As I digest the news that keeps coming in thick and fast since Trump's inauguration, I sit here wondering whether I’m watching a Netflix series or if this drama is, in fact, real life! There was a time when “deal-making” occurred behind closed doors. Today, however, it’s all playing out in the public eye. This is impacting markets, sentiment, and even how we approach investing. Whereas statements from the White House were once taken as fact, we now have to assume that much of this is theatre. As a result, we can’t adjust our portfolios until we have certainty regarding specific policy directions.
The market hit an all-time high on February 19th, followed by a dramatic sell-off in tech stocks and momentum names. A weak consumer confidence survey put the strong growth narrative, which had been driving markets in 2025, at risk. Some high-flying stocks, such as Palantir, MicroStrategy, Rocket Lab, and NVIDIA, were pummelled as retail investors rushed for the exits.
Bonds, on the other hand, had a great month, as investors focused on growth concerns over inflation worries, driving yields lower (and bond prices higher). There was also a rotation into value stocks like utilities and infrastructure, which benefited our Property & Infrastructure Fund this month.
The reporting season brought mixed results across our funds. The highlight was the strong performance of our small and emerging companies' funds in Australia, which bucked the trend and had a solid month, in contrast to the volatility experienced in some of our mid-to-large market cap portfolios.
Markets are recalibrating after a growth scare stemming from the uncertainty caused by the Trump administration. This dynamic is likely to persist for the coming months.
My advice is to ignore the headlines and the political mudslinging. Instead, focus on company earnings and interest rates. For now, interest rates are falling, which is good news. In terms of earnings, tech and AI spending still look solid. However, for the consumer, we’ll have to wait and see how uncertainty surrounding tariffs and geopolitics impacts spending.
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