Q3 RECAP

The post-Liberation Day recovery continued unabated through the quarter. The positive mood in markets was supported by a sense that the US economy has not lost steam and that the Fed had room to cut rates further.
Most noticeable performance was seen in equities with the S&P rallying 7.9% whilst European stocks (SX5E) posted a positive return of 4.5%. Government bonds markets traded sideways (US 10yr yield rose 1bp to 4.18%) with High Yield outperforming (HYG +2.14% and IHYG +1.3%).
The Aperture Credit Opportunities Fund (APCIIXU) generated +2.97% during the quarter (net of fees).
Portfolio outperformers were mainly US credits, which continued to recover strongly from the April sell-off.
The best performer was AMGENE (Tactical Vehicles) as the new order book grew and investors became more confident about future demand for JLTVs from the US defense department.
AVIANCA (Latam Airlines) also had a very strong quarter, boosted by better-than-expected Q2 results as the sector saw continued strong growth.
Other noticeable positive contributors included DIGICEL (Mobile communications) post a successful refinancing, Loan Depot and Provident Funding (Mortgages) as investors anticipated stronger earnings driven by lower interest rates, and AMC (Cinemas) helped by a strong movie slate in the US.
On the negative side of the ledger, the short position in Anywhere Real Estate squeezed higher on the news of a merger with Compass whilst the long position in Mercer (Pulp Mills) traded down after worse than expected cash burn in the Q2 results.

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