Monthly, we update our wholesale investors on what’s happening in the market. Running what’s probably the only late-night trading desk from New Zealand, we’re well-positioned to feel the pulse of the market’s direction.
On Monday, 7th April, we saw the worst drawdown since Covid.
Tariffs threatened to upend the global economy. Traders scrambled for liquidity and threw the baby out with the bathwater.
John and I were watching the trading screen turn blood-red as the figures tumbled.
We held on, confident in the value we had on the table. For clients with available funds, we deployed. I wished we’d deployed even more aggressively.
It was hard with the firestorm from the fake finance media.
Headlines screamed…
- ‘The worst crash since Covid.’
- ‘Treasury doom loop.’
- ‘US economy is done.’
- And other such fear-vampire lines.
After a stressful trading session, unwinding on the couch at home over an episode of Country Calendar gave me some welcome green.
Listening to the US Treasury Secretary had also given me a more grounded synopsis.
He later called out the MSM…
Source: Scott Bessent / X
This month — including ‘Black Monday 2025’ — we post returns of almost 2%*
Clearly, the tariff woes were overdone. Markets oversold. Cash is now flooding back.
Turns out tariffs have some upside. On the White House list of investment intentions since Trump 2.0, a scan of just half the page reveals around $2 trillion (about the GDP of Canada) earmarked for the US. Countries are vying for trade agreements. Existential dependence on Chinese manufacturing is being resolved.
Well, the market notices rising liquidity and investment.
Source: Daniel Lacalle / X
Avoiding the ‘3 Decision’ trap
On another note, clients ask us from time to time why we don’t actively trade in and out of speculative positions.
We’re value investors. Price is what you pay. Value is what you get. True value takes time to realise — often a few years.
The New Zealand FIF tax system for international investors means we also need to optimise returns. We’re focused on achieving growth with dividend income along the way.
We also want to avoid the risks of ‘3 Decision’ investments:
1) You have to decide when to buy…
2) …when to sell…
3) …and what to reinvest in.
Every new decision poses a risk. Very few traders will get all 3 right.
Instead, we’re focused on just one decision. Buying value very well on a risk-managed basis. Then holding until the business reaches its full potential, while reinvesting the dividends.
That may be forever. It may be within a year. That’s where our monitoring programme comes in.
Managed Account performance*
For the month of April 2025, we were up 1.90% across the composite portfolio (total aggregate TWR return across all portfolios following the strategy).
Since the start of this year, we are now up 7.26%.
Our average annualised return since inception is 12.70% p.a.
Please see our performance chart for more details.
Benchmarking
Our MSCI EAFE benchmark was up 3.67%.
This month, to further improve benchmarking accuracy, we are using the S&P 500 in proportion with our growing holdings in the US.
The S&P 500 benchmark was down 1.83%.
Our blended MSCI EAFE/S&P 500 benchmark was up 2.90%.
Liquidity and rate cuts
Right now, we see favourable conditions for investing:
- Plenty of volatility to catch dips and lower prices.
- Tailwinds of growing global liquidity (a lot more money washing through markets).
- Further tailwinds as central banks continue to cut interest rates around the world. (We’re still waiting for the US Fed — maybe May 7?)
For patient and savvy investors, it’s a great time to add funds and lock in long-run returns.
Regards,
Simon Angelo
Editor, Wealth Morning
*Past performance is not an indicator for future performance. Your actual portfolio will differ from the composite portfolio mentioned. The information contained in this document does not constitute an offer to sell or a solicitation to buy an investment, nor should it be construed as investment advice. Wealth Morning Managed Accounts are available to Eligible Investors and Wholesale Investors (not to Retail Investors) as defined in the Financial Markets Conduct Act (2013).
