Freedom Calls: 30/3/26, “Rain stops play in the UAE…. and wishing our readers a Happy Easter and Ching Ming Festival for next weekend"

From the team at Freedom Asset Management

It was great to be back in Abu Dhabi last week.  

Whilst it was a much quieter place than a month ago, people’s spirits are high and the shops and restaurants are well stocked.  It is remarkable to experience the effectiveness of the UAE armed forces at intercepting 100% of the ballistic missiles and c.95% of the drones being sent from Iran.  Those missiles and drones are being sent every day.  So, it was ironic that the biggest practical danger last week was not the missiles, but instead the torrential rain (see below).

Pictured: Police direct traffic through the river of a motorway underpass, March 2026

It was almost poetic - the day after Iran threatened to target the UAE’s desalination plants (and there are many of them), the skies opened and a year’s worth of rain fell in one day filling reservoirs.  

So where next for the Iran war

We are still keeping with our two scenarios:

Scenario 1 - Trump/Israel "finish the job"

This is undoubtedly taking longer than Trump wanted, but it remains the optimal outcome for pretty much the whole world - even a post-war Iran.  Russia is really the only big loser in this scenario.

The important changes on the week are:

Saudi, Bahrain and the UAE have all told Trump he needs to finish the job - there was a strong Opinion piece in the Wall Street Journal last week by the UAE Ambassador to the US.  All countries are providing resources, including in the case of the UAE, naval assets to protect the Strait of Hormuz.  Four weeks ago, Saudi and the UAE were squabbling about Yemen; now they are best friends in their resistance to Iranian regional tyranny.

Australia (like the US) has told its citizens to leave the UAE.  Piecing the news together, as an AUKUS partner, there must be a chance then that Australia will also send naval assets to the Gulf.

The US has increased its troop deployment to the region.   I have always found Trump relatively easy to read and there is a reason why you send more troops and amphibious landing craft into a war zone; it does not mean he is planning on taking Tehran, but it probably means certain strategic islands - Kharg for one, and others around the Strait are in his sights.

The UAE is exploring how it can freeze or seize Iranian assets.  Winning a war is about securing cash to keep funding the war machine.   It is critical that Tehran’s access to cash is cut-off.

So, this war is going to take longer, but the alternative does not really bear thinking about.  Iran and its proxies must be defeated completely, or we are going to be doing this all again in a years’ time, which is the danger if Scenario 2 wins the day.

Scenario 2 - Trump calls it a “victory” and leaves (… a mess behind)

Trump is under a lot of pressure at home as we have discussed in earlier letters, and he is not getting much help from the Europeans, who think "this isn't their war".  Trump’s response that "Ukraine is not really his war either, and maybe he should pull out from there too” did not go down too well in Brussels.

Freedom means different things for each of us - be it lifestyle, financial, political thought or religious - and it is about the most precious thing we fight and work for; securing it comes with uncomfortable trade-offs, and it never comes for free.  This time is no different.

Iran, the headless cockroach, has now disintegrated into a series of “terrorist" cells, with no clear leader.  This makes negotiation difficult.  The Houthis are also chipping in from Yemen alongside Hezbollah from Lebanon.  They can all make this painfully long for Trump who really wants to strike a deal and be out of there before inflation starts ticking up too much at home.  

A ceasefire where the current Iranian regime, (if we can call it that), stays in “control" is no “victory” for the ordinary people of Iran, the wider region - and frankly the global economy.  We hope this is not the outcome, but as each day passes it remains a possibility.

What does it mean for the economy: "[US] Inflation projected at 4.2% amid Iran war fears" - OECD

This is one of many headlines we were not expecting to read this year.  The has an impact on interest rates and so whilst earlier this year, we were expecting interest rates to fall through the rest of the year, the risk is now the reverse.  

Source: WSJ, 29/3/26

That inflation risk is feeding into long term bond yields - and you can see above that the 10 year Treasury Bond yield has moved from under 4% earlier this year to now close to 4.5%, but it could have further to run.  As you will remember, bond prices move inversely to yield, and therefore have fallen, so unless you hold very short dated bonds (as we do in OGF), not only have you suffered in equities, but your bonds have been losing you money this year too.

Performance - still bumpy out there, but excellent opportunities for top-ups and fresh capital

I caught up with Cody and the USVIP team last week and the buy signals on technology are seldom brighter than now.  Many software names are down 30-50% this year in the “Saaspocalypse”.  Even Meta is down -20% YTD.  Meta is an incredible cash machine with an unrivalled suite of products more addictive than nicotine.  We did an informal poll across the offices last week - nobody under 30 spends less than an hour a day on Instagram.  My point being whatever regulation governments try and throw at social media, there is nobody coming for Meta’s breakfast any time soon.

(For performance disclaimer please see foot of email.)

On OGF (Balanced), the overall decision to unload some risk before the Iran war has been beneficial.   Our fixed income is all up on the year, because it is very short dated, and we have been helped by our recent commodities position which put in a good week.  Although we cannot avoid the storm in equities completely (and ironically defence was down last week), we are trying to keep the volatility of this strategy low and will look to redeploy the risk we took off as soon as we see some clear water ahead.

On OGG (Growth), I spoke to Justin last week.  He is back in the UAE and looking beyond the Iran war.  He is taking advantage of  equity market prices to close out his fixed income positions and replace with low beta equities, which will take him to almost 100% equities.  He is sticking to his thesis that this is not one of the big 5 events of the last 30 years.  The portfolio has held up well so far.  When the war shows any sign of being over, this fund is poised to move strongly.

On MINC (Managed Income), it remains our lowest risk fund but still with plenty of potential to beat cash returns this year.

Our articles this week:

10,000 Days’ Bryce Smith writes for us that “Long Tech is Non Consensus Again”  

Canaccord’s Justin Oliver comments that "China unveils its most modest annual growth target in over three decades"

Working from home in Abu Dhabi

Mindful of the external environment, our Abu Dhabi team is now working from home "anywhere in the world" until further notice.  We have a great international team there, and the firm has been operating in the cloud from its very beginnings. So although we enjoy our office working environments, it is simple for us to work from home when needed, and investors should not notice any change in response times.  The team will stay on Abu Dhabi working hours.  

Moving to larger offices in Hong Kong

We shall be moving into larger office space in Hong Kong’s Central district after Easter, reflecting the growth of that business - new contact details to follow shortly.  I look forward to being out there in 2 weeks’ time.

I shall be based in Guernsey for the next two weeks as we come up to the Easter holiday weekend.  Wherever you are please stay safe and do reach out for a call or a coffee if we can help at all.  

Please note the Guernsey office will be closed Good Friday 3^rd April and Monday 6^th April.  Our business in Hong Kong will be on public holidays those days and also Tuesday 7^th April.

Wishing all our investors and friends of the firm in Europe a Happy Easter for the coming weekend, and for those in Hong Kong a Happy Ching Ming Festival,

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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“Long Tech is Non Consensus Again", 30/3/26
By 10,000 Days' Cody Willard and Bryce Smith - Advisers to US Technology VIP Fund

For most of the last three years we have lamented that it seems like everyone now wants to be a Revolution Investor like us, and therefore the pitches weren’t as great as they were through most of the 2010's.  The COVID bubble sort of turned everyone on to tech.  If you’ll remember, 2021 was when we saw extreme exuberance in tech.

A few examples:

The explosion of the ARK Innovation ETF (ARKK), which saw its AUM peak at $28.5 billion (now ~$6 billion (down 79% to today)) and price peak at $159.7 (now $65.7 (down 59% to today).

Insane tech IPOs, like those shown below:

Rivian (RIVN), which reached a $153 billion market cap days after the IPO, now $18.74 billion (down 88%)

Coinbase (COIN), which reached a $86 billion market cap shortly after its IPO, now $43 billion (down 50%)

Coupang (CPNG), which reached a $73 billion market cap shortly after its IPO, now $33.4 billion (down 45%)

And many more

Insane SaaS multiples, which peaked at around 20 Enterprise Value/Sales (fwd) for the average SaaS company, now down to about 3 EV/S (down 85%):

Cryptomania

The SPAC Bubble (see below)

The excesses of 2021(despite the mini-crash in 2022) created a generation of investors that loved all things tech by default, regardless of the risk level.  That attitude largely persisted for most of the last three years and because of that we found ourselves being more in the consensus than we were in the prior decade.

Back in the 2010s, when I’d first met Cody, I remember that most of the time I found myself frustrated with the market because it didn’t seem to understand how incredibly valuable these companies and their platforms were.  For quite a long time, Apple, for example, traded at a large discount to the market (I think it even had a single digit EV/P for a while).  I’m sure I could find plenty of old social media posts somewhere of me lamenting how cheap Apple was and pounding the table on the stock.

Revolution Stocks went up huge ever since those days, of course.

Valuations for tech companies are once again relatively cheap, and there is once again basically no premium on tech stocks relative to non-tech stocks, and for the first time in a long time, we find ourselves pounding the table on tech valuations.

In addition to tech companies being cheap back in the 2010s, they were also highly misunderstood.  A lot of people in the early days didn’t understand how they were platforms with incredibly powerful self-reinforcing ecosystems.  When Cody was talking about the “App Revolution,” it was truly a non-consensus idea even though in hindsight it seems obvious.

The reason this is relevant is because we feel like now for maybe the first time in six years, tech is undervalued compared to the rest of the market, and also highly misunderstood.  We really don’t think much of the market understands why the big AI companies are spending so much on capex.  They don’t see how it will generate a return. And they don’t understand how truly Revolutionary AI and agents, and ultimately robotics and space will become. They think that AI and robotics will kill jobs, and therefore the economy.

This line of thinking has become so mainstream that in the last couple of weeks, we’ve seen major banks like JP Morgan and Goldman Sachs publish reports advising their clients to sell companies that do things in the digital world (like most tech companies) and only buy stocks in companies focused solely on the physical world (mining, industrials, commodities, etc.).

While it can be frustrating for most people to invest at times like these, when we look back we see that Apple and the others presented the best opportunities when they were the most misunderstood.  There is a lot of room for upside for our stocks over coming years as more people start to get a grip on what’s actually happening with these Revolutions.  We don’t know whether’s it’s next week or next month, but we’re confident that these Revolutions will inevitably prove themselves over time, and at that point people who left tech will be chasing the stocks higher.  And we will have been here the whole time and have much lower cost bases.

The market does not universally love tech anymore, and that’s a new phenomenon in the context of the last six years. And that’s ideal; that’s our pitch. And we cannot be too frustrated while this is happening. We are no longer lamenting being in the consensus, and we recognize that’s a sign of an opportunity, not that we are wrong.

We’ll leave you with one of our favorite pieces of wisdom that we learned from one of our good friends who runs a large fund “you can have good prices or good news, but you can’t have both.”

Bryce Smith

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“China unveils its most modest annual growth target in over three decades", 30/3/26By Canaccord’s Justin Oliver – Adviser to the Opus Global Growth Fund

Earlier this month, China unveiled its most modest annual growth target in over three decades, aiming for GDP expansion of just 4.5%–5.0%, which is the slowest pace of growth since 1991.

Incoming data suggest even this restrained objective may prove challenging.  The issue is not simply the pace of growth, but the widening divergence between the two pillars underpinning President Xi Jinping’s economic strategy: exports and domestic consumption.  One is accelerating; the other is losing momentum, and the gap between them is becoming increasingly problematic.

After a record-breaking 2025, exports surged 21.8% in the first two months of 2026, reaching $656.5 billion, which is roughly equivalent to Sweden’s annual economic output. This marks the strongest start in four years, achieved despite ongoing US tariffs. Even a sharp 11% drop in shipments to the United States was more than offset by increased trade with Southeast Asia, Europe, and Latin America. However, this external strength, alongside a record $1.2 trillion trade surplus last year, is failing to translate into stronger domestic conditions. Retail sales rose just 2.8% year-on-year in the first two months of 2026, the weakest start to a year outside of the pandemic period since 2000. And this softness precedes any potential economic fallout from geopolitical tensions in the Middle East.

At the heart of the issue is a deepening imbalance within the Chinese economy:

(1) A widening two-speed dynamic

China’s bifurcated growth model is not new, but the disparity is becoming more pronounced. Policymakers continue to rely on short-term stimulus measures, such as subsidies for appliances and vehicles, rather than addressing structural weaknesses. As long-time China observer Stephen Roach has argued, Beijing has yet to implement the comprehensive social safety nets required to unlock sustained domestic demand. His verdict on the latest Five-Year Plan is blunt: it reiterates promises made repeatedly over the past 15 years.

(2) Weak consumer momentum

Efforts to rebalance the economy toward consumption date back to the final years of Hu Jintao’s presidency.  The aim was to reduce reliance on State-Owned Enterprises (SOEs) and foster a more consumption-led model. Under Xi, however, the emphasis has shifted toward stability and control. Rather than fundamentally reshaping the system, policymakers have pursued a dual-track approach, maintaining the existing structure while investing heavily in advanced manufacturing and technology.

(3) Industrial success, domestic strain

China’s industrial policy, particularly initiatives like “Made in China 2025”, has delivered clear results. Companies such as BYD have overtaken Tesla in EV sales, while Chinese firms are making rapid advances in AI and renewable energy. Yet beneath these successes, the domestic economy is lagging. This increasingly pronounced “K-shaped” trajectory risks undermining confidence in further reform efforts.

(4) The savings overhang

The ongoing property downturn remains a central drag on growth.  With approximately 70% of household wealth tied up in real estate, falling property values are eroding confidence and discouraging spending.  At the same time, local governments, historically reliant on land sales, are facing mounting fiscal pressures. While lower land costs are benefiting manufacturers, the broader effect is to reinforce the imbalance between a strong production base and a weak consumer sector. This dynamic helps explain why robust export performance is not feeding through into wages. Provincial data from 2024 showed nominal wage growth of just 1%–2%, which is effectively negligible in real terms for an economy of China’s scale.

(5) External risks from energy markets

Rising geopolitical tensions, particularly involving Iran, could push energy prices higher, further constraining manufacturers’ ability to raise wages. This runs counter to policymakers’ stated objective of boosting household incomes without undermining industrial competitiveness.

(6) The missing safety net

A critical unresolved issue is how China will navigate the transition toward a more technology-driven economy without exacerbating unemployment and income inequality, particularly among younger workers. The absence of a robust welfare system, long advocated by institutions such as the International Monetary Fund, raises questions about the sustainability of this shift.

Roach has proposed a clear benchmark: increasing household consumption to 50% of GDP by 2035. Even that would remain low by international standards, but it would mark a meaningful improvement on the current level of roughly 40%. For now, however, such discipline appears lacking.

Despite repeated pledges since 2013 to strengthen domestic demand, the data tell a different story. In 2025, net exports made their largest contribution to GDP growth since 1997. Yet even this pillar may prove less reliable going forward, given rising geopolitical risks and the absence of a clear strategy to navigate them. Against this backdrop, even China’s relatively modest growth target may prove optimistic.

While the latest Five-Year Plan offers limited macroeconomic detail, it places heavy emphasis on artificial intelligence, referencing “AI” more than 50 times across its 141 pages. The strategy outlines ambitions to lead globally in areas ranging from quantum computing to robotics, with policymakers asserting that China is already at the forefront of innovation. Investors, however, appear unconvinced. Alibaba Group and Tencent Holdings saw a combined $66 billion wiped off their market value in just 24 hours, reflecting doubts about the sector’s ability to generate meaningful returns from AI investments. What are the reasons for such scepticism?

(1) Heavy spending, unclear payback

China’s leading technology firms are committing vast sums to AI infrastructure.  Alibaba alone plans to invest $53 billion over three years. Yet investors are questioning whether these outlays will translate into sustainable profits, particularly given already elevated expectations.

(2) Disappointing earnings signals

Alibaba’s recent results, featuring a 67% drop in quarterly net income and underwhelming revenue growth, highlight the gap between ambition and execution. CEO Eddie Wu’s goal of scaling AI and cloud revenues to $100 billion annually within five years has done little to reassure markets.

(3) Intensifying competition

Low barriers to entry in China’s AI software sector are fuelling rapid competition, raising the risk of overcapacity and limited differentiation. At the same time, Chinese consumers have historically shown limited willingness to pay for digital services, complicating monetisation strategies.

(4) Policy constraints

The Chinese Communist Party’s role in directing AI development, focusing on areas such as national security and industrial efficiency may limit innovation at the margins. This top-down approach risks narrowing the range of commercially viable applications.

(5) Structural limitations

There is also an inherent tension between China’s tightly controlled information environment and the open data flows that underpin advanced AI systems. As highlighted in academic research, this “walled garden” dynamic may constrain the evolution of domestic AI models.

Taken together, these factors help explain why investors remain cautious. Despite rapid technological progress and strong policy support, China’s AI sector has yet to demonstrate a clear and scalable path to profitability, leaving markets to question whether the current wave of investment will ultimately deliver the returns policymakers are hoping for.

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 29/3/26. 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 29/3/26, I shares for CIM Dividend Fund, F shares for PHC Global Value Fund.

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