Freedom Calls: 4/5/26, The UAE makes bold geopolitical moves and Europe faces structural headwinds

Freedom Calls: 4/5/26, "The UAE makes bold geopolitical moves and Europe faces structural headwinds"

From the team Freedom Asset Management

They are notoriously difficult to photograph with an iPhone, and yesterday was no different, but they are quite beautiful things. Below a "raft" of puffins, bobbing around in the glistening sea off the back of Herm for the bird watchers out there…

Iran war update - the UAE makes bold geopolitical moves

I always say that anything that makes the world a safer place, is a good thing. The world economy and markets will generally agree. So last week's announcements by the UAE were noteworthy in two respects:

The UAE and Israel work closely together on defence

The UAE announced that the Israelis had sent a unit of their Iron Dome air defensive system, and troops to operate it, to the UAE early in the Iran war. The UAE suffered many more missiles attacks than its neighbours, but was highly adept at taking down the 2,200 drones and c. 550 ballistic missiles that Iran sent.

This is a major step forward in regional cooperation and comes on the back of the Abraham Accords signed in 2020 during Trump's first term. It will doubtless raise eyebrows in the region, but underscores that the UAE now has access to the best weapons and the best defensive systems in the world. That is a very powerful message to all those, including ourselves, who call the UAE "home".

The UAE leaves OPEC after 50+ years

The second announcement was the UAE's decision to leave the Organisation of the Petroleum Exporting Countries (OPEC). Why did this happen? Most observers are pointing to a break down in relations between Saudi and the UAE; they were backing different sides in Yemen, and had come to diplomatic blows shortly before the war. However, this decision does not come as a complete surprise, as this has been rumoured for the last 5+ years, according to our sources in the region.

What does it mean in practice? It is significant because it frees up the UAE to produce as much oil as it likes, hurts OPEC (which is led by Saudi Arabia) and aligns the UAE more closely to one of the key non-OPEC producers - the USA. It means oil prices in the medium to long term should or could be lower than they might otherwise have been.

Taken together these two factors are highly significant in the regional power structure.

A week on the road with US Tech

A week with Cody Willard is always insightful and good fun. If there was one theme which came out from our travels it was about timing. In the last 30 years of technology investing, never have these 3 pillars for growth converged to form such an exciting entry point:

The Economy: tech companies are investing over $1tr in capital expenditure this year to feed the Artificial Intelligence (AI) revolution. To put that in context, during the Global Financial Crisis in 2008, the Troubled Asset Relief Programme (TARP) was authorised to purchase or guarantee up to $700bn into troubled assets, rescuing bank balance sheets, with the hope that some of this trickled down into the economy. The trillion dollars that is being invested now into AI is being spent by private companies, where for every dollar spent, there is a requirement for shareholder return; that is very big return requirement from a very big number!

Valuations: it is now cheaper to buy Amazon on a multiple basis than Walmart. Certain technology valuations were so crushed at the beginning of this year that they have seldom looked so attractive on a relative basis;

Inflection points are being reached: without any doubt, the inflection points for AI and robotics adoption have now been reached. Every business owner, partner or CEO that we sat down with last week is already using AI in their business. This is the not the blockchain revolution, which 12 years on, still does not have a compelling use case for legal transactions. This is the smart efficiency revolution, which makes us all more competitive on a global scale.

There is more from Cody in his article below.

Performance - a good set of numbers reflecting a positive outlook for US markets

(For performance disclaimers see foot of email)

The post Iran war recovery continues, especially for US assets and technology. There is plenty of reason to be concerned about European economies, as Justin's piece below highlights, but across the funds we don't really have much exposure to Europe. We held an Investment Committee on our Balanced fund (OGF) last week and agreed to take equity exposure back up to 60% staged over a several days - that increased exposure being to the S&P500. In our minds, at least in market terms, this war is over. Both OGG and USVIP are powering ahead - and MINC is quietly doing what it should.

This week's articles are below:

10,000 Days' Cody Willard, advisor to the US Technology VIP fund takes a trip down memory lane with "Ask Jeeves died this month…" reminding us of the feverish battle for search engines when the Internet first went mainstream, and

Canaccord's Justin Oliver, adviser to Opus Global Growth, writes that "Europe faces a challenging mix of cyclical pressures and structural headwinds"

We had a great trip with Cody in Europe last week. I am heading to the UAE later in the week and looking forward to catching up with our Abu Dhabi team and investors.

It is a bank holiday today in the UK, so our Guernsey office will be closed.

Wherever you are, please let me wish you a peaceful week ahead,

Adrian

Co-Founder // Freedom Asset Management

Guernsey // Abu Dhabi // Hong Kong

M: +44 7781 40 1111 // M: +971 585 050 111 // M: +852 5205 5855

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"Ask Jeeves died this month…", 4/5/26By Cody Willard and the team at 10,000 Days, Investment Advisers to the US Technology VIP Fund

A lot of you, especially if you're under the age of 40 might not know what "Ask Jeeves" was - an Internet search engine. In the late 1990s as the Internet started to go mainstream and commercial, I vividly remember dialing into AOL to get on the Internet and reading scores of which search engines were best rated. And how often the ratings would change as one search engine would leap frog another: One month AltaVista would be top rated and then Yahoo might jump to the top and some months later, Excite or Lycos would be tied at the top as AltaVista would have fallen to the bottom even below Webcrawler and Hotbot. The search results were usually not great no matter which search engine you typed "Michael Jordan screensaver" on (yea, your computer screens were so archaic that those very low res giant monitors on your desk would burn images into the screen if you didn't get keep some sort of screen saver on).

It took another few years before archaic and very hard-to-install DSL and cable modem broadband enabled us to download songs to our scroll-wheel iPod. I remember a couple years later when YouTube had just come out telling the CEO of Jim Cramer's old financial news and analysis website, TheStreet.com, that watching video on the Internet was about to go mainstream and they had a window in which they could try to become the de facto financial news video source.

Here's a clip of me on CNBC in 2006 talking to people on the street about the idea that we'd soon be watching anything we wanted at any time on demand using the Internet. They thought I was nuts, if they even had a clue of what I was talking about!

https://www.youtube.com/watch?v=1G0kOWCN6cE

One last anecdote, here's an article I wrote for the Financial Times in 2007 soon after the iPhone came out about how difficult it still was to use it, for example:

The full article is available at: https://www.ft.com/content/83817b64-5d62-11dc-8d22-0000779fd2ac

"My iPhone wouldn't work in Italy there at all, even though AT&T told me it would. And I couldn't get it to work on the local WiFi networks either. So I had to schlep myself back to a hotel where I could log onto a community computer and access the Internet - and get me booked on the next flight back to NYC. But American Airlines wouldn't let me change my international flight from the Net, so I had to find a phone that would let me dial the US. I had to book a room at the hotel to get access to a phone that would dial an 800 US number, but eventually, I did get booked for the next flight out the next morning.

Convergence has come along way since Blackberry first added voice services to its gadgets, but as my painful Italy experience reminded me, convergence has a long way yet to go. That said, the iPhone and its competitors, will soon usher in the golden age of converged communications. The changes will be far reaching and revolutionary and no sector will be untouched."

Which, finally, leads to me to my point: We're just barely getting out of the Dial-Up Internet Phase of The AI Revolution and probably just about to get to the My iPhone Won't Work in Italy Phase Of The AI Revolution. Think about the parallels.

These days whenever people tell me that it looks like Anthropic has leapt ahead of the other AIs in the ratings and that Grok or Gemini is lagging, I immediately recall those old search engine ratings.

And when people complain that AI's not being adopted quickly enough by enterprises, or that it still occasionally hallucinates when they work with it, I immediately recall how my iPhone wouldn't even make calls when I went to Italy with it in 2007. As I said back then - and it certainly applies even more so today with AI (and Robotics) than it did with what I was calling The Converged Communications Revolution - it will soon usher in the golden age of AI and Robotics. "The changes will be far reaching and revolutionary and no sector will be untouched."

Corporations (and especially governments) are notoriously slow at jumping headfirst into new technologies because they do not want to upset the status quo that has worked for them for so long. They have legacy businesses, legacy software, legacy teams and as you can't change human nature, they have people who protect their moats and want to CYA at all times. Meanwhile, it's only been three years and five months, just about 1,250 days, since the ChatGPT moment woke the world up to the sudden new power and potential of The AI Revolution.

Meanwhile, corporations, governments, small businesses, individuals and all kinds of other entities are indeed using AI at an ever accelerating pace which will only likely to continue for years (decades) to come.

Much like in that CNBC clip of me above, most people think I'm nuts when I tell them that we'll eventually be able to tell an AI to make a feature-length movie based on The Gladiator featuring themselves as the protagonist but set on Mars and using Kung Fu fighting against lizard monsters… and then instantly watch the movie.

The world needs probably 50-100x more compute power to get there, but it will get there. I often tell people that what we invest in as Revolutionary Investors is probably inevitable - the question is one of timing. It might take five more years or ten more years to get to the point where instant custom movies are mainstream. But we will get there at some point.

Look at this chart of Internet traffic over the last thirty years as its inevitable growth took hold:

That growth is currently accelerating once again as The AI Revolution takes off.

Meanwhile, The Robotics Revolution is in its own version of the Dial Up Internet Phase and as Physical AI continues to accelerate in its own improvements and as the prices of batteries, actuators, sensors, etc come down in part because of the great scale that will be required to meet their demand, it will soon get to its own version of the My iPhone Won't Work in Italy phase.

The other common thread of all these Tech Revolutions is that they are happening at an ever accelerating rate of adoption in addition to the ever accelerating rate of advancing. It took almost 100 years for electricity to reach a billion people. It took almost 30 years for computers to reach a billion users. It took less than 20 years for the Internet to reach a billion users after it went mainstream. AI? Less than three years.

You see why I believe this is all just getting started? Our job now is use our vision along with discipline and patience to find and own the companies that will benefit the most from these inevitable trends. We're on it.

Cody Willard

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"Europe faces a challenging mix of cyclical pressures and structural headwinds", 4/5/26

By Canaccord's Justin Oliver, Investment Adviser the Opus Global Growth Fund

Europe's economic outlook has deteriorated sharply, with a combination of slowing growth and rising prices creating an increasingly difficult backdrop for policymakers and investors alike. Recent data suggest the region is slipping toward stagflation at precisely the wrong moment, just as external shocks intensify and structural weaknesses resurface.

Business activity has weakened meaningfully in the Eurozone

The Eurozone's composite purchasing managers' index fell to 48.6 in April, dropping below the 50 threshold that separates expansion from contraction for the first time in over a year. While manufacturing showed some resilience, edging higher to 52.2, the services sector declined into contraction, highlighting a broad-based slowdown. At the same time, inflation pressures are re-emerging. Annual price growth accelerated to 2.6% in March, up from 1.9% the previous month, complicating the policy outlook. This combination of softer activity and firmer inflation reflects the growing impact of geopolitical tensions, particularly the ongoing conflict in the Middle East.

Disruptions to energy supply chains and heightened uncertainty have weighed on sentiment while pushing costs higher. Early estimates indicate that Eurozone GDP growth in the first quarter may have been just 0.1%, underscoring the fragility of the recovery.

For the European Central Bank, this presents a difficult balancing act. Traditionally, slowing growth would justify looser policy, but persistent inflation, driven in part by volatile energy prices, limits that flexibility.

Markets increasingly expect the ECB to maintain a relatively hawkish stance, with the possibility of further rate increases as policymakers seek to avoid repeating the delayed response seen during the 2022 energy shock. Yet tightening policy into a slowing economy risks exacerbating the downturn, particularly given relatively fragile labour markets across the region.

The uncertainty surrounding the geopolitical environment adds another layer of complexity. Stop-start developments, ranging from ceasefires to renewed disruptions, make it challenging to assess how long current pressures will persist.

At the same time, Europe is confronting the erosion of several long-standing assumptions, including access to cheap and reliable energy, stable global trade relationships, and a predictable security framework. Germany illustrates these challenges most clearly. As the Eurozone's largest economy, its slowdown has outsized implications for the region. Business confidence has fallen to levels last seen during the pandemic, and a large majority of manufacturers expect the current crisis to have a significant negative impact. Growth forecasts have been cut sharply, with expectations for 2026 reduced to just 0.5%, while inflation is projected to rise further. Higher energy costs, supply chain disruptions, and weaker external demand are all contributing to the strain. However, the current situation also exposes longer-term structural shortcomings. Germany's reliance on external energy sources, slow progress on digital infrastructure, and limited adaptation to technological change have left it particularly vulnerable. These issues are now amplifying the effects of the latest shock, raising concerns about a more persistent period of stagnation.

More broadly, Europe's limited participation in the global artificial intelligence boom is becoming increasingly evident.

Technology represents a far smaller share of equity markets in Europe compared with the United States, and investment in AI infrastructure is heavily concentrated among a handful of large US firms. As a result, much of the productivity growth and earnings expansion associated with this wave of innovation is occurring elsewhere. This divergence is reflected in long-term trends. European corporate earnings have shown little growth over the past two decades, while US earnings have expanded significantly. Productivity tells a similar story, with the United States maintaining a clear advantage, supported by sustained investment and technological adoption. The gap is also visible in market valuations, where US equities command a premium reflecting stronger growth prospects and greater exposure to high-growth sectors.

As things stand, Europe faces a challenging mix of cyclical pressures and structural headwinds. The immediate impact of geopolitical tensions has pushed the region closer to stagflation, while longer-term issues, ranging from energy dependence to limited technological leadership, continue to weigh on its outlook. Navigating this environment will require careful policy calibration, but also a renewed focus on addressing the underlying constraints on growth.

Justin Oliver

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Disclaimers

Performance table

Capital at risk. Returns in US dollars unless otherwise stated. Source: * Estimates Freedom Asset Management as at 3/5/26. Please note depending upon how the funds are invested a small number of underlying funds can price 1-2 days after we take our estimates above so final published NAVs may vary. Estimated GBP returns are from a $1.25 FX rate on 31/12/24 and $1.34 as at 31/12/25. Please note launch dates of USVIP 12/2/25 and MINC 20/5/25. ** Note fund prices quarterly and includes 5% discount to NAV expressed as 5% performance above for 2024, note also that the 2025 estimate takes the MCAS December 2025 estimate and deducts the estimated charges of the Astro feeder fund. *** Morningstar as at 3/5/26, I shares for CIM Dividend Fund, F shares for PHC Global Value Fund.

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