Financial markets started the year on a note of optimism, buoyed by expectations of at least 4 rate cuts and the confidence that the US economy would be able to avoid a recession. The tailwind from this benign narrative, increasingly became a headwind and source of volatility as the tenacity of inflation and the resilience of the labour market surprised the markets.
10-year treasuries rose from 3.8% in 2023 to 4.2% end March.

Against this backdrop, the fund started the year with a return of slightly over 16% in 1Q 2024, outpacing the major market indices.

In as much as the relative performance of our fund can be attributed to the stocks we hold, in 1Q the out-performance can also be attributed to what we avoided. Apple and Tesla are the 2 detractors from the magnificent 7 that are absent from our portfolio.

Our investments in Semiconductors, Software and Cloud Service Providers provided the fund with the outsized performance on the back of the market’s continued fascination with AI. We believe that the success of AI ultimately rests on access to quality data. Our current research focuses on ownership, infrastructure, management, security, analytics, and storage of
data., and hopefully, the volatility in today’s market will present us with good entry levels in this space.

We conclude by reiterating a point we have made before, we believe the future is much closer than we imagine. As we observe the implementation of artificial intelligence unfold before our eyes, we are reminded of Jensen Huang’s warning, “You don’t wanna miss the next 10 years”.

29 Mar 2024