10 for 10 One (And a Bit) Years On

Marking your own homework is rarely a good idea. Depressed, or smug, the usual outcomes. Still, curiosity gets the better of me. Let’s hope this mog makes it out alive. As a reminder, the premise here is that some tides are inexorable. But that this inexorability is made explicit on a timeframe measured in decades not months. For example, there is a high probability that, in 10 years’ time, the world’s population will be older, better armed, more electrified. At the end of 2024, across two notes I identified 10 such tides I expected to profoundly manifest over the next decade, and suggested a basket of stocks for each that might reflect the cui bono.¹

The results…

…were good. Figure 1 doubles as a reminder of what the 10 themes were, while also showing the percent total return of the pre-defined basket, in excess of MSCI World, since publication. I’m giving myself 9/10 and a sticker.

Figure 1: 10 for 10 baskets, performance versus MSCI World

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Past performance is not indicative of future results. Source: Bloomberg, Man Group. Date range: 1 January 2025 - 11 February 2026. Relative performance is against MSCI World TR. Performance analysis has been conducted on representative baskets we selected across the 10 themes: ageing demographics, automation, electrification, nuclear, defence, India, infrastructure, gold miners, Japan corporate governance reform beneficiaries, oil and gas services. This analysis is based on our research and is intended for illustrative use based on considerations listed in this paper and should not be construed as a recommendation and should not be relied on.

Gold miners were one standout performer, benefitting from the historic rise in the underlying, itself benefitting from the US dollar debasement trade. Uranium miners were the other, boosted by the rush to nuclear (or indeed any) power, to turn on all the chips. But indeed all of Japan corporate governance (right for the wrong reasons, let’s face it), defence, oil and gas services (flattered by the last two months, suddenly some new work to do…), automation, infrastructure and electricity are doing very nicely. And while I’m in this hot bath of self-congratulation, see overall performance in Figure 2.

Figure 2: 10 for 10 portfolio versus MSCI World, inception to date

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Past performance is not indicative of future results. Source: Bloomberg. Date range: 1 January 2025 - 11 February 2026. Performance analysis has been conducted on representative baskets we selected across the 10 themes. This analysis is based on our research and is intended for illustrative use based on considerations listed in this paper and should not be construed as a recommendation and should not be relied on.

India was the one complete miss, compounded by a double-down note in July last year.² A former Man Group colleague, who knows the space well and who I won’t embarrass by naming, told me it was stupid on the basis of creeping authoritarianism and cosying up to Russia. I ignored her recommendation at the time, but so far, it has transpired, particularly the latter.

Where are we now? Theme performance

My desk neighbour Richard Barclay, a sometimes-willing sounding board, put the fair question to me: what if a 10-year theme doesn’t unfold linearly? Because, of course, things rarely do: if you’re expecting a particular theme to run at a 20% compound annual growth rate (CAGR) over a decade, but it does 100% in year one, that presumably has some bearing on your new 10-year outlook. There is a roll component to long termism, if you’re pretentiously inclined.

There’s a long and purist approach to this, and a quick and dirty one. I’ll go with the latter for now. What if you had perfect 10-year hindsight to know which granular sector would beat the market by the most? What levels of excess returns could you expect? Speculate no more. In Figure 3, I show the 10-year annualised excess-to-market return of the best performing of the Fama-French 49 industry portfolios. Coloured according to the sector responsible for the navy blue line.

There’s lots of interesting detail to get lost in. Oh the glory days of 1945-47 and 1992-97 when beer ruled the world. Coal’s stratospheric relative performance in the first decade of the 20th century, as China’s cyclical boom went its own way while the general market endured two halvings. But for our purposes, the real interest is in what a big number looks like. Annualising north of 15% outperformance in any theme should get your attention. Over 10 years this amounts to 318%. Taken together with Figure 1, we can see that the gold miners have enjoyed, in little more than a year, half this total. The nuclear theme has done a quarter. Hold this thought.

Figure 3: Relative 10-year annualised performance of top performing sector

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Past performance is not indicative of future results. Source: Bloomberg. Date range: 1 June 1936 - 11 February 2026.

Where are we now? Theme valuation

At the end of the second of the two original 10 for 10 notes, I made the point that, by nature, thematics are usually expensive. I’m not an efficient market hypothesis (EMH) guy (obviously), but if you’re going to concede that the market has at least a little competence (which I do), then a structural long-term growth opportunity will have a higher multiple, more often than not. At the time, I made the point that this premium should be seen as an insurance premium against regime change, the theta decay of a call option on the future.

I still think this. Figure 4 updates the table I showed at the end of that note. For 6/10, the theme has become more expensive, as events have concentrated the market mind on the relevant thesis. Since I wrote the original paper, the US bombed Iran and captured former Venezuelan president Maduro, all while the war in Ukraine continues to rage. The second of which has potentially opened entirely new energy assets to exploit.

Admittedly, there are four themes which have got a lot cheaper. At least optically. The nuclear move is something of an illusion, given there are very few publicly listed names in the uranium complex, and our basket contains just five names and is therefore prone to nonsensical moves. In reality it’s still very expensive, and probably more so. Cameco, for example, widely viewed as the industry bellwether, has re-rated from 44x to 72x.

For India, ageing and automation, however, the result feels true to life. India, as we have already discussed, is putting itself on the wrong side of geopolitical cross-currents, even if that does now appear to be hinting at a resolution. Ageing demographics has been de-rated largely – I think – off the back of the GLP1 revolution. Even if the purveyors of these medications have been having a famously torrid time, the uptake of the jabs has been as large as the waistlines they target. This has had all sorts of ripple effects, one of which has been the market pricing a smaller market for obesity-related procedures (hip replacements, for instance) later in life. In the case of automation – which in our basket tilts toward physical mechanisation – there has been a TV-pessimism driven by China’s industrial slowdown, and a derating of anything exposed to factory floor capital expenditure (capex).

So, it’s not one-way traffic. Still, if you’re still chugging away with your Graham & Dodd price-to-book ratios, this is not the portfolio for you.

Figure 4: Valuation change in the 10 themes

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Past performance is not indicative of future results. Source: Bloomberg, Man Group. Date range: 1 January 2025 - 11 February 2026. Relative performance is against MSCI World TR. Performance analysis has been conducted on representative baskets we selected across the 10 themes: ageing demographics, automation, electrification, nuclear, defence, India, infrastructure, gold miners, Japan corporate governance reform beneficiaries, oil and gas services. This analysis is based on our research and is intended for illustrative use based on considerations listed in this paper and should not be construed as a recommendation and should not be relied on.

10 for 10 changes

Thinking back to the original notes, the whole point was to identify the themes you would want if you were locking the box and only getting the key back in 10 years. Still, given, as discussed, a theme’s unfolding is rarely linear, we should at least consider adjustments, particularly in the case of the gold miners which, as shown, have performed way in excess of what we might reasonably expect the bullseye sector to generate. Allow me a few words on this before I finish.

Gold the metal is very expensive irrespective of which valuation framework you use.³ Inflation-adjusted price, multiple of extraction cost, other commodity relatives, proportion of global wealth, real rate relation… pick whichever you want, you’ll get the same answer. The miners, on the other hand and per Figure 4, are very reasonable, bottom quartile, indeed. So, yes the return in Figure 1 is pretty nuts, but the move in the underlying is a full-on bag of cats. The catch-up is still on, in my view.

Of course, on the day that there is a big down move in the yellow metal, the kneejerk will still be to sell the miners, and likely more so, given the operating leverage. On 30 January when gold fell 9%, the stocks were down 13%. But, as I keep saying, the whole point of this portfolio is to ride out these gyrations. And on a long view, these guys are printing cash like Jay in 2020. The most conservative estimates of cost of production-weighted extraction might be around US$1,500. My back of the envelope says the underlying could fall 40% and you’d still have a 100% margin.

One of the tales of 2026 to date has been the evaporation of Tech hyperscaler free cashflow (FCF), as the behemoths have outcompeted each other for ever more Austin Powers sums of capex. Many of these names have gone from being FCF saints to sinners, and the market is starting to get concerned. Meanwhile, the gold miners have cruised in the other direction. Figure 5 shows the 12-month forward FCF yield of Alphabet and Newmont over the last three years. At the start of this period the former is throwing off 6%, the latter 4.5%. Today the scores are at 1% to 7%, the other way around.

So, yes, it’s right to ask the question. But no, in my view this theme is not at fruition, at least not to the extent that it can be kicked out. Assuming I make it through 2026, we can re-examine this time next year.

Figure 5: Forward free cashflow yield for Newmont (navy blue) and Alphabet (aqua blue)

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Source: Bloomberg. Date range: 16 February 2023 - 11 February 2026. Forward FCF provided for Newmont and Alphabet. This analysis is intended for illustrative use based on considerations listed in this paper and should not be construed as a recommendation for sale and should not be relied on.

New contenders?

As part of these check-ins we should also consider new contenders. A couple I am mulling over are industrial metals (copper and aluminium, in particular) and cybersecurity. The former is a clear beneficiary of the electrification story and insofar as it pertains to copper, is subject to large demand/supply imbalances in favour of a rally. The latter has been caught up in the 2026 software neurosis. The broad space is down 25% from the highs, and some names far more. To a certain extent we already have exposure: as discussed in the original notes, we interpret ‘defence’ as both physical and digital, given the hybrid nature of modern warfare. But I’m very tempted to add explicitly. The main cyber aggregate index is on a 22x forward P/E, almost half the 40x historic average. And yes, the moat around much of software just became a trickle, but in my view the sell-off lacks discrimination. It’s one thing to vibe code your PowerPoint. It’s quite another to Claude-strap your firewall. Just ask Marks & Spencer. So early warning that this is one I may add soon. But in the meantime, I need to persuade Man to spare me some balance sheet to move this trading from theory to practice.

1. Links for GPT to summarise: https://www.man.com/insights/road-ahead-ten-themes and https://www.man.com/insights/road-ahead-10-for-10-part-2
2. See: https://www.man.com/insights/road-ahead-indian-summer
3. Gold bugs can read more here: https://www.man.com/insights/road-ahead-golden-fears and here: https://www.man.com/insights/road-ahead-gold