Insights

The Alpha Plus ETF returned +0.50% in June, slightly underperforming the S&P/ASX200 which gained +0.67%. However, it was a strong quarter for the fund which rose 4.54%, outperforming the ASX200 by 49bps. June saw a rotation towards beaten up defensive stocks as investors flip-flopped between risk-on and risk-off tilts over the month. This pattern was a repeat of earlier months where investors have had little conviction in what will lead performance.

The Alpha Plus Fund returned +0.50% in June, slightly underperforming the S&P/ASX200 which gained +0.67%. However, it was a strong quarter for the fund which rose 4.54%, outperforming the ASX200 by 49bps. June saw a rotation towards beaten up defensive stocks as investors flip-flopped between risk-on and risk-off tilts over the month. This pattern was a repeat of earlier months where investors have had little conviction in what will lead performance.

What are our highest conviction stock picks? Find out in our new and unique monthly video series Ten Cap’s 'Top 3', where the Investment Team outline what is behind three of our highest conviction long/short (money-making) ideas within the Australian equity market.

There were a lot of cross-currents working their way through the Australian equity market in June. The most powerful was a change in rate expectations by the RBA. The month started with further rate hikes expected, but by month end, these had been largely removed. This saw better performance by some early cycle cyclicals but not all – such as banks which are under pressure from a softening housing market. Alongside this, the AI thematic continued to exert itself – albeit with much volatility. Hear from Jun Bei Liu as she discusses the major market drivers and how the portfolio performed and is positioned as we enter 2H26.

We think Australian equities will remain rangebound as the tug-o-war between deteriorating domestic fundamentals clash with a solid global macroeconomic backdrop and a broadening AI thematic. This is not an encouraging outlook but neither is overly discouraging. Instead, all the price action will come below the headline index level as investors differentiate between areas which have further earnings and valuation risk versus areas which are underpinned by either structural tailwinds or are already priced for disappointment. Hear more form our CIO in this month’s Market Reflections update: Volatile and rangebound.

We have been cautious on Australian equities and we maintain that stance. While there are pockets of support beneath the surface, the domestic backdrop presents a number of meaningful headwinds that we think will keep the ASX200 bouncing within its twelve-month trading range of 8,400 to 9,100 for some time yet. We are conscious that being cautious has now become a consensus call and that does make us a little nervous, because the consensus has had a poor track record in recent years. But there is a time to be anti-consensus, and while we are happy to back ourselves against the crowd, we don’t think the current risk-reward balance argues for that now.

The Alpha Plus active ETF rose 1.75% in May, outperforming the ASX 200 (+1.15%), in a month where headline calm masked underlying volatility. Market leadership was narrow and highly concentrated, with large-cap Materials and Capital Goods the key driver of returns while Health Care, Utilities, Energy and Financials lagged. Despite modest index gains, the ASX experienced frequent large daily swings, reflecting unstable sentiment and fragile positioning. While the market did bounce, it again lagged global peers, particularly the US where AI-driven technology strength dominated.

The Alpha Plus Fund rose 1.75% in May, outperforming the ASX 200 (+1.15%), in a month where headline calm masked underlying volatility. Market leadership was narrow and highly concentrated, with large-cap Materials and Capital Goods the key driver of returns while Health Care, Utilities, Energy and Financials lagged. Despite modest index gains, the ASX experienced frequent large daily swings, reflecting unstable sentiment and fragile positioning. While the market did bounce, it again lagged global peers, particularly the US where AI-driven technology strength dominated.

Australian equities remain under pressure from a deteriorating macroeconomic backdrop, elevated inflation and a central bank that knows it must get inflation back to the low end of its target 2-3% range. We have argued against a catch-up trade for the equity market and we reiterate our stance - Australian underperformance is likely to widen not contract in coming months. It remains premature to position for the next upswing and an easing in policy rates. Patience is required.

Markets are volatile, and traditional portfolios are under pressure. In volatile environments, relying solely on long-only equity strategies can leave you exposed. That is why investors should consider investing in other strategies, such as active long-short ones, to better diversify their portfolios. While some active long-short strategies can be difficult for everyday investors to access, those offered through an ETF structure are not. Find out what the benefits of an active long-short ETF are in Jason Todd, CFA Money Magazine Australia article.

Australian equities have meaningfully underperformed global equities YTD. While some think it's time for catch-up, Ten Cap CIO - Jason Todd - thinks Australian equities face further underperformance risks amid a weakening economic backdrop, high valuations and earnings which are likely to trend lower. Jason Todd, CFA joins Andrew Geoghegan on ausbiz to discuss why he remains cautious on the local market outlook for the second half of the year, why he prefers resources over banks, and where caution is needed as higher rates and wage pressures filter through to earnings.

"Not every change is transformative, and not every adjustment is destructive." In his latest article for Capital Brief, Jason Todd, CFA argues that markets and entrepreneurs are far more resilient than current commentary around the Federal Budget suggests. He makes the case for maintaining perspective on policy changes. Incentives matter, but it is incorrect to infer that tax proposals will mark the end of ambition and aspiration for Australia.

What are our highest conviction stock picks? Find out in our new and unique monthly video series Ten Cap’s 'Top 3', where the Investment Team outline what is behind three of our highest conviction long/short (money-making) ideas within the Australian equity market.

Australian equities are in the midst of a hard lesson. The regime that underpinned equity returns – solid global growth, Chinese infrastructure spending, easy fiscal policy and accommodation and monetary policy – is moving in reverse. While economic growth is slow-walking it’s way lower, we are entering a downturn that most investors are choosing to overlook (underestimate). Recent underperformance is not over and until we know how high rates are going, how far growth will slow and the success in lowering inflation, equity returns are likely to continue disappointing.

It was a modest recovery for the Australian market after a brutal March sell-off that saw the equity market fall ~8%. Disappointingly, the domestic market significantly lagged global markets. The divergence reflected concerns around a deteriorating domestic backdrop as inflation forces the RBA to lift rates into a cost-of-living crisis. The result has seen weakness toward cyclical and rate sensitive parts of the market. While Australia’s tech sector performed inline with global tech its small market cap weight meant it added little to overall index returns.

The Alpha Plus Fund rose 2.24% in April, modestly outperforming the S&P/ASX200, which gained 2.18%. It was a modest recovery for the Australian market after a brutal March sell-off that saw the equity market fall ~8%. Disappointingly, the domestic market significantly lagged global markets, and in particular the US, which rose 10% as the tech sector rebounded from the Iran conflict driven lows. The divergence reflects concerns around a deteriorating domestic backdrop as inflation forces the RBA to lift rates into a cost-of-living crisis. The result has seen weakness toward cyclical and rate sensitive parts of the market.

The Alpha Plus Fund rose 2.24% in April, modestly outperforming the S&P/ASX200, which gained 2.18%. It was a modest recovery for the Australian market after a brutal March sell-off that saw the equity market fall ~8%. Disappointingly, the domestic market significantly lagged global markets, and in particular the US, which rose 10% as the tech sector rebounded from the Iran conflict driven lows. The divergence reflects concerns around a deteriorating domestic backdrop as inflation forces the RBA to lift rates into a cost-of-living crisis. The result has seen weakness toward cyclical and rate sensitive parts of the market. ‍

Stagflation has re‑entered Australia’s macro vocabulary with unusual ease, but the label is doing far more rhetorical work than analytical work. In technical terms, Australia does not (yet) meet that definition, but the risk is already being amplified with qualifications somewhere in the fine print. Stagflation is a powerful word, but misusing it risks overstating the threat and misunderstanding how both policy and markets are likely to respond.

What are our highest conviction stock picks? Find out in our new and unique monthly video series Ten Cap’s 'Top 3', where the Investment Team outline what is behind three of our highest conviction long/short (money-making) ideas within the Australian equity market.

The Alpha Plus Fund declined 9.3% in March, underperforming the S&P/ASX200, which fell 7.1%. It was a tough and disappointing month for the fund as the surprise onset of the Mid-East conflict upended our portfolio which had been tilted towards further cyclical improvement. In addition, the conflict did not play out like other geopolitical shocks where risk aversion spikes and markets immediately gap lower. Instead, the market ground its way lower as the conflict progressed and this made it difficult to determine how defensive to become and whether doing so would then leave performance exposed to a rebound.

Australia is poorly positioned for a supply-side driven energy shock. This explains why the equity market has been underperforming global equities despite being low beta and low growth. It imports energy and thereby inflation and exports growth while having very few hedges against a geopolitical shock such as defence. However, while relative performance is to an extent understandable, there is a lot of fear around the macroeconomic and market outlook based on opinions feeding negative headlines rather than the facts. The energy shock is creating problems, but we don't think they are as large as many opinions are suggesting.

The Alpha Plus Fund rose 2.31% in February, underperforming the S&P/ASX200, which was up 4.11%. It was a strong turnaround for the market following a sharp decline in January with mega‑cap Financials and Materials leading the way – unfortunately areas where the portfolio carries a more measured exposure. Sentiment rebounded strongly on the back of a strong reporting season for earnings, stabilising macro data, and supportive global market conditions. However, stock moves were extreme as positioning and changing expectations saw unprecedented price movements – both up and down – throughout the month.

February saw the Australian equity market bounce back sharply from the January sell-off. However, it was a narrowly led rally with banks and materials leading the charge. This is unusual but came against an extremely volatile reporting season and ongoing growth stock pressures. Against this backdrop, our focus has remained firmly anchored on earnings leadership, valuation discipline, and maintaining an appropriate level of portfolio risk as true market volatility begins to rise. Hear more form lead portfolio manager Jun Bei Liu as she dissects the past month and give her views on the outlook.

With little warning, the world has been plunged into a war between the US/Israel and Iran. The critical issue for investors is not the headlines themselves, but whether this conflict becomes long lived enough to impair economic growth or meaningfully alter the inflation and policy outlook. Markets can absorb shocks, but what they struggle with is duration meaning that “time” is the tipping point for the crisis to manifest itself into an economic shock that matters for markets.

Growth stocks have been in correction mode since October 2025 but the Australian market has continued to move higher as rotation into key index heavy weights has picked up. The fragile nature of confidence and constant flip-flopping of views on stocks has made it a difficult environment to navigate. What's working one day / week is reversing the next without warning. We have not come out of this volatility unscathed and it has been a difficult 3-month performance patch. However, we have a deep fundamental process which has worked through up /down cycles and which we continue to focus on. Listen to lead portfolio manager Jun Bei Liu as she walks you through the past month and outlook ahead.

January extended the rotation that began late last year, with performance increasingly concentrated in commodity-linked sectors. The S&P/ASX 200 closed the month +1.8%, supported primarily by Materials and Energy. Materials alone contributed more than 220 basis points to index returns, underscoring the narrow nature of market leadership. Against this backdrop, the Fund returned +0.35%, underperforming the broader index which rose 1.78%.

Markets are tough. You wouldn't think so if you looked at headline index returns for the year. Most key indices are firmly in the green and many are already up in the high single digit if not low double-digit ranges. Unfortunately, this is not where Australia sits with year-to-date gains at a lacklustre 4%. What’s more, the skew to returns (dispersion) has been significant at the stock level. For instance, the Info Tech sector is down 19% while Materials and Energy are up 13% and 11% respectively.

The Alpha Plus Fund fell -0.65% in December, underperforming the S&P/ASX200, which was up 1.30%.It was a disappointing month for the fund, as it failed to leverage a modest rebound in the broader market after the November sell-off. The growthier nature of the portfolio – despite having de-risked heading into December and more as the month progressed - was not enough to balance some extremely skewed sector performance and stock specific exposure within the technology and consumer discretionary sectors. After printing very solid returns through the first 10 months of the year, it was disappointing to give it all back – and then some – in the final months of the year.

The Alpha Plus Fund fell -5.93% in November, underperforming the S&P/ASX200, which was down -2.66%. The Australian equity market suffered a sharp correction led by growth stocks, and particularly those trading on high valuation multiples. This correction was specific to Australia with the local bourse meaningfully underperforming global markets and global growth stocks. The rotation away from growth stocks / YTD winners and towards defensive and value orientated exposures was initially triggered by expectations that Fed rate cuts were being put on hold with this rotation gathering momentum as domestic data also indicated that the RBA was finished cutting policy rates.

Markets never stop talking. Every day there is always a new piece of information. A new headline, a new news story. There is lots of noise, but underneath the noise is a pattern and that pattern leads to the reality of what's really changing. At Ten Cap, that’s what we are looking for, clarity within the chaos. At Ten Cap, we don't chase headlines, we don't chase trends. We apply disciplined, fundamental approach with precision and consistency. TCAP brings that discipline into an ETF, that’s available for anyone, its listed and transparent. Hear from our founders as they set out what sets the investment process of Ten Cap apart from its peers and how TCAP, our listed ETF provides access to this for all investors alike.

We think equities will post solid gains in 2026, supported by incremental improvement in the global economy, continued liquidity support by the Fed, a broadening out in earnings growth and structural tailwinds from AI. We are not concerned that domestic monetary conditions are at odds with other developed economies. We think this translates into a less positive dynamic rather than a large negative dynamic. Australian investors can expect to see an "average" year of returns, but given elevated volatility, these gains may appear very hard to come by. Hear from Ten Cap's CIO as he outlines his views for the 2026 macro backdrop.

We expect there to be a lot of similarities between 2025 and 2026. Global growth should rise modestly to around trend levels, consumer spending should remain supported by healthy balance sheets and strong wealth gains, policy rates will fall a little more, credit conditions will remain favourable, corporates should post solid earnings growth, rate sensitive investment will continue to rise and while sentiment towards AI will ebb and flow, it should remain a strong underpin for both economies and markets. Against this there are risks. Softening labour markets, sticky inflation, areas of private credit, speculative assets and rising long bond yields. But while these concerns are likely to cause plenty of angst, they should not derail the backdrop. Expect equity markets to trade higher in a very haphazard way with Australia posting “average” year returns in the region of ~10%. That’s not bad, but it’s not great and the volatile path will make these gains seem very hard to come by.

Clarity within chaos. This is the goal of our first listed ETF (ASX:TCAP). Rather than reacting to noise, we rely on fundamentals and pattern-driven insights to understand what's really happening in markets to give TCAP investors the best results. TCAP provides investors with access to an institutional grade investment strategy that has been around for more than 2 decades. Hear from founder and lead portfolio manager Jun Bei Liu and founder Jason Todd as they discuss what makes TCAP unique.

The Alpha Plus Fund delivered a net return of +0.49% in October 2025, outperforming the S&P/ASX 200 benchmark, which posted a modest gain of +0.39%. The ASX 200 experienced a volatile month, rallying to a new all-time high of 9,095 before retreating in the final week. This reversal was triggered by a stronger-than-expected CPI print, reigniting concerns over inflation and driving a more hawkish RBA, which held the cash rate steady at 3.6% in its November meeting and signalled a shift back to neutral.

The Alpha Plus fund fell 1.15% in September, underperforming the ASX200 Accumulation Index, which fell 0.78%, by 37bps. This represented a bit of payback / consolidation after an exceptional August, although not enough to dent 3Q returns which saw the fund rise 5.67% (outperforming the ASX200 by 96bps). September was a bit of a nothing month for the Australian market which was down despite US equities posting a solid 3%+ return and the tech heavy Nasdaq up nearly 6%. For the most part, there was no strong macro and/or directional drivers other than a winding back of RBA cash rate support post a very hot monthly inflation print and despite a pro-cyclical tilt to performance, it wasn't enough to lift the bourse into positive territory. ‍

Elevated valuations are the entry price for equity market participation. If you don't want to pay the entry price, then don't invest or look for cheaper pockets within the market. We don't like that valuations are unappealing, but we are pragmatic and we think the cost of not being invested (as an equity fund manager) outweighs the discomfort that high valuations create. Despite valuation concerns, we believe the bull market remains intact. The prospect of policy rate cuts alongside improving consumer spending and should be enough to offset a patchy earnings backdrop. In fact, we think the next few years will see Australia post above average equity market returns - a view we admit is more optimistic than consensus - but not inconsistent with an improving macro backdrop and a strong desire to buy into risk assets.

It was an tough month for active managers with the August reporting season the most volatile on record. Navigating this backdrop required flexibility alongside strong portfolio and risk management. We were not immune to stock specific disappointment – we suspect very few were, but a strong fundamental process and conviction in our positions underpinned what was a very strong month for the portfolio. The Alpha Plus fund returned 4.01%, managing to outperform the ASX200 by 91bps. We benefited from exposure to both domestic and global cyclicals as well as rate sensitives (including property). We remain positioned for lower interest rates and an improving growth backdrop while we are balancing this with high-quality structural growers where we see durable earnings power.

The bull market that began in March 2020 is neither old or exhausted. The ASX200 is now up around 100% from this date, and at first glance while this might appear a lot, when viewed in the context of historical bull markets the rally is neither large nor is it old. In fact, we would not be surprised if it continues for the next few years with equities posting above average returns during this phase. We know we are more bullish than consensus, but we have maintained this view throughout the year and markets have rewarded us with a very strong bounce back. Fear is high, but we think the bull market will roll on.

The Alpha Plus Fund delivered a strong result, rising 4.01% and outperforming the ASX200 Accumulation Index, which rose 3.10% by 91bps. This brings our YTD return to 6.90%, marking a very strong start to the financial year. The August reporting season was the most volatile on record, demanding agility and disciplined risk management. Despite some stock-specific disappointments, our conviction-led approach and robust fundamentals helped us navigate the turbulence effectively. While stocks jumped all over the place, the broad conclusions from the reporting season were not far from our expectations when you are in a rate cut cycle and economic growth is bouncing at trough levels. We stay positive and positioned to take advantage of lower rates, a stronger consumer and improving macro conditions.

It has been a strong start to the new financial year with the Alpha Plus Fund rising 2.8%. While market leadership remains volatile, we think cyclicals will begin to show more consistent performance as RBA rate cuts help put a floor in domestic activity and boost confidence in a recovery. While there are counteracting forces at a global level, we are also more constructive on the resource sector given appealing valuations and potential upside in commodity prices. We think the reporting season will confirm that the domestic backdrop has held in despite inflation, interest rate and economic growth concerns. Looking ahead, the backdrop requires a flexible and pragmatic approach but we are optimistic that solid earnings, rate cuts and diminishing global risks are catalysts for further market upside.

For the past 5 months the consensus narrative has been to push back on the equity market rally. First it was because trade risks were unknown. Second it was because growth risks were underestimated. Third it was because the (all important) Fed would not ease due to sticky (stag)inflation and now it’s because valuations are high. To date, all of these fears have all proven to be overly pessimistic. In time, they may not, but these are not "buy and hold" markets and while there are downside risks, there are also positive tailwinds that we think will keep the rally going.

We have been bullish since early April and have maintained this view despite elevated valuations and macro uncertainties. We push back on the view that markets are complacent. While there are risks to the outlook, we think strong corporate fundamentals, policy rate cuts and a shallow growth slowdown are enough to push equity markets to fresh highs through 2H25. We doubt the August reporting season will derail positive market momentum and recommend leaning into into domestic cyclicals and small-to-mid caps while avoiding crowded and overvalued trades.

The Alpha Plus fund delivered a 2.79% return in July, outperforming the ASX200 Accumulation Index, which rose 2.36%, resulting in 43bps of outperformance. This marks a robust start to FY26, with the fund benefiting from strategic sector rotation and solid macro tailwinds. The fund capitalised on renewed investor interest in sectors like consumer discretionary and industrials, which are sensitive to domestic economic conditions. Firmer commodity prices and signs of policy easing in China supported a rebound in resource stocks, contributing positively to the portfolio.

Welcome to Ten Cap’s “Meet the Expert” series. It is a privilege to have Alex Schuman, CEO of Carla Zampatti join Ten Cap co-founder Jun Bei Liu for an insightful discussion. Carla Zampatti is Australia's most iconic fashion label, founded 60 years ago by his late mother, Carla Zampatti AC. Following her passing in 2021, Alex took over the CEO role and alongside discussing what Carla's legacy means for the brand, women and the Australian fashion industry, he also outlines his vision for taking the brand into a new era.

Equity markets continued to climb through June although a lot of the "momentum" stocks began to fade towards month end. This made for a tricky investment backdrop as the winners become losers and losers become winners. An uncertain backdrop means that there will be times when markets move against the trend on a short term basis. Encouragingly, the IPO markets is open again with Virgin leading the charge. Listen as lead portfolio manager Jun Bei Liu provides an update on the quarter, what has been working and where she sees the opportunities as we look ahead.

We think the tailwinds from offshore will remain relatively favourable (at least not deteriorating to any meaningful degree) while at the same time domestic drivers will gradually strengthen as the RBA eases policy settings. Historically a policy rate-cutting cycle outside of an economic recession is very bullish equity markets. If we are at the start of a cyclical upswing, even if moderate in amplitude versus history, then equities will remain a decent place to be.

Equity markets have had a phenomenal rebound since April 9th. It has left many scratching their heads given macroeconomic and earnings fundamentals have unquestionably weakened. We think a lot of the rebound is the result of removing the “bear” case out of the consensus narrative and adding in the potential for policy rate cuts. We know the macro backdrop is set to slow but we think investors should stare down near term risks on the basis that policy support will be available if required and that while slowing, the global economy is still growing. Domestically, Australia remains well insulated from the global trade war and stands to benefit as the RBA ramps up policy support. We pivoted as the rally took hold and we are prepared to stick with it.

It’s been a challenging and at times, stressful environment for equity investors over the past few months. Markets have done a round trip, rising to all-time highs in February, falling to within a whisker of a bear market through March/April before climbing a wall of worry back close to fresh highs by June. These are not normal times, but they are a function of investing in risky assets - where we manage the good and the bad. The Alpha Plus fund led by Jun Bei Liu, has weathered this volatility better than most by being pragmatic, avoiding large risk-on/risk-off rotations and sticking to a well-tested bottom-up fundamental process. Hear how Jun Bei and the team have managed the portfolio through this period and how they are positioned to take advantage of an uncertain environment in her June Market Reflections update.

It was a strong month for the Alpha Plus fund which rose 5.4% to meaningfully outperform the ASX200 Accumulation index which rose 4.2%. This takes annualised net performance since inception to 12.1% against a benchmark return of 9.1% (3.0%p.a. outperformance). Investors chased the market higher as confidence that the US could avoid recession increased and bear case economic and market scenario were reversed. Cyclicals and growth stocks led the charge higher although by late month, even defensive laggards had joined in the upswing. There appeared very little to trouble the equity market through May despite weathering mixed news on the trade side and a reasonably sharp spike in US long bond yields with the RBA helping to inject some confidence with a dovish rate cut in early May.

We think the equity market outlook is constructive despite ongoing uncertainty around trade and growth. Equity investors will need to stare down a multitude of risks including the uncertainty that results from US President Trump running policy via social media. But potential risks are not insurmountable. As long as news flow is better than expected, the US economy escapes recession and policy support gradually ramps up, then we think equities will trade higher. But the beta rally is getting tired and we expect alpha to be the catalyst for upside from hereon in.

Co-founder & lead portfolio manager Jun Bei Liu provides a quick update while on the ground in Hong Kong. Her overriding impressions are that sentiment on China remains weak despite recent policy support, that consumer facing areas are still trading very mixed and that the housing sector has not yet bottomed. Finally, while offshore investors are buyers of Chinese equities, onshore investors are predominantly sellers, highlighting the dichotomy between those looking in and those looking out.

Welcome to Ten Cap’s “Meet the Expert” series. Consistent with the goal of providing clients with market leading insights and views, this will be a regular Q&A series featuring leading experts across economics, markets, and industry. It is a privilege to have Jo Masters, Chief Economist at Barrenjoey Capital Partners as our first guest. Jo discusses her thoughts on the global and domestic economic outlook and where she sees the path for policy rates, the A$ and commodity prices. She also provides some unique thoughts on the demise of US exceptionalism and what that may mean for US and Australian assets.

It was a strong month for the Alpha Plus Fund where we were quick to pivot and add more beta following US President Trump’s announcement of a 90 day pause period for implementing reciprocal tariffs. The fund rose 3.74% in April, outperforming the ASX200 Accumulation Index which rose 3.62% and taking annualised net performance since inception to 11.3% against a benchmark return of 8.5% (2.8% p.a outperformance). The violent rotation from risk-off to risk-on is a strong reminder of how fluid and uncertain the global backdrop remains and how sensitive it is to changing newsflow. We still don't know where tariff agreements will land or what damage the trade war has already caused, and this will likely keep markets highly sensitive to political and economic developments.

Welcome to Episode #2 of Ten Cap’s Meet the Expert Series featuring Gerard Minack, CEO & Founder of Minack Advisors. Gerard is one of the world’s most in demand macro strategists and is well known for his honest and straight down the line views. In this episode, Gerard does not disappoint. He thinks equity markets are complacent on growth risks and heading lower; US equity rallies should be sold and not bought; Large asset allocation shifts out of the US are yet to come; And finally, private markets are “marking their own homework” but macro + funding risks raise future liquidation concerns for the asset class. In sum, the world is not where it was pre–Liberation Day but a lot of assets are back at pre–Liberation Day levels and that’s not good risk-reward, its bad risk-reward.

Everyone is trying to work out whether to be “risk-on” or “risk-off” but these are not the only investment settings to take. We think data is supporting a tilt somewhere slightly left or right of centre depending whether you are a pessimist or optimist. That’s pretty neutral territory, and to be honest, we don't think that straddling the middle ground is a particularly bad place to be when outcomes remain binary and the cost of being wrong is high.

It’s only natural when uncertainty rises to become short sighted. But the danger in this is that when things are bad, you only see red, which is how the current backdrop appears. Going against the grain, we think we’re past peak trade uncertainty and that negotiated outcomes will be treated as incremental positives rather than negatives for markets as we move forward.

It was a somewhat disappointing month for the Alpha Plus fund which until the final week of March had been performing well versus a struggling market. However, following a reasonable sell-off across the broader index, we began to hunt for bargains and rotated back into a handful of stocks which had fallen significantly, and which we thought were cheap enough to be insulated from ongoing trade concerns. The fund fell 5.7% (net) to underperform the ASX200 Accumulation Index which was down 3.4%. From inception the fund has returned 10.9% pa versus the ASX200 return of 8.1% pa (annualised outperformance of 282bps pa).

We are confident that the recent equity market sell-off is a stumble. But the damage to equity indices might take some time to repair even if we are already seeing positive days emerge. For equity investors, the question is whether the bounce off lows is sustainable. At this stage, we are doubtful as trade related uncertainty has not yet passed and downside growth risks remain high. If the US economy emerges through recent headwinds with just a modest growth downgrade, then equities will trade meaningfully higher through year end. But until we have this transparency, the path will remain bumpy.

The February reporting season was largely overshadowed by broad macroeconomic developments that unfolded at the same time results were delivered. While difficult to discern, we identified three key takeaways from the reporting season that have long term implications for investors. First, there was a rotation out of (yesterday’s) expensive winners; Second, there was a rotation into (yesterday’s) laggards; and Third, there was broad caution towards any stock / sector that might be collateral damage of Trump's ongoing trade war. Overall, the reporting season gave us confidence the outlook is brightening and that "value" and performance "laggards" are where future gains lie.

Founder and Lead Portfolio Manager Jun Bei Liu, presents Ten Cap's first "Buy, Watch, Sell" stock idea series. In this months update, she outlines the buy thesis for a2 Milk (A2M.AU), why we are selling Endeavour (EDV.AU) and why Cochlear (COH.ASX) remains on watch.

February was a tough month for equity investors and the Alpha Plus fund. After a strong start, a meaningful reversal took place through the last 2 weeks - which dragged the ASX200 down more than 5% from its intra month high. The Alpha Plus fund was caught up in this sell-off, falling 4.3% and underperforming the ASX200 Accumulation Index which was down 3.8%. However, since inception, annualized net performance sits at 12.0% against a benchmark return of 8.7% (3.4% outperformance).‍

We think markets are wedged between rising trade uncertainty and a deteriorating US economic backdrop with elevated valuations and heavy positioning exacerbating price volatility. This is not a good place to be when equities have a razor thin cushion for disappointment or when they are priced for “best-case-outcomes” such as trade related uncertainty. However, we doubt the drivers behind the current sell-off and rotation signals the end of the bull market.

The Alpha Plus fund rose 5.0% in January, substantially outperforming the ASX200 Accumulation Index which rose 4.6% and taking rolling 12-month (net) performance to 20.7% against a benchmark return of 15.2% (5.5% outperformance).

I’ve been bullish on equities for 2 years and we're not ready to change this call. While equity markets have had a strong run and this makes them vulnerable to tactical corrections, we believe they will emerge through rising uncertainty to trade meaningfully higher as cyclical tailwinds strengthen and structural tailwinds broaden out.

There are numerous benefits of a long short equity strategy versus a traditional long only equity strategy. We discuss these benefits in general and more specifically as they relate to Ten Cap's Alpha Plus Strategy.