March experienced heightened volatility again, driven by ongoing uncertainty regarding U.S. trade policies and growing recession concerns. While this led to declines across the portfolios, we remain focused on capitalising on the opportunities in front of us.
Market Overview and Performance
The ASX All Ordinaries Accumulation Index declined 3.5%, reflecting weakness across global markets: MSCI World was down 5.0%, Nasdaq fell 4.4%, and European markets declined by 3.5%. Japan managed slight gains of +0.2%, and emerging markets were relatively resilient +0.3%. Our Growth Equities Portfolio declined 8.8%, Balanced Equities -6.1% and High Conviction -10.7%. The Enhanced Yield Portfolio returned 0.5%. We’ve taken the opportunity to invest in several quality companies that appear fundamentally oversold and well positioned to rebound.
Portfolio Positioning and Key Updates
At month end, we maintained reasonable cash levels while reducing exposure to companies more vulnerable to an economic slowdown. We increased some of our core holdings where valuations were compelling and initiated new positions in Wesfarmers, National Australia Bank, and Ramelius Resources, a well positioned Australian gold producer. This pullback is different to previous market downturns. Unlike the GFC, COVID, or the 2018 and 2022 selloffs, this is a policy induced correction and policies can change quickly. We believe logic will ultimately prevail, paving the way for negotiated agreements and a recovery in sentiment. In this context, we view the current volatility as an opportunity.
March Newsletter
Outlook
Volatility has continued into April, with several high quality companies now trading 30-50% belowhighs for earlier this year, despite no change in fundamentals. We’ve used this market weakness to deploy capital, reducing our previously high cash levels to approximately 5% across the portfolios at the time of writing. A positive development has been the sharp shift in Australian cash rate expectations. Significant cuts are now priced in for 2025, with the latest forecasts suggesting a year end rate near 2.75%. While projections change often, this repricing highlights the flexibility available to support the domestic economy if needed. Although we cannot pinpoint the exact bottom of this market downturn, we remain confident that investments made during periods of extreme valuation dislocation will ultimately reward patient investors – just as they have in previous cycles.
Regards
The Endeavor Team
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*Note: Performance of the strategy group is representative of individual client portfolios, although performance can differ due to inherent differences between clients portfolios such as initial entry timing, legacy holdings or requested stock exclusions. Performance measured is after fees, taxes and franking credits. Monthly performance figures include an accrual for fees charged quarterly.
