Over the past fortnight, markets have been rattled by renewed U.S. tariff threats, shifting geopolitical rhetoric, and fresh signs of fragmentation in global trade policy. What looked like a pro-growth, pro-U.S. policy mandate has instead created an atmosphere of uncertainty and reactionary decision-making—shaking investor confidence and prompting a sharp rotation across global equity markets. 

In this environment, passive index exposure may not be enough—especially in areas of the market like global small caps, where the rules can change quickly and price dislocations can persist. That’s why we see growing value in valuation-driven asset allocation and high-conviction active management. It’s also why we returned to Greg Dean, Portfolio Manager of the Langdon Equities Partners, for a second conversation—this time to explore how the portfolio is navigating the latest volatility and why an active, bottom-up approach is proving especially valuable right now.

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The Setup: Valuation-Led Diversification

Our portfolios have long reflected a structural tilt towards unloved but fundamentally sound markets—regions like Europe, global small caps, and selected emerging markets. These areas were out of favour during the dominance of U.S. megacap tech, but in our view, they offer three key advantages today:

1. More attractive starting valuations: Many stocks in these regions are priced below long-term averages, offering greater downside protection and more scope for re-rating.

2. Lower exposure to crowded trades: These markets haven’t been swept up in the same momentum-driven narratives, making them less vulnerable to a rapid unwind.

3. Diversified sources of return: From niche industrials in Europe to growing consumer franchises in Asia, these markets offer differentiated earnings drivers that can support returns regardless of where the global cycle heads next.

And as we’ve seen in past crises, it’s often the assets that were previously ignored that show surprising resilience—or “good luck,” as Napoleon might have said.

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Case in Point: Langdon Equities Partners

Within this valuation-aware framework, the Langdon Global Small Companies Fund stands out as a compelling example of what active management can deliver in times of uncertainty. The fund has delivered strong downside protection during recent market volatility—not because it made a macro call, but because it stuck to its knitting: deep research, valuation discipline, and a focus on resilient business models.

Langdon’s philosophy is clear: ignore the noise, focus on owning high-quality businesses with good balance sheets, and don’t overpay. The team runs a concentrated portfolio of companies they know inside out—spread across sectors like software, industrials, financials, and consumer goods. Their stock selection is guided not by top-down themes, but by what each business can deliver over time.

This idiosyncratic, company-first approach is what helped the portfolio hold up—even with meaningful consumer exposure—in the face of the latest tariff shocks. When 20% of the portfolio was under pressure, the other 80% continued to compound value. And crucially, they didn’t own software businesses because they were “AI plays”—they owned them because they were cash-generative and reasonably priced.

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Active Management: The Right Kind of Risk

One of the biggest risks right now is not knowing what’s in your portfolio. Many small-cap indices include heavily indebted companies or stocks that have ridden short-lived narratives. In a passive structure, there’s no filtering mechanism for business quality or balance sheet strength—just exposure.

By contrast, Langdon screens out companies where high leverage and uncertainty might be a toxic mix. Their average debt levels are materially lower than the index. Their companies are chosen based on fundamental characteristics, not popularity.

And because Langdon is constantly engaging with company management—touring facilities, asking hard questions—they're able to identify who is genuinely positioned to adapt to the changing environment. That level of due diligence just isn’t possible in a passive approach.

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Where We See Opportunity

Our allocation to global small caps—and to managers like Langdon—is driven by a simple idea: when disruption hits, value and resilience matter most. Markets that haven’t been crowded, and companies that have been overlooked, tend to be the ones that surprise on the upside when conditions shift.

We’re not looking to predict every headline or policy change. But we do believe that portfolios should be built to endure—and, where possible, to benefit from—uncertainty. That means favouring attractively priced assets in unloved regions, and backing managers who think independently, avoid herd behaviour, and focus on the long term.

Langdon’s strategy is a reminder that the best defence in unpredictable markets isn’t retreat—it's a selective, thoughtful offence. And in the current climate, that combination of valuation discipline and active insight may be one of the most important edges investors can have.