As of Feb 28, 2025, Vision Capital Fund’s Class A shares are up +1.7% YTD compared to the S&P 500’s +1.4%.

Since its inception (Oct 1, 2024), Vision Capital Fund has continued its early outperformance, up +15.1% compared to the S&P 500’s +3.9%.

Broad global stock markets and the US, in particular, saw a significant correction from mid-February onwards, which coincided with deteriorating US short-term sentiment regarding potential Trump trade tariffs on US goods imports from Canada, Mexico, and China. Conversely, Chinese stock markets rallied broadly, primarily driven by growing optimism relative to fundamentals.

Direct impacts from US trade tariffs broadly remain limited to a few of our holdings that sell goods (e.g., Tesla, Lululemon, NVIDIA). The remaining which sell services remain largely less impacted, while the US e-commerce companies like Amazon could have more indirect impact especially from the Chinese third-party sellers.

While Tesla assembles 100% of its cars domestically in the US, it does source ~20-25% of components/parts from Mexico and Canada. Separately, while Lululemon is a Canadian company, only about ~28% of its fabrics are sourced from China, and it has much lower China manufacturing exposure.

Despite the majority of the fund holding’s business fundamentals remaining largely unchanged, Vision Capital Fund experienced its most significant peak drawdown -16.7% thus far (14 Feb-14 Mar 2025). We sent an ad hoc update to our investors on 11 Mar 2025, communicating the attractive opportunity for those who want to add to their existing investments. We will be expecting a larger-than-usual inflow for March 2025 from several new and existing investors, and we are excited to deploy the capital in a highly disciplined manner across numerous attractive opportunities should they continue to persist.

One such opportunity was The Trade Desk. The company saw a considerable price drawdown of -61%, as it missed its 4Q24 guidance for the first time in 33 quarters due to a series of minor execution missteps. CEO Jeff Green owned up, leaned in, took responsibility, and listed a clear action plan to return it to more vigorous execution. In particular, there were some product-related adoption challenges. They laid out clear plans to incorporate more stakeholder feedback and agile product development to simplify and make their latest Kokai product offering more intuitive so users can migrate from the previous one, Solimar. We remain confident that Jeff and his team can overcome these near-term challenges and return the company to execution excellence. We took advantage of the attractive opportunity of the price decline to add to our position in mid-March.

Overall, we continue to believe that most of the stocks in Vision Capital Fund remain reasonably priced, and we are optimistic about their strong long-term business prospects, as we continue to see numerous attractive long-term opportunities.