global equities rallied hard in May as trade tensions eased and the AI capex cycle reasserted itself. Nvidia delivered another blockbuster quarter, Microsoft and Alphabet reaffirmed record data-centre spending, and risk appetite broadened beyond the megacaps. UMHCP rose 3.54%, a solid absolute result that trailed the S&P 500's 5.26% total return as a handful of our holdings paused after extraordinary year-to-date gains.

"When the market sprints, we will sometimes finish a step behind. What matters is that we are running the right race, on the right course."

The macro picture brightened in May. The US and China extended their tariff truce, the Federal Reserve held rates steady but struck a softer tone on inflation, and the ECB delivered another cut. Oil traded in a narrow band as OPEC+ signalled discipline, and the dollar weakened modestly — a tailwind for risk assets globally. Geopolitical noise around the Middle East persisted, but markets largely looked through it.

That backdrop suited the themes we own. AI infrastructure spending was reconfirmed by every hyperscaler that reported, and the power-and-grid bottleneck that has defined the cycle became, if anything, more acute. The catch this month was rotation: investors broadened into software, consumer, and financials, areas where UMHCP is deliberately light. We are concentrated in the picks-and-shovels businesses that benefit when hyperscalers spend, and that focus cost us a touch of relative performance in a broad-based rally.

Nebius Group, the Amsterdam-listed AI cloud infrastructure provider spun out of the former Yandex, rose 67% in May after a major customer announcement and stronger-than-expected revenue guidance. Our exposure is measured but meaningful, and the position has compounded considerably since we established it. It remains a high-conviction expression of the second-tier cloud build-out thesis.

Credo Technology, which designs the high-speed connectivity chips that link AI accelerators inside data centres, jumped 35.6% on a blowout quarter and raised outlook. Credo sits squarely in the optical and electrical interconnect bottleneck — the plumbing that determines how fast trained models actually run. Coherent and Lumentum round out our optical exposure, with Lumentum the one notable laggard as investors rotated within the group.

June brings the Fed, the ECB, and a fresh round of inflation prints. We expect the central-bank tone to remain cautious but no longer hawkish, which should keep the rate backdrop supportive. The risks we are watching are a renewed flare-up in tariff rhetoric, any wobble in hyperscaler capex commentary, and the natural temptation for markets to take profits after a powerful two-month run. Earnings revisions in our themes continue to move higher, which is what ultimately matters.

We believe the structural story behind the UBS Marlow High Conviction Portfolio is intact and arguably strengthening. The AI build-out, the power bottleneck it creates, and the re-industrialisation of allied economies are multi-year capital cycles, not quarterly trades. A month where we trail a broad rally by less than two points, while compounding 36% year-to-date, is the kind of month we will accept without flinching. Owning the right themes still beats owning the index — and we remain positioned to prove it over the cycle, not the week.