Visio Allocator Fund, a multi-asset, multi-strategy fund based in Finland, recorded its weakest monthly return in its near 15-year history due to a combination of factors. The fund’s largest investment in Novo Nordisk experienced a particularly sharp decline during the month, while its notable exposure to U.S. stocks also contributed to the downturn. Perceiving the market situation as “political theater” rather than a reflection of fundamental economic and market issues, the decision not to hedge left the fund unable to cushion the losses. In light of the recent market weakness, the Visio team sees the coming weeks “an exceptionally attractive window for investors to add high-quality companies to their portfolios.”
Visio Allocator Fund posted a loss of 13.7 percent in March. The fund’s largest investment, pharmaceutical company Novo Nordisk, experienced a sharp decline during the month. “The reasons behind Novo’s decline include tariff fears, the dispute between the United States and Denmark over Greenland, and slower-than-expected growth in new prescription customers for the weight-loss drug Wegovy,” explains the team behind Visio Allocator. “In our opinion, Novo Nordisk’s growth potential relative to its current valuation is significant.”
“However, we still want to hold U.S. stocks, as we see them offering the best operating environment, structural growth, and ability to innovate.”
The fund’s significant allocation to U.S. stocks, combined with the weakening U.S. dollar, also weighed on its March performance. “However, we still want to hold U.S. stocks, as we see them offering the best operating environment, structural growth, and ability to innovate,” the team explains. “After the current decline, the companies we own are now even more attractively priced, raising their return expectations for investors,” the Visio team adds. Notably, large U.S. tech companies are currently at their most inexpensive level relative to the S&P 500 index in nearly a decade. As of the end of March, Visio Allocator Fund had a net equity exposure of approximately 43 percent to the technology sector.
Heading into March, Visio Allocator Fund chose not to hedge against a potential market decline, as the team believed there was “nothing fundamentally wrong with the economy and markets, despite the prevailing fragile market sentiment.” While the team did reduce net equity exposure using equity index derivatives during the month, they maintain that “the current market decline is more likely a short-term correction driven by political theater.”
“The current market decline is more likely a short-term correction driven by political theater.”
Visio Allocator Fund, which saw its assets under management slip below the €100 million mark, employs a multi-strategy investment approach. The fund invests in individual equities, fixed-income securities, and market-neutral strategies. It also aims to protect capital when the team perceives a heightened risk of a significant market downturn. The Visio team views the coming weeks as “an exceptionally attractive window to add high-quality companies” to investor’s portfolio. “This is most likely the best buying opportunity of the year before we head toward new highs in the U.S. markets. A blow-off top is coming.”
