Northern Active M International Equity Fund Rose 11.22% in Q2, Beating Benchmark; AI Demand Exceeding Supply Supports Earnings Growth

Core Takeaways / TL;DR

• Northern Active M International Equity Fund rose 11.22% in Q2 2026, beating the benchmark MSCI World ex USA IM Index by 1.32 percentage points.
• Excess return came mainly from stock selection in sectors such as information technology, as well as country allocation in Singapore, the UK, and Japan.
• Subadviser Alliance Bernstein's underweight in information technology dragged relative performance.
• Invesco global market strategist Brian Levitt notes that AI chip, data center, energy, and computing power demand already exists and exceeds supply, which can support earnings growth.
• Brian Levitt believes the Citadel bailout was an idiosyncratic event, not a systemic risk, and the rapid rebound in tech stocks shows underlying market strength.

Fund Performance: How Did Northern Active M International Equity Fund Perform in Q2?

Northern Active M International Equity Fund rose 11.22% in Q2 2026, beating its benchmark by 1.32 percentage points. Data comes from Seeking Alpha's August 24, 2026 Fund Quarterly Commentary.

Over the same period, the benchmark MSCI World ex USA IM Index rose 9.90%. Excess return came mainly from stock selection and sector allocation, with the information technology sector being a key driver.

Specific data are as follows:

Metric	Fund Performance	Benchmark Performance	Difference
Q2 2026 gain	11.22%	9.90%	+1.32%

The fund invests in developed market equities outside the U.S., and the information technology sector played a key role in the portfolio. Stock selection and sector allocation together drove the fund's outperformance.

What Factors Caused the Fund to Outperform or Underperform Its Benchmark?

The fund's excess return relative to its benchmark came mainly from stock selection in sectors such as information technology, as well as country allocation in Singapore, the UK, and Japan; however, subadviser Alliance Bernstein's underweight in information technology dragged relative performance. Positive and negative factors coexisted, and the fund still achieved positive excess return overall.

• Positive contributors: Stock selection in the information technology sector stood out, bringing significant excess return; country allocation in Singapore, the UK, and Japan also contributed positive returns.
• Negative drag: Subadviser Alliance Bernstein's underweight in the information technology sector missed part of the upside, dragging the fund's overall excess return.

The attribution above comes from the fund's quarterly commentary. Position-level details and specific contribution figures were not fully disclosed, so investors should use additional data to make their own judgments.

Why Can AI Demand Support Current Earnings Growth?

Invesco global market strategist Brian Levitt notes that AI chip, data center, energy, and computing power demand already exists and exceeds supply. This view is based on real orders rather than concept hype, and it can support earnings growth.

Unlike the 2000 tech bubble, current AI demand is an actual shortage. This view comes from Seeking Alpha's August 24, 2026 article "Above the Noise: AI, Earnings, and Permabears".

• Chips: AI training and inference chips are in short supply, and order visibility is relatively high.
• Data centers: Cloud providers and tech giants continue to expand, with electricity and computing power demand rising in tandem.
• Energy: AI data centers consume huge amounts of electricity, driving investment in power infrastructure.
• Computing power: The growth rate of model training demand is faster than computing power supply.

What Does the Citadel Bailout Mean for the U.S. Stock Market?

Brian Levitt believes the Citadel bailout was an idiosyncratic event rather than a systemic risk. Sufficient capital stepped in, and losses in the tech sector quickly reversed, reflecting underlying market strength.

The market did not experience a liquidity crisis because of a single case. The above interpretation is a personal view and needs more data for verification.

• Idiosyncratic event: Citadel's bailout was triggered by a specific risk event, not by problems across the entire financial system.
• Sufficient capital injection: The market had enough capital to respond quickly and prevent risk from spreading.
• Rapid tech rebound: Related losses reversed within a short period, showing strong buying power.

Summary

Northern Active M International Equity Fund's 11.22% gain in Q2 2026 shows that active management can still generate excess returns in international equity markets. Although U.S. stock market conditions may be volatile in the short term, the logic of AI demand exceeding supply provides fundamental support for tech earnings growth. The Citadel bailout event also validated market depth. For investors focused on international equities, U.S. stock market trends, and the AI industry chain, these data points are worth monitoring.

Note: This content is for informational purposes only and does not constitute investment advice.