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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Apollo Asia Fund navigates the end of globalization as Trump's tariffs trigger Asian regional cooperation. China, Japan, and South Korea unite while ASEAN strengthens ties, creating opportunities as Asia pivots from US dependence."
Apollo Asia Fund declined 0.7% in Q1 2025 but remains up 11.1% year-on-year, with 16.2% compound annual growth since inception. The fund faces a transformed investment landscape following Trump's extraordinary tariffs that triggered immediate retaliation from China and Canada. This rapid dismantling of international free trade has made the US an unreliable negotiating partner, catalyzing remarkable trilateral cooperation between China, Japan, and South Korea, while ASEAN countries strengthen security ties. The manager views this as the end of globalization, creating supply chain chaos and rising costs for American products with imported components. However, Asia's pivot away from US dependence presents opportunities, as the region possesses resources and capabilities for continued prosperity under regional peace. The portfolio maintains focus on resilient businesses with sound balance sheets to preserve purchasing power amid unpredictable inflation and market uncertainty. With 28% in cash and receivables, the fund is positioned defensively while remaining committed to Asian markets over US or European alternatives.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The manager expresses strong conviction about the end of globalization, Asia's pivot, and portfolio positioning preferences. Clear statements about focusing on Asia rather than US/Europe and maintaining resilient businesses show high confidence in the investment thesis.
Growth Outlook
The manager describes a transformed and chaotic environment with the end of globalization, supply chain turmoil, and market dislocations. However, there's optimism about Asia's ability to pivot and prosper through regional cooperation, creating a mixed but slightly negative overall market outlook.
Risk Appetite
The fund maintains 28% in cash and receivables, indicating defensive positioning. The manager emphasizes resilient businesses with sound balance sheets and explicitly states preference for Asia over US/Europe, showing risk-off posture amid uncertainty.
Capital Deployment
With 28% in cash and receivables, the fund appears to be holding significant liquidity rather than aggressively deploying capital. This defensive cash position suggests moderate de-risking rather than active deployment.
Forward Guidance
While acknowledging no certainty about returns, the manager expresses confidence in Asia's pivot and regional cooperation. The guidance suggests maintaining current positioning rather than aggressive deployment, with slight optimism about Asian prospects.
Language Signal
Language includes negative terms like 'chaotic,' 'turmoil,' 'disastrous,' and 'crisis,' but balanced by positive references to 'prosperity,' 'opportunities,' and Asia's 'resources and abilities.' The net balance is slightly negative but not overwhelmingly bearish.
Perceived Risk
The manager identifies multiple significant risks including supply chain chaos, market dislocations, unpredictable inflation, and geopolitical uncertainty. References to 'no certainty about returns' and potential crises indicate high perceived risk in the environment.
Opportunity Density
While acknowledging broad market challenges, the manager sees selective opportunities in Asian regional cooperation and resilient businesses. The opportunity set is viewed as more favorable in Asia than US/Europe, suggesting moderate opportunity density.
Time Horizon
The focus on preserving 'long-term purchasing power' and investing in resilient businesses with sound balance sheets suggests a patient, multi-year investment approach rather than short-term catalyst-driven strategies.
