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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, Van Der Mandele Arar Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"The ARAR Fund utilizes a strict value-oriented framework to capture mispriced global equities while actively managing structural macro risks. By concentrating capital in highly undervalued small-caps and liquidating its position in Alphabet due to AI competition and tariff threats, the fund positions itself to weather systemic US policy risks and potential multiple compression in major market indexes."
The ARAR Fund seeks to outperform benchmarks by investing in deeply undervalued global equities with highly attractive valuation multiples while steering clear of structural risks and overpriced mega-caps. In recent months, the fund outperformed major indexes primarily driven by its position in Jiayin Group, which surged 80% on stellar operating results. However, post-earnings selloffs in Basic-Fit and Jackson Financial limited further outperformance, though the manager believes these declines were unjustified by fundamentals. Looking ahead, the manager warns of four major 'grey swans' threatening the US economy under the Trump administration, including destructive tariff policies, unilateral concentration of executive power, and potential trust collapse in US debt. These systemic risks challenge the premium multiples of US equities. In response, the fund completed a total liquidation of its sole mega-cap holding, Alphabet, citing rising competition to Google Search from rival AI models. Capital is being reallocated to smaller, cheaper global equities, primarily in financials and basic materials.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The fund exhibits moderate conviction of 0.65. While it maintains a relatively diversified portfolio of 24 stocks, it shows highly concentrated sizing in top positions, with Jackson Financial at 15.1% and Jiayin Group at 9.7%, combined with a willingness to completely liquidate holdings like Alphabet when thesis-level risks emerge.
Growth Outlook
The manager has assigned a cautious 0.20 outlook due to substantial macro worries, specifically outlining four 'grey swans' of historical proportions that threaten the US economy. He notes that the S&P 500's underperformance has further to go as the historical valuation premium of US stocks over European and Asian peers compresses.
Risk Appetite
While the fund holds a low cash position of 1.6%, its risk appetite is scored at 0.45 because it has exited its only mega-cap holding (Alphabet) due to systemic and macro concerns. The manager is actively shifting the portfolio toward defensive value opportunities with very low forward multiples to protect against rising downside risks.
Capital Deployment
The capital deployment index is scored at 0.55, representing a near-neutral status. Cash levels decreased slightly from 2.7% in January 2025 to 1.6% in March 2025 as the manager exited one position (Alphabet) and entered three new positions, two of which are still in progress.
Forward Guidance
The score of 0.50 reflects a balanced forward action plan. While the manager recently sold Alphabet and entered three new positions, he advises addressing broad macro risks through wealth management framework hedging rather than making drastic, immediate shifts within the equity mandate itself.
Language Signal
The language signal is heavily bearish, scoring 0.30. The text is dominated by risk-oriented vocabulary, describing potential catastrophic losses, autocracy, economic folly, and comparing US tariff policies to historical disasters like Mao's Great Sparrow Campaign and the Red Khmer regime.
Perceived Risk
Perceived risk is scored at a very high 0.90. The manager explicitly warns of systemic, structural threats to the US economic order, discussing potential trust collapses in US debt, aggressive currency devaluations, and autocratic political shifts that present profound risks of extreme market losses.
Opportunity Density
The manager sees a selective opportunity set, scoring 0.60. While he finds compelling value in certain pockets like financials, basic materials, and cheap micro/small caps, he notes that finding these undervalued opportunities requires making difficult trade-offs, such as selling Alphabet to fund new entries.
Time Horizon
The fund operates on a multi-year time horizon of 0.70. The manager emphasizes holding undervalued compounders and ignoring short-term market noise, though he acknowledges that the timeline for autocratic macro risks to destabilize markets is highly variable and could play out over several years.
