Morphic Ethical Equities Fund Outperforms in Volatile AI-Driven Market

Morphic Ethical Equities Fund Ltd. ( (AU:MEC) ) has shared an announcement.

Morphic Ethical Equities Fund Limited reported a 1.2% net return for February 2026, significantly outperforming the MSCI All Countries World Index’s 0.4% decline over the same period. Over one year the fund gained 16.3%, ahead of the index’s 8.4%, although it lags the benchmark over three and five years since listing.

Management highlighted a marked broadening of equity market gains into mid-caps and asset-heavy sectors, as concerns over large-tech AI spending drove rotation and extreme dispersion between winners and losers. The fund sees this volatile regime as conducive to active stock-picking and has adjusted its portfolio to blend hard-to-displace fixed-asset businesses, structural growers and perceived AI beneficiaries.

Key stock contributors included SharonAI Holdings, which jumped 50% after its Nasdaq listing as an Nvidia cloud partner, and Mastec, which rose 24% on strong results and backlog growth in infrastructure and renewable projects. Detracting from performance, Galaxy Digital fell 27% as investors reacted to the absence of a new tenant for newly approved data centre capacity, despite persistent power shortages in Texas.

The fund also initiated a new position in Circle Internet Group, issuer of the USDC stablecoin, citing its growing share of a rapidly expanding stablecoin market and diversified revenue from payments and blockchain infrastructure. The manager views Circle’s profitability, cash-rich balance sheet and recent acceleration in USDC adoption as evidence that its business model can withstand lower yields, framing current valuation levels as an attractive entry point.

The most recent analyst rating on (AU:MEC) stock is a Buy with a A$1.50 price target. To see the full list of analyst forecasts on Morphic Ethical Equities Fund Ltd. stock, see the AU:MEC Stock Forecast page.

More about Morphic Ethical Equities Fund Ltd.

Morphic Ethical Equities Fund Limited operates an actively managed global equities investment fund with a strong ethical and responsible investing mandate. The fund avoids direct exposure to sectors such as fossil fuels, intensive animal farming, tobacco, alcohol, armaments, gambling and destructive logging, targeting companies that do not harm the environment, people or society. It is benchmarked against the MSCI All Countries World Index and focuses on long-term capital growth through a diversified portfolio aligned with strict ESG exclusions.

Average Trading Volume: 16,869

Technical Sentiment Signal: Buy

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