01 Strategy Overview
The Rotational Fund is a proprietary thematic strategy that allocates across six structural mega-trends, dynamically adjusting weights based on momentum, macro regime signals, and relative valuation. Unlike passive multi-asset strategies, it makes active, high-conviction rotational calls between themes as economic cycles evolve.
The core conviction is a "picks & shovels" approach to artificial intelligence. Rather than betting on which model or application layer wins, the fund owns the indispensable infrastructure the entire build-out depends on regardless of outcome — the data-centre power and cooling supply chain (Vertiv, Eaton, Constellation Energy), the high-speed networking and interconnect fabric that moves data between GPUs (Arista, Marvell, Astera Labs), the semiconductor capital equipment that fabricates the chips (MKS Instruments), and the cybersecurity layer that protects the workloads (CrowdStrike, Palo Alto Networks, Fortinet, Cloudflare). These businesses monetise AI capex on day one, whoever ultimately wins the application race.
That growth engine is balanced against an early-stage quantum computing sleeve (IonQ, Rigetti, D-Wave plus the Defiance Quantum ETF) positioned ahead of the anticipated inflection in error-corrected quantum advantage, defensive real-asset exposure (gold and silver), the decarbonisation supercycle (global clean energy), and a low-beta European consumer-staples anchor. Theme weights are reviewed monthly using a quantitative scoring model incorporating price momentum, earnings revisions, and macro sensitivity.
02 The Six Themes
03 Simulated Performance
04 Theme Allocation (Current)
05 Current Holdings
| Security | Theme | Type | Weight |
|---|
06 Macro Positioning & Investment Thesis
The fund is positioned for a single, dominant macro reality: a supply-driven inflation shock layered on top of a structural AI capex super-cycle. The closure of the Strait of Hormuz following the 28 February 2026 strikes on Iran has turned an energy-and-shipping disruption into a broad cost-of-living shock — US headline CPI re-accelerated to 3.8% year-on-year in April (the hottest since May 2023), with energy alone contributing more than 40% of the gain. Every theme below is selected to either benefit from, or be insulated against, that environment.
Theme 01 · 32% AI Infrastructure — the picks & shovels
The central conviction is that the surest way to monetise artificial intelligence is to own the infrastructure the entire build-out depends on, rather than to guess which model or application ultimately wins. Hyperscaler capital expenditure exceeded $400bn in 2025 and is guided up a further ~75% in 2026; data-centre electricity consumption rose 17% in 2025 alone. That spend lands first on the physical layer the fund owns — power and cooling (Vertiv, Eaton, Constellation Energy), the networking and interconnect fabric that moves data between GPUs (Arista, Marvell, Astera Labs), and the semiconductor capital equipment that fabricates the chips (MKS Instruments). These businesses earn revenue on day one of a project, whoever wins the application race.
This is the theme to watch most closely. The thesis is deliberately held with a margin of caution: most pure-play AI application companies are not yet profitable, and the build-out is increasingly energy-constrained. With electricity prices already rising more than twice as fast as headline inflation — and the Hormuz shock pushing power costs higher still — the economics of marginal data-centre capacity are tightening. There are early signs of moderation: new data-centre deals fell more than 40% between Q3 and Q4 2025, and some analysts see hyperscaler capex growth halving in 2026. The fund therefore treats AI infrastructure as a high-conviction overweight that must be continuously re-underwritten against energy costs and capex revisions, not a buy-and-forget allocation.
Theme 02 · 18% Cybersecurity Fabric
Cybersecurity is the recurring, mission-critical spend that scales with every new attack surface AI creates. CrowdStrike, Palo Alto Networks, Fortinet and Cloudflare sell subscription software with high gross margins and sticky renewals — the closest thing in the technology stack to non-discretionary spending. In a tightening macro environment where boards cut speculative projects first, security budgets are the last to be touched, giving this sleeve a defensive quality unusual for a growth allocation.
Theme 03 · 12% Quantum Computing — venture-style optionality
The quantum sleeve (IonQ, Rigetti, D-Wave, plus the Defiance Quantum ETF) is sized like venture capital: small enough that it cannot sink the portfolio, large enough to matter if error-corrected quantum advantage arrives. It is the fund's convex, long-dated call option — uncorrelated to the near-term macro cycle and held precisely because its payoff profile is asymmetric.
Theme 04 · 14% Precious Metals — a dual-purpose hedge
Gold and silver are held for two distinct reasons, which is why the fund treats them as a core rather than tactical position. The first is the classic role: precious metals are time-tested inflation and currency hedges, and with US debt above 124% of GDP, annual interest costs north of $1tn, and a Treasury increasingly funding itself with short-dated bills, the case for a non-fiat store of value is strengthening.
The second reason is specific to this fund's AI thesis: silver in particular is an irreplaceable industrial input to the build-out the fund is long elsewhere. Silver has the highest thermal and electrical conductivity of any metal (≈429 W/m·K, around 7% better than copper), so it is used in the parts of an AI data centre where performance cannot be compromised — internal interconnects, packaging and bonding inside high-performance GPUs and TPUs; silver-plated copper connectors that cut resistance; and the switchgear, relays and busbars that handle high-voltage power distribution. Gold serves a parallel role in semiconductor bonding wires and corrosion-resistant contacts. Demand from solar photovoltaics compounds the industrial pull. In other words, the same capex wave driving Theme 01 is also draining the physical silver and copper inventories that back Theme 04 — so precious metals hedge the portfolio's inflation risk and express its AI conviction through a second, supply-constrained channel.
Theme 05 · 12% Energy Transition — security, not just decarbonisation
Clean energy is held less as an ESG statement than as an energy-security trade. The 2026 Iran war has damaged more than 80 Gulf energy facilities, with over a third severely hit; industry estimates put restoration of pre-war oil and gas output at up to two years, meaning some refining capacity may not return for years. The episode is a stark demonstration of how exposed import-dependent economies are to a single chokepoint. The United Kingdom is the clearest example: structurally reliant on imported gas (LNG is projected to rise from ~14% to ~46% of supply by 2035), it is acutely vulnerable to fossil-fuel price shocks, which is exactly why policy is accelerating toward a clean-power system by 2030. Domestically generated solar, wind and grid infrastructure offer energy that, once built, is cheap and insulated from geopolitics — and the surging electricity demand from AI data centres gives that new capacity a guaranteed buyer. ICLN expresses this without single-stock risk.
Theme 06 · 12% EU Consumer Staples — the risk neutraliser
The European consumer-staples sleeve (iShares MSCI Europe Consumer Staples) is the portfolio's ballast. Its first job is simply to lower volatility: staples are low-beta, generate stable cash flows and pay dividends, dampening the swings of the growth themes and improving the fund's risk-adjusted return rather than its headline return.
Its second job is to express a direct view on the Hormuz food shock. Roughly a third of globally traded fertilizer transits the Strait, and the closure has stranded grain shipments (rice, wheat, barley) bound for the Gulf while diverting vessels around the Cape of Good Hope — adding ~3,800 nautical miles and 10–14 days per voyage. War-risk insurance premiums for the Strait jumped from 0.125% toward 0.4% of hull value, and at the peak reached several percent. Crucially, scarce capacity is rationed by price: oil and high-value cargo can pay the premium to jump the queue, pushing lower-margin agricultural shipments to the back and creating backlogs. Arriving just as the Northern Hemisphere planting season begins, higher fertilizer costs and disrupted nutrient supply threaten next season's yields — a recipe for sustained food inflation. Consumer-staples companies, which can pass input costs through to defensive, repeat-purchase demand, are among the cleanest ways to hold a position that is both protective and levered to that thesis.