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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Alluvium outperformed during Trump's market sell-off with strong healthcare and AI-driven gains offset by tariff-sensitive cyclical weakness. The fund holds 18.9% cash, waiting for policy clarity before deployment."
Alluvium Global Fund returned -2.4% in EUR terms for Q1 2025, outperforming during a quarter marked by Trump's Liberation Day market sell-off. The fund's concentrated portfolio of 20 positions benefited from strong performance in Alibaba (up 55.3% on AI/cloud expansion), McKesson (up 18.2% on guidance upgrades), and HCA Healthcare (up 15.4% on positive outlook). However, cyclical holdings like Robert Half and Thor Industries suffered as business confidence deteriorated due to tariff uncertainty. The managers maintain 18.9% cash, deliberately holding back deployment until Trump's constantly changing trade policies become more defined. They view the current environment as particularly challenging for both investors and management teams, with Canadian exposure through Linamar most at risk. While not expecting an imminent crash, they believe equity markets are not attractively priced and prefer to wait for better clarity on policy impacts before aggressive capital deployment.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The score of 0.65 reflects moderate conviction. While the fund is relatively concentrated with only 20 positions and detailed fundamental reviews, the high cash balance of 18.9% and cautious macro-hedged language pull the conviction score down from high-conviction levels.
Growth Outlook
The manager maintains a cautious outlook (0.25) because of the "Trump Slump" and newly introduced tariffs, which they believe will negatively affect global growth and equity prices. They state that the market is not a "screaming buy" and advise keeping cash on hand.
Risk Appetite
With 18.9% cash at the end of the quarter, up from 14.8% at the beginning, the manager exhibits a highly defensive posture (0.25) aimed at capital preservation as they digest tariff developments.
Capital Deployment
The capital deployment score of 0.25 aligns with moderate de-risking as cash levels rose from 14.8% at the start of the quarter to 18.9% at the close. The manager made only one net position increase (Dick's Sporting Goods) while letting cash build.
Forward Guidance
The manager's forward guidance score of 0.25 indicates a strong inclination to hold back on deploying new capital. They intend to keep "powder dry" until the concrete implications of the proposed tariff changes are clearly defined.
Language Signal
The language signal score of 0.25 reflects the dominance of risk-oriented and cautious terminology throughout the letter. Words like "calamity", "slump", "uncertainty", and "somber" far outweigh positive descriptors.
Perceived Risk
The manager perceives high risk (0.85) in the current market environment due to the unpredictable nature of global tariff implementations. They worry about cascading retaliatory tariffs and subsequent drops in business confidence.
Opportunity Density
The opportunity density is rated 0.35, signaling a sparse opportunity set. The manager explicitly states that the equities market is not a screaming buy and suggests holding back on new investments.
Time Horizon
A time horizon score of 0.80 represents the fund's multi-year holding period and long-term orientation. The manager emphasizes "through-the-cycle" earnings and mentions holding certain positions, like McKesson, for over six years.
