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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Bailard International Equity Strategy 2025 Q1 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q1 2025 Letter Analysis

Bailard International Equity Strategy Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Bailard International Equity Strategy. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+8.81%

YTD+8.8%

Annualized+6.6%

Positioning StanceConstructive

GeographyEurope, Asia, Global

Digest Analysis

Quick Take

"86% for EAFE. Trump administration policy uncertainty created opportunities as investors repositioned toward undervalued non-US equities."

Executive Summary

Bailard's International Equity Strategy delivered strong Q1 2025 performance with an 8.81% net return, significantly outperforming the MSCI EAFE benchmark's 6.86% return. The quarter marked a sharp reversal from late 2024's US dominance, as policy uncertainty under the Trump administration weighed on US assets while European markets found renewed vigor through structural reforms. The strategy benefited from emphasizing the Eurozone over Asia, with European countries posting exceptional returns led by Spain, Italy, and Germany. Value significantly outperformed growth by over 9%, reflecting investor repositioning toward underappreciated opportunities. The portfolio's momentum-based country selection proved effective, maintaining overweights in strong performers while reducing exposure to lagging regions like Japan. Key risks include ongoing trade policy uncertainty and potential negative earnings revisions across industries. However, the manager views current volatility as creating opportunities, particularly given non-US equities' 40% valuation discount. European structural reforms following geopolitical tensions provide additional catalysts, with German fiscal policy changes enabling significant defense and infrastructure investments.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

75%

CautiousHigh

High Conviction (75%)

High conviction evident in specific positioning changes, clear articulation of investment thesis around European reforms and value opportunities, and confident statements about non-US equity discounts. The manager demonstrates strong belief in their momentum-based country selection model and disciplined approach to volatility.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about market opportunities, particularly emphasizing that current volatility may create the largest opportunities when viewed retrospectively. While acknowledging significant policy uncertainty, the outlook focuses on structural improvements in Europe and attractive valuations in non-US markets.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio positioning shows selective risk-taking with increased exposure to Germany and Norway while reducing Japan exposure. The approach is described as disciplined and nimble rather than aggressively bullish, maintaining sector underweights in Health Care while selectively overweighting Communication Services and Consumer Discretionary.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

Moderate deployment activity with specific country allocation changes including increasing Germany overweight and bringing Norway overweight, while reducing Japan and Sweden exposure. Cash levels remain low at 1.1%, indicating selective rather than aggressive deployment.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Forward guidance emphasizes finding opportunities amid uncertainty, with explicit focus on non-US equities' attractive valuations and European structural reforms as positive catalysts. The manager expresses confidence in their disciplined approach to navigate volatility while identifying emergent trends.

Language Signal

20%

BearishBullish

Bearish (20%)

Language contains balanced mix of opportunity-focused terms like 'renewed vigor,' 'constructive starting point,' and 'underappreciated opportunities' alongside risk acknowledgments. The net balance leans slightly positive with emphasis on valuations, structural reforms, and long-term performance potential.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

Moderate to high risk perception with explicit discussion of policy uncertainty impacts, potential negative earnings revisions, and disrupted supply chains. However, risks are viewed as creating opportunities rather than requiring defensive positioning, suggesting manageable rather than systemic concerns.

Opportunity Density

70%

ScarceAbundant

Abundant (70%)

Strong opportunity perception particularly in European markets and value-oriented investments. The manager identifies multiple opportunity sources including structural reforms, attractive valuations, and investor repositioning, suggesting a relatively rich opportunity set despite policy uncertainty.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Clear long-term orientation with emphasis on longer-term performance potential and structural reforms. The manager explicitly states that current volatility creates opportunities when viewed retrospectively, indicating patience and multi-year investment horizon rather than short-term catalyst dependency.