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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Kathmandu Capital. This analysis is provided for institutional research purposes only and is not investment advice.
"Kathmandu Capital outperformed in Q1 2025 with international diversification paying off as Asia and Europe holdings outperformed U.S. markets. The fund reduced beta and increased geographic diversification amid tariff-driven volatility."
Kathmandu Capital generated a -1.72% return in Q1 2025, outperforming the S&P 500's -4.62% decline. The fund believes market dynamics are shifting in their favor as confidence in American exceptionalism declines and capital increasingly seeks opportunities abroad. Their holdings in Asia and Europe have demonstrated stronger performance, reflecting this trend. The portfolio has been restructured with reduced beta and increased geographic diversification to navigate a more challenging global economic environment dominated by tariff concerns and policy-driven volatility. The fund maintains a disciplined approach focused on staying in the game rather than timing markets, using flexible position sizing and maintaining approximately 1% cash. Key holdings include technology and consumer companies across Asia and Europe, with several positions trimmed or exited based on fundamental developments. A weaker dollar should support emerging market growth by reducing debt burdens and boosting capital flows. The manager emphasizes patience and flexibility while positioning for long-term absolute returns in an uncertain environment.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The manager demonstrates high conviction in their international diversification thesis and risk management framework, with detailed explanations of positioning changes and clear mental models for navigating uncertainty.
Growth Outlook
The manager expresses cautious optimism about market dynamics shifting in their favor, particularly for international markets, but acknowledges a more challenging global economic environment dominated by tariff concerns and policy-driven volatility.
Risk Appetite
The fund has taken defensive actions by reducing overall beta, increasing geographic diversification, and maintaining low cash levels (1%), indicating a more cautious risk posture in response to the challenging environment.
Capital Deployment
The fund shows modest de-risking with reduced beta, increased diversification, and position trimming (NagaCorp, SEG exit), while maintaining very low cash levels at 1%, indicating selective capital preservation.
Forward Guidance
The manager maintains a neutral to slightly positive bias, focusing on delivering long-term absolute returns while emphasizing patience and flexibility rather than aggressive deployment or defensive positioning.
Language Signal
Language shows mild optimism with terms like 'shifting in our favor,' 'opportunities abroad,' and 'stronger performance' balanced against concerns about 'challenging environment' and 'uncertainty.'
Perceived Risk
The manager acknowledges significant risks including tariff concerns, policy-driven volatility, uncertain timing of valuation convergence, and global macro uncertainty, leading to defensive portfolio restructuring.
Opportunity Density
The manager sees selective opportunities in international markets, particularly Asia and Europe, while acknowledging the need to be patient and disciplined in a challenging environment with limited compelling opportunities.
Time Horizon
The focus on long-term absolute returns, structural tailwinds like U.S. fiber penetration, and emphasis on patience over timing suggests a multi-year investment horizon with compounding focus.
