Ten Cap’s Alpha Plus Fund posted a sharp 5.7 per cent decline in March, underperforming the broader market as the ASX 200 Accumulation Index shed 3.4 per cent after a “modest” risk on position proved mistimed.
Lead portfolio manager, Jun Bei Liu, noted that market volatility remained elevated in March, with indices continuing their decline from late February – leaving several key holdings in the Alpha Plus Fund particularly exposed to the broader sell-off.
“Several of the portfolio’s higher-quality, global growth exposures – historically among our strongest contributors – were disproportionately affected by the sell-off,” Bei Lui said in an update on the fund’s performance on Friday.
“Nevertheless, performance was supported by positive attribution from several core positions across both long and short exposures.”
Key contributors, according to her, included James Hardie Industries, as well as its gold exposure – via Northern Star Resources and Genesis Minerals – which provided absolute returns during the month.
Notable detractors included global games company Light & Wonder, which was impacted by concerns regarding weakening consumer activity on gaming volumes, and Pro Medicus, which continued to retrace in March.
Bei Liu explained that Ten Cap had come into 2025 optimistic on the equity market outlook.
“February saw the first cracks emerge in this view. However, they did not appear large enough to disrupt the economic backdrop,” she outlined.
“This view was turned on its head through March (and as we write, into April), with President Trump’s resolve at rewriting the global trade order – at whatever cost. We have quickly learnt that it’s his ‘way or the highway’ and collateral damage is acceptable, no matter how significant.
“It did help that equity markets started the year expensive or overowned, but in and of itself, these are not reasons for the sell-off.”
Looking forward, she said the market is observing a “cage fight to the death”.
“Either Trump gets his way, or Trump gets his way,” she said.
“There is no alternative other than how outcomes could be softened either via negotiation or Fed policy easing. We have little transparency on either.”
Expounding on the Alpha Plus Fund’s portfolio positioning, the portfolio manager said that Ten Cap has made adjustments to segments given the significant uncertainties caught up in tariff announcements coming out of the US, such as cyclicals.
On the plus side, the firm remains positive on China’s consumer-facing companies, even as the “cage fight” between the two largest economies prevails.
“We remain confident that they have the tools to offset weakness and that these will be deployed in a way that supports the consumer of resources.”
Despite the loss last month, the fund has still enjoyed an annualised net performance since inception of 10.9 per cent, against a benchmark return of 8.1 per cent.
This comes as Bei Liu, in October, announced plans to establish her own firm while migrating the Tribeca Alpha Plus Fund, which continues to be managed under her guidance as the flagship product of joint venture Ten Cap.
Bei Liu serves as co-founder and lead portfolio manager, while business partner Jason Todd has stepped into the role of co-founder and chief executive of the young hedge fund business.
