Otso Monthly - March 2025

Performance in March was disappointing, but less bad than the benchmark (i.e., S&P500). The fund fell 3.95% in AUD terms (and 2.9% in USD terms). The benchmark declined 6.6% in AUD terms (and 5.6% in USD terms). This performance was underwhelming.

The broader market decline was attributable to concerns over tariffs. We can see a consistent decline throughout the month (see the below figure). This in large part is due to anticipation of “Liberation Day” on 2 April.

The fund’s strategy in the lead up to 2 April is to remain partly invested. This is largely because the magnitude and scope of the tariffs is unknown ex ante. This creates significant downside risk exposure, suggesting that it is important to mitigate risk exposure.