BlueOrange Asset Management March results

Our weighted average return in March was -1.94%. Since 2015, we have generated a net return of +33.05%.

In terms of investment strategy performance, our weighted average net returns for March were (a) -0.61% for conservative strategies, (b) -1.60% for balanced strategies, and (c) -3.37% for aggressive strategies.

Financial markets continued to experience significant volatility in March and no sector was spared.

The prospect of global trade war, coupled with heightened tensions in Syria meant waking up every morning to new headlines that sent markets into tailspin or euphoria. By the end of the month, ‘tailspin’ had gotten the upper hand.

We cannot control world political events or censure the tweets of powerful individuals.

However, what we do offer is a steady hand and a sense of perspective when irrationality is running rampant.

Last month we wrote that “The primary instigator for February’s sell-off was higher inflation, which was signaled by a better than expected average hourly earnings data on February 2nd.”

Well guess what? In March, this same data point came in lower than expected and showed that US wages were only growing at 2.6% year-on-year as opposed to the 2.9% that was reported in February. No matter. The market had found its reason to panic and data to the contrary was no reason to stop acting hysterically. Thankfully, chaos generated from news headlines plays into the hands of experienced portfolio managers, and even though volatility is tiresome, it does create opportunities that lead to superior performance in the long-term.

One positive of note is that the rise in interest rates since the start of the year means that yields on high quality USD bonds have become interesting once again, which serves to benefit conservative investors.

In spite of all the market volatility, our sales staff had their best ever months in February and March, which means that we were able to invest new client funds at attractive price levels. Congratulations to Andrejs and his team. You are doing a brilliant job!

In April, we have seen very strong earnings fueled by an expanding global economy and the Trump corporate tax cut. US sanctions on Russian industrial titans has made the world take deeper consideration of commodities and their availability and has sent base metals prices higher. We have been patiently waiting for this sector to attract more attention and have been pleased how our chosen investments have performed. As I write this commentary, we have already more than made up for March’s negative performance results.

On behalf of our Client Portfolio Management team, I thank you for your continued trust and support!

Pauls Miklaševičs

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