MyNest US Fund Apr 25

Dear Investors,

The month of April will likely go down in history as one of the most significant as the United States abandoned the World Trade Order that it painstakingly built since the 2nd World War. What it meant for the US and the world going forward remains to be seen.

I appreciate your trust in me to manage your hard-earned money and your continued support by putting more into the fund despite the uncertainty ahead.

As trade barriers are raised the impact of these policies on the global economy cannot be ignored and as such I have positioned the fund with more cash to weather the storm ahead.

Sale of AO Smith

AO Smith was added to the fund with the thesis of a housing recovery in China, combined with strong US economic growth. Their revenue generation was mostly from the sale of water heating equipment; hence this thesis was no longer valid despite their decent recent earnings.

Trade barriers effectively hurt consumers, and headwinds from the drop in demand in housing will ultimately affect AO Smith’s business. Therefore, the fund exited this business at almost the same price we bought it.

Opportunities During Market Volatility

The sudden stock market drop provided investment opportunities in companies I have long admired. Amazon was added as a position in the fund. Furthermore, I have added stakes in Uber and Rio Tinto during the selloff.

Lastly, more put options were sold during this volatile period for companies whose shares I am interested in adding at lower prices. I shall not reveal these positions, but please be assured that such actions are always secured by cash and are non-speculative in nature.

MyNest US Fund Portfolio Compositions

Investors who invested cash during the month bought units at $0.989. The stock market had subsequently recovered and unit price is $1.018 at the end of April.

MyNest US Fund Performance

With our actions during this volatile month, MyNest US Fund had opened a 7.13% gap with our benchmark, the S&P 500 index. This outperformance is partly due to the weakness in the technology space. Our option strategy also plays a part in contributing to this outperformance so far.

Segment Chart

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MyNest US Fund cash level grew to 14.7%, allowing more flexibility going into a more uncertain period in time. Despite such uncertainties, investors should take comfort that the Fund is invested in quality companies with strong competitive advantages to weather the storms ahead.