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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 delivered 16.64% net in Q2 2025 by tactically navigating tariff volatility and emphasizing international diversification. The manager sees a fragile U.S. economy with 120% debt-to-GDP and elevated valuations, positioning the portfolio in mispriced small-caps across Asia and Latin America."
Kathmandu Capital delivered a strong Q2 2025 return of 16.64% net, outperforming both the S&P 500 and MSCI ACWI benchmarks despite navigating a ~30% portfolio swing driven by tariff-related volatility. The manager shifted 35% to cash mid-quarter before fully redeploying by period end, demonstrating tactical agility in turbulent markets. The portfolio emphasizes international diversification as a strategic advantage in an environment where American exceptionalism is being questioned and the U.S. faces a fragile economy with 120% debt-to-GDP ratio, declining dollar, and elevated market valuations. Key positions include ACM Research, a new holding positioned to benefit from China's semiconductor supply chain localization, and OMAB, a Mexican airport operator poised to capture nearshoring tailwinds. The manager maintains a cautious outlook, viewing the probability of economic downturn as higher than continued expansion, while patiently waiting for mispricing opportunities in volatile markets. The fund's nimble size and international focus are positioned to benefit from capital flows seeking opportunities outside the U.S. and early signs of convergence between U.S. and international equity markets.
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