The Infusive Consumer Alpha Global Leaders Fund delivered +1.3% in October. The performance YTD is 14.3%. These are net numbers for the USD A share class. This exceeds the Morningstar Consumer Index by ~3.6%. To view a summary of our performance click here.
In October 2025, stock markets climbed as strong company earnings, excitement about artificial intelligence, and lower inflation drove gains—especially for large consumer digital companies. These positive forces helped U.S. stocks and global markets hit new highs, even as some industries and regions lagged behind. Meanwhile, hopes for lower interest rates supported investor confidence, and the gap widened between fast-growing, tech-driven companies and others struggling with slower growth and layoffs.
We continue to believe we are in the infancy of an “AI margin revolution”—not only cementing the dominance of digital-first consumer platforms, but signalling a broader, sector-wide transformation that many market participants have yet to appreciate. As AI adoption spreads, we see escalating opportunity and growing dispersion, opening the next frontier for proactive stock pickers.
Executive Summary
This portfolio continued to benefit from outsized performance in global digital leaders and AI enablers, with Alphabet, Amazon, and Micron Technology all delivering meaningful returns. But the headline story is not just about the obvious winners: crucially, we are now witnessing the early indications of transformative AI across companies in the consumer discretionary and staples sectors. The market’s underestimation of this pending shift, and its potential to rerate select laggards, may catalyze an era of dispersion and alpha for those with granular insight and conviction.
The Expanding AI Margin Revolution
For several years, the “AI effect” on margins, productivity, and operating leverage has been most apparent in digital consumer platforms, cloud-native businesses, and semiconductor supply chains. This month’s attribution again highlights this dynamic—with leading contributors leveraging advanced AI for personalized targeting, logistics optimization, and product innovation. Ironically, it was also AI “leaders” who were our biggest detractors in October, with south east Asian e-commerce giant Sea Limited and Alibaba responsible for the largest losses. From a portfolio construction perspective, this does not surprise us – as we have reduced our holdings, and or sizing, in those companies with no obvious AI strategy and angle.
However, October marked a clear evolution: a pathway to AI-enabled margin expansion in select consumer discretionary and staples—sectors traditionally defined by cost pressures, cyclical volatility, incremental improvements, and slow technology adoption. Data shows that within parts of consumer discretionary, adoption is increasing, such as travel. This could drive revenue or cost advantages, through personalised products and wider distribution. For consumer staples, margin structures—often dictated by scale, input costs, and legacy distribution—are undergoing a quiet revolution as those that embrace AI tools, can compress procurement costs, automate marketing, digitize inventory, and drive down SG&A.
Across categories, there are leaders and laggards. For example, Coca-Cola has been actively using AI across various parts of its business for years, where as PepsiCo has not – it has one of the lowest revenue per employee ratios in our universe. Walmart and Costco have been leading, and Target has been suffering, losing share and customer wallet. Despite the historical outperformance, our analysis suggests that it is becoming much more accessible and cost effective to implement AI.
Whilst cultural adoption remains the most difficult aspect of AI implementation and effectiveness in large firms, the technical barriers to entry are shrinking. Companies must have strong leaders who believe and embrace AI. This responsibility can not be put on middle management. We note that the most successful companies in the world (who also use AI) are run by Founders, who have the conviction to make bold decisions. We expect these changes to accelerate, causing disruption and opportunity.
Market Underestimating the Next Wave
We believe the market risks under-pricing AI’s second-wave impact and its rerating potential for select “old economy” consumer businesses. The focus on consumer digital may have obscured a structural change: as AI adoption broadens, smaller and less glamorous consumer brands that successfully embed automation and data-driven decision-making could dramatically outperform. Sleepy staples or cyclical discretionary names—if they crack the AI code—could surprise on both earnings and multiple expansion. Historically tight valuation dispersions could widen; this is the next chapter in market differentiation, and it is fertile ground for high-conviction, fundamental stock pickers.
Dispersion, Opportunity, and Our Own Experience
Our conviction on this thesis is not merely observational—it’s empirical. Over the past 18 months, we rebuilt much of our internal workflow using advanced AI: accelerating research, enhancing client communication, and optimizing our investment process. The result? Far greater productivity and insight per analyst — proving that better results come from smarter systems, not just more headcount. This “AI leverage” we have proven in professional services now mirrors what the most forward-thinking consumer businesses are beginning to execute: fewer, higher-value employees empowered by industry-specific AI systems. The levers of competitive advantage have shifted.
Outlook: A New Dispersion Era for Stock Pickers
As AI-native cost takeout and margin enhancement spread beyond the digital vanguard, market dispersion will accelerate. Select consumer discretionary and staple stocks may be overdue for multiple rerating if they successfully embed AI; many are early in this journey, and the market will want results before pricing in change. Our focus remains on identifying those at the leading edge of this “second wave”—combining deep sector expertise, on-the-ground research, and AI-powered analytics to capture the next leg of alpha.
Closing
The AI transformation is no longer a story of just big tech—it is rapidly becoming the source of competitive divergence across the full spectrum of consumer businesses. Those able to harness AI for margin and growth will drive the next market regime. As always, our discipline, insight, and forward-leaning process put us in position to capitalize for our clients.
Please contact the team for a deeper dive into the companies and trends reshaping the opportunity set.