Zechariah Bin Zheng @FundManagerZech: "🌍 𝗛𝗲𝗹𝗹𝗼 𝘄𝗼𝗿𝗹𝗱 _________________________________________ 𝗧𝗟𝗗𝗥 - Portfolio performance..."

Australia

🌍 𝗛𝗲𝗹𝗹𝗼 𝘄𝗼𝗿𝗹𝗱 _________________________________________ 𝗧𝗟𝗗𝗥 - Portfolio performance is currently around -𝟬.𝟰% 𝗬𝗧𝗗, assuming Asian markets stay flat, while the S&P 500 $SPX500 is up approximately +𝟵.𝟯𝟰%. These numbers remain provisional. - The result is disappointing. I understand the frustration. - The main issue is participation. The market has rewarded AI, semiconductors, and large-cap US technology. We have been positioned more toward China, payments, private credit, shipping, and valuation opportunities. - China and payments have been weak. Embecta was a clear stock-specific loser. Private credit has been stable, but it will not move like high-beta tech. - I do not believe the process is broken, but major positions need review. _________________________________________ 📉 𝗜 𝗸𝗻𝗼𝘄 𝘁𝗵𝗶𝘀 𝗶𝘀 𝗳𝗿𝘂𝘀𝘁𝗿𝗮𝘁𝗶𝗻𝗴 Some copiers joined recently and are down meaningfully. Others were up earlier and have now given back gains. That is uncomfortable, and I do not want to dismiss it. I get that. _________________________________________ 📊 𝗣𝗮𝗿𝘁𝗶𝗰𝗶𝗽𝗮𝘁𝗶𝗼𝗻 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝘁𝗵𝗲 𝗶𝘀𝘀𝘂𝗲 The rally has been concentrated in AI, semiconductors, and large-cap US technology. We have had limited exposure there. Instead, we have been positioned in private credit, China, payments, shipping, and selected low-valuation opportunities. That positioning has not worked recently. $KWEB (KraneShares CSI China Internet) KWEB is down around 𝟑𝟏.𝟐𝟗%, while the S&P 500 is up strongly. $BTC is also down around 𝟑𝟓.𝟏𝟗% year-to-date. So several major non-AI themes have not worked either. Payments have been weak. Embecta contributed around -𝟑% Private credit has been stable, but it will not keep pace with an AI-led rally. --- 🇨🇳 𝗖𝗵𝗶𝗻𝗮 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗽𝗮𝗶𝗻𝗳𝘂𝗹 China exposure has been one of the biggest sources of weakness. That does not mean it cannot fall further or that the bottom is in. But it does mean sentiment is already extremely poor. One frustrating part is that AI exposure has not been rewarded equally. $BABA (Alibaba-ADR) and $1810.HK (Xiaomi Corp) should, in theory, benefit from parts of the AI cycle through cloud, software, devices, EVs, and ecosystem growth. But because they are Chinese companies, they have not been rewarded in the same way as US AI and semiconductor names. The market has rewarded AI in the areas investors currently want to own. --- ❌ 𝗘𝗺𝗯𝗲𝗰𝘁𝗮 𝘄𝗮𝘀 𝗮 𝗰𝗹𝗲𝗮𝗿 𝗻𝗲𝗴𝗮𝘁𝗶𝘃𝗲 $EMBC (Embecta Corp) was a real stock-specific loss. The company lost share with a major customer, the share price fell sharply, and the thesis now carries higher execution risk. I do not want to minimise it. At the same time, one negative surprise does not automatically mean the whole process is broken. The question is whether the remaining business value, management response, and position sizing still justify holding. --- 🧠 𝗧𝗵𝗲 𝗯𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸 𝗶𝘀 𝘂𝘀𝗲𝗳𝘂𝗹, 𝗯𝘂𝘁 𝗶𝘁 𝗱𝗼𝗲𝘀 𝗻𝗼𝘁 𝗿𝘂𝗻 𝘁𝗵𝗲 𝗽𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 The S&P 500 and Nasdaq are market-cap weighted indices. Right now, they are increasingly an expression of AI, semiconductors, and large-cap US technology. The benchmark is useful for attribution, but it does not determine portfolio construction. I do not think the right response is to chase the strongest part of the market after it has already moved. That may feel better in the short term, but it is not the strategy. --- 📚 𝗟𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗲𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝗰𝗮𝗻 𝗹𝗼𝗼𝗸 𝘄𝗿𝗼𝗻𝗴 𝗳𝗼𝗿 𝗮 𝗹𝗼𝗻𝗴 𝘁𝗶𝗺𝗲 Fama-French showed that value has historically outperformed growth over long periods. Eugene Fama later won the Nobel Prize in Economics, and this work became foundational. But if you applied value blindly over the last 10 years, you would have looked very wrong. Growth won. US mega-cap won. Market-cap weighting won. Even strong long-term evidence can look wrong for long periods. So when people assume US exceptionalism, AI, semiconductors, and market-cap weighted indices will continue to dominate for many more years, maybe they are right. But it is still an assumption. It is not a risk I want to build the portfolio around after the move has already happened. --- 🧭 𝗪𝗵𝗲𝗿𝗲 𝘁𝗵𝗶𝘀 𝗹𝗲𝗮𝘃𝗲𝘀 𝘂𝘀 The recent performance is disappointing The correct response is not to pretend the drawdown does not matter. It does. The correct response is also not to force a recovery trade just to feel better. The work now is simple: * Review each major position * Cut where the thesis is broken * Hold where the thesis remains intact * Add only where risk-reward has improved and sizing remains controlled In 2019, I returned only 𝟬.𝟮𝟰% while the market returned 𝟮𝟲.𝟯𝟵% That was painful then too The results are frustrating. The relative performance is disappointing. But from a process perspective, I do not believe the strategy is broken. We will continue to reassess, stay disciplined, and act where risk and reward become clearly misaligned.

Not investment advice. The author may have financial interests in the mentioned instruments.