This week's interesting finds

The benefits of being different - 1st quarter, 2026

Investment Team members Sydney Van Vierzen and Steven Lo talk about their Q1 2026 commentaries with Relationship Manager Alex Gramegna. They cover the ways that the EdgePoint Investment Team is structured to avoid biases, the work they do every day to be ready for volatility and so much more.

A few charts worth discussing

“Brent and the S&P 500 have been moving up since the ceasefire. The probability of both continuing to do this is close to 0%.”

- Tye Bousada

“Sell in May and go away?’ Data says otherwise. May has been the 4th best-performing month over the past decade.”

- Greg Sinclair

“With increasing demand for data centres, AI-infrastructure-related debt as a % of the U.S. high yield index has grown meaningfully since last year.”

- Tracey Chen

Other charts worth pointing out

S&P 500 Index drawdowns since 2010

S&P 500 Index – Top 10 stocks relative returns to the rest of the index (equal-weighted)

S&P 500 Index 52-week market breadth

Momentum continues to rise

Sector performance since the start of Iran War

Information Services vs. S&P 500 Index – valuation multiples

Global equity valuations by region and sector

AI adoption vs. new business creation by sector

Student loan balances by debt size

S&P Weighs New Index Rules to Speed Up Addition of Mega IPOs

S&P Dow Jones Indices LLC has launched a consultation that could eventually speed up the entry of mega cap companies seeking to IPO into its indexes, including the S&P 500.

The rule change would shorten the amount of time a company needs to be public before being eligible to enter its indexes to six months versus the current minimum of 12, according to a statement on Thursday, confirming a previous Bloomberg report. The index provider is also weighing new rules that may waive the requirements on profitability and liquidity for large companies.

If approved, the changes would mean that billionaire Elon Musk’s SpaceX could potentially enter the S&P 500 faster, unlocking a wave of billions of dollars in forced buying. Funds that track the S&P 500 must buy newly added stocks, and roughly $24 trillion is tied to the S&P 500, according to Bloomberg Intelligence.

The proposed changes to the seasoning period would apply to eligibility determination for indexes including the S&P 500, S&P MidCap 400 and S&P SmallCap 600. Inclusion in the indexes would still be determined by a committee.

The consultation period is open until May 28 and any changes would be adopted prior to the market open on June 8, according to the statement. That timeline would take place ahead of SpaceX’s expected initial public offering later in June and prior to potential listings for OpenAI and Anthropic PBC, Bloomberg News has reported.

S&P Dow Jones Indices defines a megacap company as one with a total company-level market capitalization equal to or greater than the 100th largest company in the S&P Total Market Index. That would include companies valued greater than roughly $112 billion as of the end of 2025, the statement shows.

SpaceX could seek to raise as much as $75 billion at a valuation in the IPO of more than $2 trillion, people familiar with the preparations have said.

Nasdaq is enacting a rule change to speed up the inclusion of newly listed, large-cap firms to enter its flagship Nasdaq-100 Index. FTSE Russell, which proposed to shorten an IPO’s waiting period to five trading days, concluded its consultation earlier this month and has yet to make an announcement.

This week’s fun finds

Julie, from the Institutional Team, brought the Toronto Beaches to the EdgePoint office for her Moai this week. It was a nice way for the team to connect over bold flavours and great conversation. Thanks Julie!

Tennis Balls Are Bright Yellow Thanks, in Part, to Sir David Attenborough — Here's Why

Tennis balls are the bright yellow color that they are known for today, thanks in part to Sir David Attenborough.

In an article penned for The Radio Times, the British broadcaster and naturalist, 97, said that, as controller for BBC channel BBC2 in 1968, he was responsible for bringing color television to the U.K. for the first time that year.

This week's interesting finds

First quarter commentaries are now live! 

This quarter, Sydney Van Vierzen talks about behavioural pitfalls of the asset management industry and how the EdgePoint Investment Team is structured to avoid them, while Steven Lo discusses the behind-the-scenes work that the Investment Team does before buying a security and how it helps them act quickly when volatility inevitably occurs.

A few charts worth discussing

“How oil is at $95 -- instead of, say, $295 -- is perhaps the mystery of our time. You can buy WTI oil for December 2026 delivery at $77.40 as of Friday morning. And airlines are cancelling flights?”

- Derek Skomorowski

“Industry change in CT scans – new technology that reduces radiation and increases image clarity – rapid product adoption.”

- Stas Lopata

Other charts worth pointing out

S&P 500 Restaurants Index relative P/E valuation 

U.S. vehicle miles

Estimated raw material cost per vehicle

S&P 500 Index employees

AI-related portfolios vs. S&P 500 Index – returns since December 2023

S&P 500 Index vs. sectors – P/E ratios (next 12 months) 

S&P/TSX Composite Index vs. S&P 500 Index – foreign revenue & valuations

TSX vs. S&P 500: Higher foreign revenue exposure & lower valuations

U.S. vs. Canada – Sector correlation and weights

Tokyo Stock Price Index (TOPIX) – Dividends and buybacks

Major index – % of revenue from a single sector

Base metal prices vs. physical inventories

AI Boom Drives Record Capital to Late-Stage Venture Funds

U.S.-based growth and late-stage venture funds raised $23.6 billion this year so far—a figure that already exceeds the annual totals for any of the past dozen years, according to research firm PitchBook. Such funds invest in startups that are typically raising their Series C or later rounds, according to the data provider’s definition.  

Historically, such funds accounted for just around 10% of assets under management in venture capital globally since 2010, according to Preqin, a division of BlackRock. 

About 36% of limited partner institutional investors surveyed by Preqin in November said they believe late-stage strategies are among the best opportunities within venture capital, up from 28% the previous year. At the same time, interest in early-stage funds fell, according to Preqin.

Late-stage funds have a shorter time horizon to returning capital, a key consideration for many LPs parched for cash, said Angela Lai, vice president at Preqin. Some expect that this year the multiyear logjam on initial public offerings will break, improving the chances that later-stage funds start realizing their investments. Early-stage venture funds, meanwhile, last 16 years, on average, according to Meketa’s historical database.

Andreessen Horowitz is another firm that raised a much larger growth fund in January, collecting $6.75 billion up from $3.75 billion for its prior growth pool. 

Late-stage funds underperformed other venture categories after the frothy conditions in 2021 gave way to a subdued market, with higher interest rates and few IPOs, according to Preqin. Yet late-stage fund returns have been picking up. 

Global investment firm Cambridge Associates advised limited partners to include multistage investing strategies as they invest in venture funds. “Doing that will increase the odds that LPs can capture Power Law winners that slip through the grasp of earlier-stage managers,” the firm wrote in a December note. Power Law refers to the tendency in venture capital of a few investments to generate the vast majority of returns.

Meketa’s Samson cautioned that currently late-stage funds tend to have a lot of overlap in their portfolios. “If you look across all of these funds, they are basically in the same companies, the Andurils, the Anthropics, the OpenAIs,” he said. LPs should pay attention to when fund managers first invested in these hot companies, as that will have a large impact on eventual returns, Samson said. 

Meketa, meanwhile, is continuing to prefer early-stage when it comes to venture allocations, he said.

Preqin’s Lai said early-stage investing will remain the workhorse of venture capital in the long term. “Early stage is where you are going to see the better long-term performance, since you enter into these opportunities at much lower valuations,” she said. For now, however, investors are leaning toward strategies that back businesses that are more proven, she said.

 

This week’s fun finds

A brief history of instant coffee

The convenience of instant coffee masks a surprisingly difficult problem. Coffee’s appeal lies in the hundreds of volatile compounds that create its flavor and aroma, exactly the substances most likely to disappear during processing. Creating instant coffee required developing techniques to extract the soluble molecules in coffee from the insoluble plant matter without destroying the fragile compounds that make coffee worth drinking.

Instant coffee has spent most of its history as the cheapest, quickest, and most portable coffee, but with a reputation for low quality when it comes to the flavors that coffee lovers seek out. That has begun to change: a market for premium instant coffee has opened up over the past two decades. Today, specialty roasters like Verve and Supreme offer freeze-dried versions of their coffees, often selling for around $2.50 per cup, 35 times the price of standard instant.

Making this possible required technical breakthroughs. One issue was aroma loss. While freeze drying helped preserve more volatile compounds during drying, delicate aromatics could still be lost during earlier stages like roasting, grinding, and extraction. Retaining more of these compounds required improved aroma recovery methods that capture volatiles early in the process, store them separately, and add them back after drying. Primitive forms of aroma recovery had existed since the early twentieth century, but advances since the arrival of freeze drying gave manufacturers better tools to preserve the subtle characteristics that distinguish specialty beans.

Technology alone wasn’t enough to create a premium instant market. The economics of production also had to change. Instant coffee production requires multi-million dollar capital investments in extraction batteries, concentration equipment, and drying facilities. Historically, only manufacturers running at massive scale could justify these costs, leaving specialty roasters with no realistic path into the category.

This changed in 2016 when Nate Kaiser founded Swift Cup Coffee in Lancaster, Pennsylvania, pioneering what you might call instant coffee as a service. Today, a vibrant market of contract processors exists to serve specialty roasters. These processors brew roasters’ beans to precise extraction standards, freeze dry in small batches, and package the finished product under the roaster’s own brand. This converts lumpy fixed costs into variable costs, letting roasters test the market without major investment.

While instant may never be the coffee connoisseur’s preferred drink, decades of innovation have earned it a role in millions of people’s lives. From troops in the field to rushed mornings and camping trips, it offers a practical solution when time or equipment are scarce. 

This week's interesting finds

 A few charts worth discussing

“Higher growth names are getting less expensive, with the largest valuation compression concentrated in businesses expected to deliver the strongest sales growth.”

- Tye Bousada

“The tech sector’s weight continues to grow in credit indices, particularly across investment grade, high yield and leveraged loans. Sectors with increasing capex spend often become the largest index weights as they borrow to fund expanding budgets, increasing index exposure to the themes of the day.”

- Steven Lo

Other charts worth pointing out

Asian vs. U.S. equity valuations

U.K. equity ownership by category

Household equity ownership – Europe vs. U.S.

Domestic equity ownership vs. valuations

Hedge funds’ share of U.S. Treasury holdings

AI tool subscriptions by U.S. businesses

S&P 500 Index return decomposition – 2026 YTD

U.S. vehicle market share by segment

U.S. vehicle sales by segment

U.S. vehicle sales vs. gas prices

Global personal luxury goods – market vs. top-spender share

US private credit firm backs loans for World Cup ticket flipping

A boutique private credit firm has its eyes on a lucrative trade ahead of the Fifa World Cup this summer: lending to an online platform that aims to flip tickets of sought-after football matches for large profits.

Eagle Point Credit Management has recently increased its $50mn financing package to Sports Illustrated Tickets — a sister company of the sports magazine — to help fund its plan to purchase World Cup tickets and resell them with huge mark-ups.

The profit potential has convinced Eagle Point to sign off the loan, which amounts to the total cost of the tickets, meaning that if Sports Illustrated buys $1mn worth of World Cup tickets, it would lend a full $1mn.

Investments in ticket resales typically yield returns in the mid-teens for lenders, which include New York-based investment firm Feenix Venture Partners, according to Eagle Point.

If Sports Illustrated Tickets fails to repay the loan, lenders could seize its assets, including millions of tickets to sports, concerts and theatrical performances worldwide.

Fifa, football’s governing body, also makes a profit from the resale of World Cup tickets, getting a 15 per cent cut of the sale from both the buyer and the seller.

For example, a seat behind the goal at the US team’s opening game against Paraguay is currently listed on Fifa’s resale platform at $5,900, plus a fee to the governing body of $885. The ticket has a face value of $2,735.

High ticket prices at the tournament, which is being held across the US, Mexico and Canada, have led to an outcry from fans around the world as well as from politicians in the US.

Meanwhile, US hotels are slashing room rates on game days, as high ticket prices and anti-American sentiment are discouraging football fans from attending the matches.

Sports Illustrated, a 72-year-old magazine most famous for its sports journalism, has in recent years expanded its revenue streams to include TV streaming, ticketing and branded events.

The ticketing business, which is separate to the editorial unit, describes itself as a “fan-first marketplace” and a “trusted source for unforgettable live experiences”. It secures tickets in part from sponsoring events and partnering with stadiums.

In September, it signed a 13-year deal with New York Red Bulls that will rebrand the soccer team’s home court in Harrison, New Jersey as “Sports Illustrated Stadium”. It will also be the official ticketing partner for all future events there, including a series of World Cup watch parties.

Still, the inflated price of World Cup tickets has deterred even well-heeled members of the Wall Street elite from attending the tournament.

This week’s fun finds

Andres, from the Trade Operations Team, hosted a vibrant Colombian-inspired lunch featuring bold flavours, ingredients and traditional favourites. It was a perfect way to end the week and bring warmth and a bit of culture to the office.

Bebe the Parrot Goes Viral for Exploring Bahamas in Custom Built Submarine

A pet parrot named Bebe has gone viral after his owner took him snorkeling in the Bahamas using a homemade submarine. The custom submarine, which owner Steven Lawyer tested at home before using it in the sea, allows Bebe to explore underwater in a way that is unusual for parrots. The bird has also participated in other adventurous activities.

This week's interesting finds

Oh, brother

Originally published in the 2025 Cymbria Annual Report, “Oh brother” is a hypothetical conversation between a brother and sister about managing future regret based on what others are ignoring in the market – both the major risks and the opportunities available in underappreciated areas.

Brand Management

An in-depth dive into one of Cymbria’s largest holdings, Restaurant Brands International. This is the latest commentary from Jason’s corner.

A few charts worth discussing

“The United States has become the #1 natural gas producer in the world, accounting for 25% of worldwide output. Despite this, much of U.S. production has been constrained due to a lack of export infrastructure. They’ve also put pressure on Canadian gas producers to sell natural gas into the American market.

“A shortage of transport capacity has resulted in producers occasionally selling natural gas at negative prices. However, there’s an industry change underway where midstream pipeline operators and liquid natural gas (LNG) operators are actively adding transportation and export capacity for natural gas."

- Stas Lopata

“AI and machine learning are speeding up the early stages of drug discovery, raising fears that pharma and biotech companies could cut spending on the tools needed for clinical trials. The evidence so far shows that spending on wet lab (practical analysis), along with dry lab (theoretical data analysis), spending continues to grow. This is consistent with what management teams have been telling us – that AI is producing more hypotheses and candidates requiring validation, thus increasing the need for more work in the physical lab.”

- Claire Thornhill & Rhea Jandu

“Over the past decade, industry-wide R&D investment has shown steady growth even as new technologies have been introduced.”

- Claire Thornhill & Rhea Jandu

“I thought I was going to save money and not have to watch ads...What's old is new again!”

- Frank Mullen

Other charts worth pointing out

AI-related industry performance

60/40 portfolio returns by asset class

U.S. tech debt as % of credit category

Investment grade tech debt vs. index – credit spreads

Gold vs. US$ – reserve assets

Developed markets ex-U.S. vs. U.S. – relative performance

Taiwanese exports by sector

Global transaction values

U.S. consumer spending

China throws the switch on battery buildout ‘equal to 10 times US capacity in 2025’

China’s leading battery makers have unveiled plans to add more than 600 gigawatt-hours (GWh) of new production capacity for the energy storage system (ESS) market in just the first two months of 2026, underscoring surging global demand for renewable energy infrastructure. 

According to the GGII Energy Storage Research Institute, a Shenzhen-based consultancy, 19 mainland Chinese battery producers it tracks were set to invest a combined 180 billion yuan (US$26.3 billion) to build new lithium-ion battery factories.

Once completed – with some facilities due to come online in late 2026 – the projects will add up to 900GWh of annual production capacity. About 70 per cent of this would be dedicated to the ESS market, with the remaining 30 per cent serving the electric vehicle (EV) sector, GGII said in a report released on Wednesday.

ESS comprises batteries alongside battery management, power conversion and control systems that store excess energy generated from renewable sources, while providing backup power during outages and helping stabilise electricity grids.

One GWh of battery capacity can supply around 750,000 households for a year.

China has emerged as the dominant force in the global ESS industry, with mainland companies accounting for more than 80 per cent of the market. According to Seoul-based SNE Research, global ESS battery demand rose 79 per cent year on year to 550GWh in 2025.

As China’s ESS sector expands rapidly with government backing, the US is racing to catch up, as Washington moves to restructure supply chains to exclude Chinese-made batteries and components.

In 2025, newly installed battery storage capacity on the mainland rose 40 per cent year on year to a record 174.2GWh, according to Benchmark Mineral Intelligence.

But as expansion accelerates, policymakers are starting to take notice.

Four Chinese government departments – including the Ministry of Industry and Information Technology – convened a symposium on April 9 to discuss early intervention measures aimed at curbing irrational competition in the power and energy storage battery sectors.

Officials said they would strengthen capacity monitoring, guide more orderly price competition and tighten regulatory oversight.

The bullish outlook comes as China ramps up battery exports. In the first 11 months of 2025, the country exported 4.25 billion lithium batteries worth more than US$69 billion, up 19.3 per cent and 25.6 per cent respectively from a year earlier, according to customs data.

This week’s fun finds

How NASA Achieved the Historic Artemis II Splashdown

Every crewed mission to the moon starts with fire and ends with water. Artemis II was no different. The spacecraft and crew began their journey on April 1, under the power of six rocket engines pouring flames that generated 8.8 million lb. of thrust. The mission ended Friday night, April 10, at 8:07 p.m. EDT, off the coast of San Diego. The Orion capsule hissed into the ocean, gently settling down atop the waves at just 17 miles per hour, under the control of three 116-ft. diameter parachutes. Less than two hours later the four astronauts—commander Reid Wiseman, pilot Victor Glover, and mission specialists Christina Koch and Jeremy Hansen—will be safely on the deck of the USS John P. Murtha, successfully concluding the first crewed mission to the moon in 54 years.