In today’s rapidly evolving market, investors need to stay on top of the latest trends and themes that fuel growth. In this quarterly publication, we offer our market commentary across our themes, covering new opportunities and potential challenges. By providing a deeper understanding of our themes, we aim to help you make more informed investment decisions and achieve your investment goals.

Innovation¹

During the third quarter 2025, broad-based global equity indexes pushed higher as the markets digested and weighed the trade-offs between tariffs, labour weakness, and geopolitical uncertainty, on one hand, versus deregulation, tax incentives, and Federal Fund Rate cuts, on the other. In our view, the innovation space is not only recovering but also being revalued. Headwinds that once pressured disruptive technologies are shifting into structural tailwinds, supported by broadening market participation, favourable policy shifts around crypto, AI, and healthcare, and potential fiscal catalysts like depreciation relief associated with OB3 (The One Big Beautiful Bill). OB3 could position the United States among the most tax-competitive economies globally, improving returns on invested capital (ROIC) and attracting meaningful foreign direct investment.

Artificial Intelligence And Robotics²

Artificial intelligence and robotics companies benefited meaningfully from a supportive policy and macro backdrop in the third quarter. The US administration’s One Big Beautiful Bill (‘OB3’) enabled full expensing of software, R&D, and capital equipment, enhancing after-tax cash flow for innovation-driven sectors. At the same time, the AI Action Plan and Executive Order 14179 emphasized deregulation and public sector adoption, reinforcing AI as a national priority. These developments, combined with commercial advances in large language models and automation, strengthened investor conviction in the long-term value of AI infrastructure and robotics.

Genomic Revolution³

Genomic innovation staged a quiet resurgence in the third quarter, with the ARK Genomic Revolution UCITS ETF outperforming broad equity benchmarks. Long viewed as a ‘sleeping giant’ within ARK’s innovation platform, the multiomics and precision therapeutics space benefited from a shift in sentiment as capital conditions improved, biotech M&A discussions re-emerged, and regulatory clarity began to take shape. Despite multi-year headwinds tied to higher rates, cash burn sensitivity, and risk-off sentiment, underlying science has progressed rapidly. Breakthroughs in base and prime editing, multiomic diagnostics, and in-vivo gene therapy have continued to de-risk platform companies across the space. With scientific momentum intact and investor interest returning, we believe this segment could represent one of the more underappreciated sources of upside within innovation portfolios.

Circular Economy

The third quarter of 2025 delivered clear evidence that the circular economy transition is entering a scale-up phase, backed by regulation and corporate capital. In September, the European Parliament approved a textile extended producer responsibility (“EPR”) legislation and binding food-waste reduction targets under its revised Waste Framework Directive.⁴ This effectively embeds the cost of waste into product pricing and creates a structural tailwind for recycling, sorting and materials-innovation firms. Complementing this, the EU finalised new battery-recycling efficiency and material-recovery rules, setting quantitative targets for lithium, nickel and cobalt recovery, critical materials for the continent’s decarbonisation and supply-chain resilience.

In the U.S., momentum built through implementation of California’s packaging expended producer responsibility law (SB 54) and battery-embedded product regulations (SB 1215), both of which will push costs upstream and spur innovation in packaging reuse, reverse logistics and e-waste recovery.⁵ Together, these policies are setting a new global benchmark for product responsibility.

On the corporate front, GM and Redwood Materials (a battery-recycling and materials-recovery company founded by Tesla’s former CTO) launched a large-scale programme to repurpose EV batteries for stationary energy storage, with a view to solve the challenges of powering data centres.⁶ Second-life batteries from GM have already gone through Redwood’s process into a 12 megawatt microgrid at the company’s headquarters in Nevada. Electricity flows to a nearby 2,000 GPU data centre owned by AI infrastructure company Crusoe.

For investors, these moves underscore accelerating policy certainty, maturing technology economics and growing brand participation, all of which signal that circular-economy assets are shifting from niche to necessity.

Sustainable Future Of Food

In Q3 2025, two ag-tech breakthroughs stood out as fascinating examples of how farming could change at scale.

California-based smart farming company Monarch revealed a modular AI/autonomy platform known as MonarchOne. This involves the fully electric, autonomous-capable MK-V tractor, which has already logged over 100,000 commercial hours in real farm settings.⁷ MonarchOne packages autonomy, assisted driving, energy management, real-time data, over-the-air updates and embedded software into plug-and-play modules that original equipment manufacturers such as John Deere, Kubota, AGCO or CNH Industrial, can license and integrate instead of building from scratch. That means tractor, sprayer, and planter makers can accelerate development using Monarch’s “brain” for features like row following, vision autonomy, energy routing, etc. Because farms are messy and dynamic (mud, weeds, uneven ground), Monarch validates its system in what they call “MUD” (Messy, Unstructured, Dynamic) settings. They’ve already struck a partnership with Ag Growth International to integrate MonarchOne into equipment lines.

Another game changing development was Earth imagery company Planet Labs’ Tanager-1, a hyperspectral satellite offering 400+ spectral bands of Earth imaging data.⁸ Instead of taking pictures in just three colours (red, green, blue) like normal cameras, it captures hundreds of narrow colour bands across the light spectrum from visible light all the way into infrared. In collaboration with the Carbon Mapper Coalition (a non-profit partnership that uses satellites to detect and map methane and CO₂ emissions), it tracks “super-emitters” and provides highly detailed spectral views over farmland. Early results show solid radiometric performance across 400–2500 nm at ~30 m resolution. For agriculture, this means detecting nutrient stress, water stress, disease onset earlier and more precisely than before. Also, linking emissions data to specific plots opens doors for carbon markets and regenerative incentives.

MonarchOne de-risks the autonomy bet by turning it into a modular, scalable component that multiple hardware OEMs can adopt. Tanager-1 is pushing hyperspectral data into the realm of commercial agricultural value. In other words, imaging is getting smarter and monetisable. Together, they hint that the next wave of ag-tech will not be incremental sensors, but intelligence platforms marrying hardware and satellite layers at scale.

Environmental Impact⁹

According to an Ember report released in September, electrotech technologies such as solar, wind, batteries, EVs, and heat pumps are now capturing two-thirds of global energy investment and already contribute 10% of global GDP growth. They are around three times more energy-efficient than fossil systems, which waste two-thirds of input energy, and costs fall by about 20% with each doubling of deployment. These feedback loops are driving the structural shift from burning fossil commodities to manufacturing clean technologies.

China exemplifies the acceleration: it delivers 60% of global EV sales, half of new solar capacity, and two-thirds of global power-demand growth since 2019. Emerging markets, from India to Mexico, are following suit. Around 63% now generate more solar power (as a share of electricity) than the US. As electrotech cascades through these regions, fossil imports could fall by 70%, saving $1.3 trillion annually and enhancing energy security for over 80% of the world’s population.

For investors, this is not a marginal transition but a new industrial era. Electrotech is cheaper, faster, and more secure – an unstoppable flywheel of innovation. Like the IT revolution before it, this manufacturing-led energy transformation will define industrial competitiveness, unlock new productivity gains, and drive the next phase of global growth.

Global Sustainable Infrastructure¹⁰

For decades, climate leadership in developed economies has often centred on a mix of moral grandstanding, photo ops, and bureaucratic “net zero” roadmaps. But the real climate revolution isn’t happening in Brussels or Washington. It’s unfolding in Karachi, Lagos, and Nairobi, where renewables are taking over not because of ideology, but because they’re cheaper, faster, and more reliable than the old fossil infrastructure. The Global South is decarbonising by doing what markets do best: following the money, not the slogans.

Many critics in the West argue that green policies come with heavy costs, but in much of the developing world, the calculus is different. When power grids are unreliable and fuel is expensive, renewable energy isn’t ideological, it’s practical. While political debates in advanced economies often get bogged down in culture wars, emerging markets are demonstrating that clean energy can make economic sense on its own. The irony is that the West talks the loudest about sustainability, yet much of the real progress is happening elsewhere quietly, and without the rhetoric.

Sustainable Infrastructure is well positioned to capture this shift, with a significantly higher allocation to emerging markets than traditional infrastructure and major market exposures. Recent performance attribution shows that much of the fund’s outperformance stems from this regional tilt — roughly 20% exposure to emerging markets versus just 10% for the MSCI ACWI. In other words, sustainable infrastructure isn’t just aligned with the new geography of clean energy leadership — it’s already benefiting from it.

Cybersecurity And Data Privacy

One of the defining cybersecurity stories of Q3 2025 was the Jaguar Land Rover (“JLR”) cyberattack, which forced the automaker to halt production at several UK plants.¹¹ The incident, widely attributed to a sophisticated ransomware group, marked a new chapter in the evolution of industrial cyber threats. Unlike the traditional focus on stealing or leaking data, the attackers targeted operational systems, disrupting assembly lines and supply networks for weeks. The resulting downtime underscored how cyber risk now extends far beyond corporate IT departments into the physical economy and has the potential to more tangibly impact bottom lines.

For JLR, the reputational and financial damage was immediate. Suppliers faced cascading delays, and the company scrambled to restore manufacturing while insisting no customer data had been compromised. However, the wider significance of the attack lies in its symbolism. Industrial control systems, once isolated, are now deeply interconnected and therefore vulnerable. As the UK’s largest carmaker, JLR became an example of how automation, efficiency, and digital integration have also expanded the attack surface for cybercriminals to exploit.

The JLR breach echoed other high-profile incidents this quarter, including attempts to extort cloud and enterprise clients at Oracle and renewed ransomware campaigns across logistics. Collectively, these attacks reveal a maturing threat landscape in which hackers pursue operational leverage rather than pure data theft. For governments and corporates alike, the last few months have served as a reminder that resilience is not about perimeter defence but about continuity, ensuring production, safety, and trust can survive even when systems fail.