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  • Sean Rapley

March 2022 - Luke's Global Fund Performance Update

Luke's Global Fund achieved a return of -7.9% (in constant currency) return over the month of March, and a -12.7% return to date for FY22 on a constant currency basis Our International Benchmark, the S & P 500, returned 3.6% for the month of March, and the benchmark returned 5.4% to date this financial year.

Our portfolio as at March 31, 2022 is outlined in Figure 1 below:

Figure 1- Portfolio Pie Chart


Our contribution analysis for the month of March is outlined in Figure 2 below:

Figure 2 – Contribution Analysis Bar Chart

The portfolio was down across the board, and across all macro regimes. The poor performance this month can be attributed to the deterioration of the inflation outlook, impacting long dated bonds, and goldilocks / reflation exposures due to the bond / equities inverse correlation breaks down during periods of high inflation.

Review of Portfolio Breakdown

The breakdown of the portfolio is outlined in Figure 3 below. We further reduced our exposure to Goldilocks / Reflation holdings to a 25% position size, and we plan to retain this position size until the macro environment transitions to a reflation / goldilocks regime.

Figure 3 – Portfolio Macro Segment Pie Chart


March was a very active trading month, as we unwound our exposure to long dated US treasuries and Goldilocks / Reflation exposures. Our exposures have ben predominantly based on 42Macro guidance for deflation / inflation exposures.

Some of our trading activity included:

1) We reduced our holdings in Upstart, and Crowdstrike.

2) We sold out of Zoominfo.

3) We sold out of most of our long duration US treasuries exposures, selling ZROZ, VGLT, and EDV.

4) We sold out of PINK ETF (Healthcare ETF).

5) We sold out of KS Global Carbon Strategy ETF.

6) We added USO (oil exposure), which replaced our Carbon ETF as an inflation hedge.


March saw ongoing supply chain issues worsen, with energy, and food supply chains disrupted by the Ukraine war. The deteriorating outlook for inflation significantly impacted our portfolio, which was heavily skewed towards a deflationary exposure.

We note the majority of our inflation regime exposure is via Luke' s Fund, and as a result, we expect Luke's Global Fund will continue to be relatively underperforming in the short term.


The March results highlighted how quickly the macro environment can change, and we made some mistakes, including building our deflation exposures too early in the economic cycle.

If you have any opinions on the companies we hold, or would like to know more about our investments, we would love to hear your feedback.



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1 Comment

Campbell Duncan
Apr 29, 2022

Thanks for the update Sean.

Do you have any thoughts surrounding SE and their continued headwinds?

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