Crescit performed slightly worse than indicated in March as the fixed income portfolio contributed negatively during the month. The previously reduced exposure to the equity market served us well and reduced the loss in the derivatives portfolio. We increased our relative exposure to US equities ahead of the month, which turned out to be too early, but as we used options to create the exposure, we managed the very negative movement reasonably well.

We maintain a somewhat cautious positioning in light of the continued very high uncertainty and upcoming trade tariffs. We continue to be very active in our implied/expected volatility trading. Option pricing has been very volatile during the year, creating good opportunities on both the upside and downside. At the same time, we maintain a continued overweight to corporate credit, which is typically lower risk than the equity market.

Inflation has stopped falling and looks set to rise again, which means that interest rates remain attractive. As long as interest rate cuts are on hold, we therefore see good opportunities to derive our return from fixed income instruments while waiting for better opportunities in the stock market (which appear to be coming at the time of writing).