Dear Readers,

Tariffs are an instrument of industrial, trade and economic policy that should be applied carefully, judiciously and as little as is absolutely necessary. Moreover, they should only be applied in terms of World Trade Organisation rules. Their blunt blanket imposition is antithetical to trade, reduces competition, propels inflation and is often very bad for the consumer. The post-World War Two twentieth century has taught us that freer, rule-bound trade is a tide that lifts all ships, enhances efficiency and innovation and is good for the global and local consumer.

While there is a clear political and economic thrust to President Trump’s tariff policy, their method of calculation and adoption are ill-considered. Not only have they damaged global trade relations, but have destabilised financial markets, with Wall Street alone losing $2,5trillion after the ‘Liberation Day’ tariff announcements.

Global financial markets, including the Johannesburg Stock Exchange, suffered their worst losses since the Covid pandemic and the global financial crisis before that. However, President Trump’s 90-day pause saw some encouraging market recovery as well as more sober ratings and company valuations, particularly among the tech heavy counters. Nonetheless, the volatility confidence index has been badly shaken.

What has all this meant for Orion Investment Managers and our clients?

While no share portfolio or fund can ever be immune from market volatility, (after all, this is the nature of the share market), our decades of experience have taught us two important lessons: Never try and time the market, particularly during a crisis and secondly, always adhere to one’s disciplines, philosophy and process.

And so across all OIM companies, irrespective of investment styles, objectives, and benchmarks, each has remained absolutely true to their conviction throughout the market turmoil. This does not mean being passive about our investments and processes, to the contrary, the OIM team and their local and international advisors have been constantly vigilant in managing our clients’ wealth.

Over the past month our Managing Director and Chief Investment Officer has spent time in London and the Channel Islands, as well as with our team of local advisors to ensure that each of the OIM funds is optimally positioned during this period of volatility and beyond.  Our fixed income team was well-positioned for bond market volatility and is showing its true performance excellence under these trying investment conditions.

China notwithstanding, we are encouraged by the more sober response of the tariff hikes and threats from regions such as the EU and Japan and our working assumption is that President Trump is using the tariff wars as a negotiating chip to strengthen the United States rather than being a permanent feature of US economic and trade policy.

While the gold price is reaching new highs, international and local markets are showing signs of recovery after the correction and despite a number of unknowns ahead of us, we are confident that OIM is particularly well-positioned to consistently deliver alpha to our clients.

Enjoy reading this quarter’s OIM Optimum and I look forward to reviewing Q2 with you later in the year.

Yours sincerely,