NAV: 360,875.17
Total Shares Outstanding: 363418
NAV per share: 0.993
Performance since inception: -1.42%

Last month’s market movement was dominated by the US–Iran conflict and marked the 1st time we experienced back-to-back portfolio stop losses, where our account was almost or completely stopped out TWICE!. Our portfolio suffered ~8% loss in just a few weeks. I believe poor timing and bad luck were partially to blame, had the rebalance occurred 1 week earlier or later, we would’ve been stopped out only once and losses would have been closer to 4%.

In March, most of our positions were stopped out in the 2nd week after rebalancing, when Israel bombed Iran’s oil facilities, signalling further escalation. The remaining positions were eventually stopped out, except for oil, which was also stopped out yesterday after Trump announced that the US might end the war within 2–3 weeks. Markets rebounded sharply, with the S&P500 posting a 2.9% one-day gain.

I don’t think the war will end soon, given rumours that the US has deployed ground troops to the Middle East, suggesting further escalation. Furthermore, Trump stated in his address to the nation that they would bomb Iran “back to the stone ages,” which does not suggest de-escalation.

Our technical indicators are mostly neutral or negative. In this rebalancing, we will deploy only around 22% of our capital, keeping the remainder in cash as we stay on the sidelines during this period of uncertainty. We have also expanded our investable universe to include Israel and South Africa ETFs for additional diversification, and split IEUR into EWU and EZU to separate UK from the Eurozone, and give it its own signals.

I’ve contemplated whether to allow our funds to short the market, given the prevalence of negative signals. However, I’ve have decided against this, as past experience has shown it to be a double-edged sword. Short positions introduce borrowing costs, and sharp market downturns are not always captured by our signals. While this may result in missed opportunities if markets continue to decline, our mandate remains long-only, and it is important that we remain disciplined. Once again, I thank you for your confidence during this period.

March’s monthly report is also ready for download here.