Summary of Investor Happening - March 2026
On Saturday, March 21, Value Square held its Investor Meeting on the occasion of the 18th edition of the Value Square Fund Annual General Meeting.
The presentation first outlined the macroeconomic backdrop for 2025, with particular attention to the shifting capital flows between regions and the widely varying factor returns in Europe and the United States. European stocks experienced record inflows: investors deliberately diversified away from concentration risks in the major US indices, making Ex‑US and specifically European equity exposure popular again.
Within Europe, classic defensive factors such as low volatility and quality performed poorly, while value, momentum, dividends and stocks with strong buybacks dominated the return rankings. A style rotation in favor of valuation and cash-driven investments. At the same time, we saw significant differences in the US compared to Europe. In 2025, the US remained a market that remains strongly driven by a limited number of megacaps and by the artificial intelligence narrative.
Zooming in, the macroeconomic context was further developed via interest rates and exchange rates: EUR/USD movements in 2025 were largely explained by the real interest rate differential between Germany and the US, underlining how important divergent monetary policies remain for currencies and capital flows.
In Japan, several structural fault lines came together: an aging and shrinking population, rising prices after decades of disinflation led to policy choices such as the temporary suspension of the 8% food consumption tax to support purchasing power. At the same time, the price history of commodities such as rice illustrated how exceptional the recent inflation peak is in a country that has been struggling with deflation pressure for a long time. Japan also plays a key role in the global financial system through its large position in U.S. government securities — accounting for approximately 13% of all foreign holders — so changes in Japanese policy or exchange rate are relevant to both the yen and the demand for U.S. Treasuries.
More broadly, it was emphasized that investors worldwide should keep an eye on developments in oil and gas prices, inflation, real interest rates in Germany and the US, and the state of the labor market. Because it is precisely these variables that have a direct effect on construction activity, investments, real estate and the valuation of risk-bearing assets.
A central theme was the role of AI in the economy and markets. Despite headlines about a possible “AI bubble”, technology ETFs attracted their highest inflows ever in 2025, with the geographical spread of AI and tech exposure broadening significantly: no longer only the US, but also China, Hong Kong and global mandates became major destinations for capital.
At the same time, a more nuanced question was asked: is there really one big AI bubble, or rather selective overvaluation among certain winners, while the profit growth of a number of Megap‑AI companies partly underpins the high valuations? From a macro point of view, a possible negative feedback loop in the labor market was highlighted: companies invest in AI and automation to protect margins, lay off staff, reinvest the savings in even more AI capacity, with declining employment putting pressure on purchasing power, again triggering cost savings and job losses.
This “white collar erosion” mainly affects the higher educated middle class in sectors such as SaaS (Software as a Service), finance and product management.
In the stock markets, this dynamic translates into a clear shift in style that was summarized in the presentation as the “Halo‑trade” (Heavy Assets, Low Obsolescence). After fifteen years of “asset‑light” being the ideal business model, investors are now moving away from software models that can potentially be replaced by an AI plugin and are moving to companies with heavy physical assets and a low risk of technological aging.
In addition to the macro and market story, the presentation also discussed how Value Square itself uses AI in the investment process. An internal AI model was explained and a proprietary AI orchestrator, “Armand PINS”, that allows automated and flexible business notes generation. Specifically, the system can search financial statements, extract the balance sheet, income statement and cash flow for the last three years, retrieve expectations for the next year via the internet, build a financial analysis and formulate a synthetic conclusion from this in a readable document.
The message to customers was that, with accurate data sources and good orchestration, AI is a powerful way to process huge volumes of information and do fundamental analysis at least as well — and often faster — than humans, but at the same time, it remains very difficult to build sustainable AI applications given the speed at which the underlying technology evolves and the rise of low-cost, locally adaptable models (including from China).
Finally, the macro picture was brought back together in the context of inflation, interest rates and prospects. Inflation swaps (2‑5‑10 years), policy rates from the Fed and other central banks, and labour market developments showed how the market prices future inflation and monetary policy today. These parameters largely determine the discount factor for future profits, credit conditions for companies and households, and thus the sustainability of both valuations and debt levels.
The key message of the presentation was that we live in a world where AI, demographics, geopolitics and monetary policy are increasingly intertwined. Investors are therefore well advised to pay attention to macro signals (inflation, interest rates, labor market, capital flows) and structural trends such as automation at the same time.
