Aussie equity manager admits to being ‘Trumped’

Reflecting the attitude of many fund managers as they closed out last week, TenCap lead portfolio manager, Jun Bei Liu has admitted to having been “Trumped”.

In her monthly update on the TenCap’s Alpha Plus fund which fell 5.7% in March, Liu reflected that the fund had come into 2025 optimistic on the equity market market, believed economic growth was set to pick up, inflation was falling and interest rate cuts were coming,

“February saw the first cracks emerge in this view. However, they did not appear large enough to disrupt the economic backdrop,” she wrote.

“This view was turned on its head through March (and as we write, into April), with President Trumps resolve at rewriting the global’ trade order – at whatever cost. We have quickly learned 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 over owned, but in and of itself, these are not reasons for the sell-off,” Liu wrote

“From here, we are observing a cage fight to the death. Either Trump gets his way, or Trump gets his way. There is no alternative other than how outcomes could be softened either via negotiation or Fed policy easing. We have little transparency on either.”

“For equity investors, we are being forced to sit back and Key Portfolio Statistics* watch this play out. We know equities are priced for a significant economic slowdown already, and so any good news will be greeted with a sharp bounce but the sustainability will depend on a meaningful decline in policy uncertainty or exercise of the Fed put.

“On this basis, we think investors should take a balanced view on the cyclical vs defensive backdrop. At this stage, we avoid “hot spots” such as expensive or cum earnings downgrades stocks. We think focusing on stocks that are underpinned by structural growth tailwinds (such as healthcare / tech) and areas that benefit from rate cuts is sensible to ride out volatility, with valuation appeal an absolute necessity for any positions at present.”