This interview was filmed Monday 25th May 2026.
Rising geopolitical tensions, a more pronounced deglobalisation trend, and the recent US-Iran conflict are making what many believe are deep, structural changes in the global economy. Alliances are shifting – think the US-Canada relationship over the past six months – and global oil markets look suddenly structurally different now that the UAE has withdrawn from OPEC amidst the ongoing fuel crisis. Supply chains also remain fragile.
For Kevin Bertoli of PM Capital, it’s confirmation of a thesis he’s held for years. What is surprising, though, is that despite all this uncertainty – whether it be around global growth, oil above $100 a barrel, or potential commodity shortages – is that the AI trade has barely flinched. In fact, Bertoli described it as almost “defensive” in nature, while other sectors have fallen sharply. It felt almost counterintuitive to hear, but it shows just how unusual this market environment really is.
In this conversation, Bertoli unpacks the structural shifts from deglobalisation, the widening AI-driven market divergence, and where he and his team are finding high-conviction value amid the noise.
The market is at all-time highs, but don’t be fooled
The US market may be back to record levels, but Bertoli points out that the headline figure masks an increasingly bifurcated picture underneath. “Less than one third of the market was within 5% of its highs. What you’ve had is a real breakdown or separation between AI haves and AI have nots. And the AI haves are definitely leading the charge.”
A handful of stocks are doing the heavy lifting while some sectors are down 40 to 60%. The volatility hasn’t bridged the gap between expensive US tech and everything else. If anything, Bertoli says, it’s widened it.
Why European banks still make sense
One of PM Capital’s more contrarian positions is its high conviction in European banks, a trade that has been running for several years and still has legs, according to Bertoli. Banks that spent years repairing damaged balance sheets after the European debt crisis are now in a position to grow. They’re well capitalised, returning capital to shareholders, and seeing genuine loan growth, he states. CaixaBank in Spain, our Irish banking businesses, even Intesa Sanpaolo in Italy – they’re all growing their loan books at mid-single digit rates.
Valuations remain attractive despite strong recent performance. Most of the European banks PM Capital owns are trading at 10 to 12 times earnings while generating mid-teen returns on equity, and in some cases better than the Australian banks.
Reshoring and the US$3,500 iPhone problem
When US Commerce Secretary Howard Lutnick floated the idea of assembling iPhones in America, analysts ran the numbers and landed on a US$3,500 price tag. Bertoli sees this as structurally bullish for industrials, not just because of reshoring, but because of what comes with it. “The US and a lot of countries can’t reshore without significant productivity gains and significant automation – because they just don’t have the manpower.” That means robotics, automation, and AI moving from software into hardware.
PM Capital has trimmed some industrial positions after a strong run-up in valuations, but Bertoli is watching the sector closely, should a market drawdown bring about buying opportunities.
Beverages – a structural reset, not just a rough patch
Bertoli’s view is that the market has overcorrected. “We don’t dismiss moderation,” he says. “Moderation is a factor, but the reality is moderation’s been around for the last 30 or 40 years.” The cyclical overlay matters too. Post-COVID demand surged, inventories were lean, and companies priced aggressively into input cost inflation. That hangover is now working through the system. Bertoli believes the market is pricing in permanent stagnation, and he thinks that’s too pessimistic.
The better comparison he draws on might be in carbonated drinks. US soft drink consumption has fallen more than 20% over the past two decades, yet Coca-Cola has continued to grow revenue by shifting to smaller pack formats and raising prices. “It’s a drink less, but drink better phenomenon and you get a lot through pricing.”
Spirits stocks in particular have de-rated sharply, falling 60 to 70% from their 2023 peaks and now trading at 12 to 13 times earnings. PM Capital holds Heineken, Diageo and Pernod Ricard, three companies that have been under significant pressure.
Where new capital is going
Recent portfolio additions include Disney, KKR, Charles Schwab, and Airbus, positions largely built during the volatility spike in March. Healthcare is the next area of focus for PM Capital. Globally, healthcare has been one of the worst-performing sectors over the past six years, reversing nearly a decade of consistent outperformance. “Between 2010 and 2018, in all but one year, the healthcare sub-index outperformed the S&P 500. In five of the last six years, it’s underperformed,” says Bertoli. The de-rating has been significant and, in his view, has created a setup to watch closely.
Two risks PM Capital is watching closely
The first is embedded inflation. Reshoring, fragmented supply chains, and the enormous resource demands of AI buildout are all inflationary. If that coincides with a slowing broader economy, the combination becomes difficult to navigate. The second is the AI trade itself. Bertoli isn’t dismissing AI, but he’s cautious about momentum-driven positioning that ignores valuation. It’s the same pattern he’s seen before in healthcare – a strong structural theme, genuine investor enthusiasm, and multiples that eventually got ahead of the fundamentals.
“There’s not really a conversation around return on invested capital. And when the music stops, you will have a problem.”
