As at June 30, 2025
Equity Commentary
01/
The unexpected announcement of sweeping tariffs—dubbed “Liberation Day” caught markets off guards and triggered a sharp 12% drop in the S&P 500 Index through April. The subsequent rebound was equally dramatic, with the S&P 500 Index rallying 25% as incremental positive developments emerged by end of Q2. Long/short experience and daily cross-team risk meetings allowed the team to contain drawdowns while uncovering dislocated opportunities on both the long and short side.
02/
After an early-year rush into AI mega-caps driven by momentum and fear of missing out (FOMO), investor sentiment quickly turned following capex concerns, triggering sharp reversals and rapid rotations. As tariff headlines added to volatility, capital flowed defensively into low-volatility names before rotating again. Market leadership is now more balanced and less concentrated, with fewer crowded trades across sectors and factors.
03/
With uncertainty around tariffs and other global economic developments, the market outlook remains unclear. The equity portfolios are positioned with tighter risk control and a focus on resilient, structural growth companies. The team remains prepared for further dislocations and continues to build diversified return drivers across long and short exposures.
The last quarter and pretty much the entire first half of 2025 has been particularly noisy—characterized by the sell-off due to tariff-related uncertainty and subsequent rebound due to the backtracking from initial policy. In addition, a temporary flare-up in middle east hostilities caused volatility in commodity markets.
Looking ahead, the ongoing trade war and policy uncertainty will likely continue to weigh on markets and business activity as the U.S Federal Reserve awaits further data on the economic impacts before making monetary policy decisions. All the while increased inflation expectations, weakness in the housing market and an increasingly tapped out U.S. consumer points to elevated recession risk. We have positioned the portfolio for a wider range of outcomes given the uncertainty, while continuing to focus on companies with idiosyncratic growth prospects that could be sought after in a slowing-growth environment.
As of June 30, 2025 (%) | 1M | 3M | 6M | 1YR | 3YR* | 5YR* | Since Inception* | Inception Date |
PICTON Global Equity Fund (F) | 3.78 | 8.32 | 8.58 | 20.50 | 20.98 | 15.27 | 10.67 | (2015-10-29) |
PICTON Long Short Equity 130/30 Alternative Fund (F) | 3.25 | 10.14 | 8.85 | 26.35 | 19.29 | 18.53 | 14.26 | (2018-09-27) |
PICTON Market Neutral Equity Alternative Fund (F) | 0.29 | 3.24 | 2.50 | 9.01 | 8.49 | 8.67 | 7.99 | (2018-09-27) |
PICTON Long Short Equity Alternative Fund (F) | 1.60 | 7.05 | 5.24 | 15.46 | 13.36 | – | 14.69 | (2020-07-08) |
(*) Annualized performance.
Source: Picton Mahoney Asset Management
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