A bumpy quarter – and why we’re not worried about your child’s future

If you checked your child's Stargazer Fund this quarter and felt a small knot in your stomach… that's completely understandable! Some of the funds show a dip, so we're going to explain clearly what happened, why and - most importantly - why we believe markets will weather this storm.

What's going on in the world

In the first quarter of 2026, the world was shaken by a sharp escalation of conflict in the Middle East. The direct consequence of this was a significant disruption to global oil supply - and when oil becomes scarce and expensive, the effects ripple outward fast. Energy costs rise and food costs follow. Governments worry about inflation, and nervous investors pull money out of markets as they wait to see how things settle.

The oil shocks of the 1970s, the food crises of the 2000s and the pandemic supply scramble all showed that these disruptions, while painful in the short term, do resolve. Conflicts end, supply chains adapt and markets recover. Markets have a remarkable track record of finding their footing again.

The decision you made when you opened this fund - to invest steady and long - is the right one for times like this.

South African investors should also be aware that global uncertainty spikes tend to strengthen the US dollar - which means a weaker rand. While this sounds ominous, it actually softened the blow this quarter: your child's fund holds global assets, which are worth more in rand terms when the dollar is strong. It's one of the quiet benefits of international diversification.

Your child's fund this quarter

Stargazer Blue: -3.8%

Stargazer Blue invests in global technology and innovation companies: the businesses building the future your child will grow up in. These are also the companies most sensitive to inflation fears, because their value is tied to long-term earnings that get squeezed when interest rates rise. The fund fell 3.8% in rand terms this quarter, though the weaker rand cushioned what would otherwise have been a steeper drop (the underlying index fell 4.6% in US dollar terms). This is a short term reaction to a specific crisis; the long-term case for innovation and technology remains as strong as ever.

Stargazer Green: +0.5%

There's good news here: Stargazer Green closed the quarter in positive territory, up 0.5%. Its focus on companies with strong environmental, social and governance practices meant it held up well: energy, materials and utilities companies in the portfolio actually benefitted from rising commodity prices. Technology and financial stocks were a drag, but not enough to pull the fund into the red. This is the resilience that responsible investing is designed to deliver.

Stargazer Yellow: -0.9%

Stargazer Yellow is a balanced fund spread across asset types, so it doesn't swing hard in either direction. South African resources stocks helped this quarter, as did the rand's effect on international holdings. Drag came from domestic industrial and property sectors and global technology exposure. The result was a modest dip of -0.9%, a gentle wobble for a fund built specifically to absorb shocks like this one.

A note on what really matters

Your child's Stargazer Fund is measured in years and decades, not in quarters. A dip like this, even an uncomfortable one, is a normal part of market movements over time. The families who come out ahead are not the ones who react to every headline, they're the ones who stay the course. Your investment is working. Geopolitics will eventually settle. And your child's future is still very much on track.

Best regards,

The Sygnia Stargazer Team

This newsletter is for informational purposes only. Past performance does not guarantee future results. Please consider the risks associated with investing before making investment decisions.