When markets move fast, staying calm and thinking clearly becomes a competitive advantage.
April’s turbulence delivered a sharp reminder of that, and at Forager, we’ve been busy turning volatility into opportunity.
On the surface, it was a month of chaos: the Nasdaq surging 12% in a single session after the White House signalled a tariff rollback and the bond market flashing warnings. On top of this an economy that, despite solid fundamentals, faces a growing crisis of confidence.
Donald Trump's tariff policies have left markets whipsawing as “Liberation Day” tariffs, slapped on nations (and penguin-inhabited islands) have damaged global sentiment. While some tariffs have been paused, China remains firmly in the firing line, and sector-specific tariffs, particularly targeting pharmaceuticals, loom on the horizon.
Markets initially shrugged. Then they tumbled. Then they rallied with breathtaking speed. But behind the headline moves, deeper concerns have taken root. Consumer confidence, already fragile, has been battered. Corporate decision-making has slowed. As Forager's International Fund Portfolio Manager, Harvey Migotti, puts it: "Animal spirits have been hit, and that damage doesn’t repair overnight."
While the media focused on equity markets, the bond market quietly screamed. A spike in long-term yields — to levels that threaten housing markets, corporate debt refinancing, and consumer spending — caught the administration’s attention. Trump himself admitted he was “watching the bond market closely,” a rare glimpse into what really matters in the White House playbook.
In short: tariffs may come and go. The hit to sentiment, investment, and earnings growth could linger.
Positioning for Uncertainty
Long before the turbulence hit, the investment team had already shifted the International Fund’s exposure away from the US, down from over 70% at February month end in 2024, to the low 40% range by February month end 2025. Capital was redeployed into more attractively priced markets like Europe and Japan, all while carrying the highest cash balance the Fund has had in years.
That defensiveness has paid off. Valuations drove the shift. We weren't finding enough value in the US compared to opportunities elsewhere.
Microcaps have been another source of strength. The investment in Nutex Health (Nasdaq:NUTX), a network of small, high-margin hospitals in the US, has been a standout. Discovered when it was down more than 99% from its highs, Nutex has rebounded sharply, backed by a turnaround in profitability and favourable regulatory developments. It’s a perfect example of how nimble investing and detailed, on-the-ground research can uncover mispriced gems, even in volatile markets.
Nutex’s recovery hasn’t just cushioned the fund during the market chaos—it’s driven significant outperformance.
Eyes Wide Open
Despite the recent rally, risks remain elevated. Tariff uncertainty, China relations, and political unpredictability in the US aren’t going away anytime soon.
The playbook here is simple:
- Focus on quality. Top-tier businesses with clear growth runways and robust balance sheets.
- Stay diversified. Across geographies, sectors, and economic scenarios.
- Be nimble. The ability to adjust quickly to new information is critical.
- Avoid the obvious landmines. Businesses heavily exposed to discretionary spending, complex supply chains, or China-dependent demand are under a cautious lens.
History tells us that the best returns are often made during periods of fear and uncertainty. We're not predicting the next move on tariffs, or Trump's next tweet, but we are confident that our focus on disciplined, research-driven investing will deliver results over the long term.
In volatile times, that’s exactly what matters.
This article was written based on the latest Stocks Neat podcast — you can listen to the full podcast here: