March delivered the kind of environment that tests conviction and rewards preparation. After a relatively smooth start to the year, markets were jolted by a trifecta of surprises: hotter-than-expected inflation, shifting expectations around Fed policy, and renewed geopolitical tension. Volatility surged, correlations broke down, and capital rotated violently across sectors and styles.
This Is Where We Shine
Our fund is designed to thrive in periods of dislocation. When markets get noisy, our edge becomes more visible: agile positioning and disciplined risk management allow us to stay on the offensive while others are playing defense.
March underscored a principle we’ve long believed: dislocations are where skill shows up. The volatility was sharp but not unexpected, heightened geopolitical risk converged to drive movements in the markets we concentrate on. In fact, several records have been set in 2025 in regards to the size of the ranges to the upside and downside.
While benchmark indices experienced a spike in realized volatility and negative skew, we were positioned for it as our static portfolio approach again supported the high sharpe nature of our return stream. We navigated this turbulence with a proactive and opportunistic approach.
Built For Chaos
In uncertain markets, when most strategies are getting conservative and joining others on the sidelines, we engage. Our process is built to capitalize on inefficiencies that emerge when emotions drive price action. During March, we saw sharp overreactions in both directions, companies punished indiscriminately, sectors whipsawed by sentiment, and liquidity gaps creating price distortions.
Our process is designed not merely to withstand volatility but to capitalize on it. As liquidity deteriorates and price signals get noisier, behavioral inefficiencies increase. March created exactly that kind of regime shift: correlations spiked temporarily before breaking down, sector leadership rotated violently, and investor positioning (particularly in crowded longs and duration-sensitive growth) was forced to reset.
We entered the month with a static portfolio weighting of 65% market neutral and 35% long volatility. This allows us to manage risk on the market neutral as the drop begins and allows us to harvest the long vol trades, while simultaneously monetizing downside convexity and short alpha.
These are exactly the kinds of moments where the market neutral can be selective and can carefully deploy capital with high conviction and favorable risk/reward.
Outperformance In Volatility
It’s worth noting: our historical performance tends to inflect positively during periods of market stress. We don’t chase beta, we generate alpha from dislocation. March was a textbook case. While broader indices struggled to find direction, our strategy delivered solid gains, driven by a combination of directional optional trades, long put spreads, long VIX butterfly trade and opportunistic entries on the market neutral portfolio.
In particular:
- Our put spreads positioned us for downside volatility, which played out in our favor.
- In Market Neutral, we exploited exploding vol levels and misvalues in the options chain to position very short term trades with compelling risk/reward.
- In the VIX, we continued to stay long into April as vol continues to stay elevated.
Looking Forward
We expect volatility to remain elevated in the coming quarters. The market is still digesting a complex macro backdrop, sticky inflation, uneven growth, and a policy pivot that remains unresolved. This type of environment should continue to favor our active, flexible, and opportunistic approach.
Periods of chaos aren’t something we simply endure they are where we differentiate ourselves.
▶️ Watch our Q1 performance recap webinar here.
We appreciate your continued trust, and look forward to the opportunities ahead.
Disclaimer – The risk of loss in trading commodity interests can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. In some cases, managed commodity accounts are subject to substantial charges for management and advisory fees. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets.
