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Highlights
- Big tech funds face sharp March losses amid global tensions
- Major fund strategies shift toward cash and resilience
- AI and luxury sectors seen as long-term plays despite volatility
Global tech-focused investment strategies were hit hard in March, with notable drawdowns stemming from renewed trade tensions triggered by former U.S. President Donald Trump’s aggressive stance on China. Several top-performing Australian funds, heavily exposed to artificial intelligence and semiconductor companies, have taken strategic steps to adapt to the shifting landscape.
Munro Partners’ $1.5 billion Global Growth Fund experienced a 7.6% decline last month, largely due to significant holdings in companies like Nvidia (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM), and Broadcom (NASDAQ:AVGO). These firms are part of the so-called “Magnificent Seven,” a group that includes tech giants like Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), which collectively saw declines of up to 19% by March's end.
In response, Munro’s investment team quickly shifted gears. The fund increased its cash position from 16% to 40% in early April. This move came as several stop-loss triggers were activated. Infrastructure, construction, and U.S.-centric stocks were trimmed, while the team capitalized on recent downturns to re-enter select names, including Spotify (NYSE:SPOT), missed during previous rallies.
Loftus Peak’s $1 billion Global Disruption Fund reported a steeper 9.1% drop in March. The fund’s substantial bets on the AI sector, such as holdings in TSMC (NYSE:TSM), Broadcom (NASDAQ:AVGO), and Advantest (TYO:6857), were particularly affected. Still, Loftus is maintaining exposure to these segments, targeting software, cybersecurity, and life sciences as relatively insulated areas.
Despite a lighter allocation to the “Magnificent Seven” versus global benchmarks, Loftus continues to hold positions in Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT), based on their strong financial fundamentals. Nvidia (NASDAQ:NVDA) was reintroduced to the portfolio earlier this year.
Meanwhile, ECP Asset Management took a more cautious route. Its Global Growth Fund declined by 6.1% in March, prompting a portfolio reassessment. Companies highly reliant on advertising revenues, such as Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), and Meta (NASDAQ:META), saw trimmed allocations. The downturn was also leveraged to acquire companies perceived as high-quality but previously overpriced.
Among new additions is Ferrari (NYSE:RACE), which has dropped 15% since March began. ECP views the luxury carmaker as a valuable long-term asset, alongside other premium brands like Hermes (EPA:RMS), especially with a potential U.S. economic slowdown on the horizon.
As quarterly earnings roll in, fund managers expect further clarity on how firms are responding to mounting macroeconomic pressure—potentially reshaping the path for global tech investing in 2025.
