Results of funds and strategies for March 2025

Andrei Movchan

Apr 21, 2025

After a rather dull February from the perspective of the American stock market, after popular analysts traditionally divided into three camps (some said it was not a correction and the market would always grow, others said it was the beginning of the bursting of the overbought American markets bubble, and the third said there was no bubble and the market decline was the result of Trump's actions), March turned out to be even more pessimistic. NASDAQ fell by 7.3% in March, S&P 500 by 5.6%, retreating to July 2024 levels (although the volatility index - VIX - remained unchanged, indicating there was no panic), the dollar lost 4% against the euro and 3% against the pound.

We at Movchans’ Group, who do not believe that markets grow forever and are convinced that American stock indices must eventually exhaust the potential for abnormal growth due to 'excess' money in the economy and the effect of positive feedback, leaned towards the second explanation in March: the reason for the trend changes is the loss of non-fundamental growth factors. Explaining the correction solely by Trump's policies seems incorrect to us - it is enough to note that European indices also changed their trend since early February and behaved pessimistically in March. However, it is obvious that Trump's declarations of a 'new economic policy' introduced an element of uncertainty in March (and in April introduced an element of panic); unpredictability, rumors, a massive attack on everything the White House does by well-coordinated and media-controlling opponents - all this could not but lead to negativity in the markets, but it was a trigger, not a fundamental reason.

Attentive investors could not help but notice that the overall change in public sentiment in the markets was occurring (and is occurring) against the backdrop of stable (good or bad - depending on the point of view) economic indicators in the US, Europe, and the rest of the world. The Fed was in no hurry (although Trump, foreseeing recession risks, publicly called on the Fed to lower the rate), inflation was decreasing, and oil prices were stable. In April, of course, high volatility began thanks to the repeatedly declared but still unexpected move by the White House with tariffs (April only reached its ides, but this move has already changed many times, and markets simply do not keep up with the speed of the new president's actions) - but fundamentally little has changed. In fact, investors were selling on rumors and fears about what might happen due to innovations in US policy - but not on facts, implementing the first part of the proverb 'Buy gossips, sell news' in reverse.

Here one could speculate on the implementation of the second part - will investors actively buy back the market when it turns out that the rumors were exaggerated? We do not know, but we think (and April news does not change our point of view) that thanks to the 'Trump trigger' we are witnessing a change in the long-term trend in the markets. This was bound to happen sometime - and better sooner than later; it seems the era of insane concentrated growth has come to its end. It seems there will be no return.

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Despite market problems, all Movchans’ Group products performed well in March and in line with expectations:

ARGO SP showed an increase of 0.65–0.82%, its shares ended the quarter with an annual yield of 7.0–8.8%. This is above both the target yield and the managers' plans, so most likely the growth rate of the fund's share price will decrease in the near future, especially since ARGO is not a market-neutral product and is not fully protected from market fluctuations.

LAIF SP, as well as FLAG and accounts managed under this strategy, showed a 0.52–0.71% increase in share value; for the quarter, the yield is 5.7–7.7% per annum, which is quite consistent with the yield since launch (5.8–7.8%). Looking ahead, I will say: the first two weeks of April brought the strategy very high income.

GEIST SP ended March with a 2.7% decrease in share value; This reduced the fund's lag behind the S&P 500 by another 2.9% (S&P 500 fell by 5.6%). Since the New Year, the value of GEIST SP shares has decreased by 2–2.2% against a 4.3% decline in the S&P 500.

Shares of ARQ SP lost 0.7–0.8% amid a dramatic decline in American stock indices. Given the market dynamics in April, the decline in ARQ share value may be even greater - and this is an excellent moment to increase positions in the fund, whose long-term results, as I have written many times, do not depend on short-term volatility. For the manager, this is also a very opportune moment - he can invest new money at a significantly higher yield.

Against the backdrop of a negative trend in medium-term bonds, the FISTR strategy, after a very successful start to the year, brought investors 0.12–0.2% income in March. Since the beginning of the year, the strategy shows 6.2–7.7% per annum, which is above expectations.

Finally, the Cossack fund brought investors only 0.29% in March - but this is against the backdrop of a fall in all its benchmarks. The main reason for the decline in yield was a significant drop in the value of the Turkish lira due to political events in Turkey. For the first quarter, Cossack brought 2.2 or 9.1% per annum - again a result above all benchmarks and the fund's target yield.

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In conclusion of the letter, I should write about how our managers act in the current conditions. Here I cannot add anything new: our products are positioned based on our long-standing belief in the finiteness of market euphoria; we continue to do what we have done in recent quarters - and quite successfully. We strive to be as market-neutral as possible. We have increased the level of protection against market risks in all products, and otherwise continue to implement the same strategies by the same methods. As the first half of April showed, this logic works.

Thank you to all our investors for your trust; we continue to work on the preservation (first and foremost) and profitability of your investments. See you in a month and we'll talk about the rollercoaster of April.