Averdas Productivity Leaders Funds

US equities rebounded strongly in April, recovering a meaningful portion of March’s drawdown. The rally was broad-based but led by large caps, with the US 1500 posting particularly strong short-term gains. This recovery appears more technical than fundamental, driven by stabilization in geopolitical headlines and a pullback in energy prices. However, dispersion beneath the surface remained elevated, and longer-term risk-adjusted metrics continue to favor the broader US 1500 over the more concentrated US 500. Despite the rebound, year-to-date performance remains mixed, particularly for the US 500, which is still negative.

Europe: European equities participated in the global rebound but lagged the US on a short-term basis (+4.4% MoM). Encouragingly, Europe remains positive year-to-date and continues to exhibit strong risk-adjusted performance, with a high Information Ratio and relatively low drawdowns compared to other regions. The recovery was supported by easing energy concerns and more stable rate expectations, although structural growth concerns and sensitivity to global demand continue to cap upside relative to the US.

Asian equities saw the strongest rebound across regions, sharply reversing March weakness. The recovery reflects both relief around energy supply concerns and renewed optimism around regional growth. This is also evident in the strong 1-year returns. However, Asia remains the most volatile region, with elevated drawdowns and weaker Sharpe ratios, highlighting that the rebound comes with significantly higher risk. Performance continues to be highly sensitive to external factors, particularly energy and trade dynamics.

Emerging markets ex-Asia also rebounded meaningfully, with particularly strong year-to-date and 1-year returns. This segment stands out for its high upside capture and relatively strong Information Ratio, suggesting effective participation in market recoveries. However, it remains the highest-risk segment overall, with the largest drawdowns and volatility. Performance continues to be driven by commodity exposure and global risk sentiment.

Global equities recovered in April, though the rebound was more moderate compared to regional leaders. While short-term returns improved, both year-to-date and 1-year figures remain subdued, indicating that the global aggregate continues to lag more dynamic regions. Risk metrics remain relatively balanced, with lower downside capture providing some resilience, but upside participation has been more limited.

Overall: April marked a partial normalization following March’s sharp risk-off environment. The easing of geopolitical tensions and stabilization in energy markets allowed equities to recover, with higher-beta regions leading the rebound. However, the recovery appears uneven and somewhat fragile. Dispersion across regions remains high, with Asia and emerging markets delivering strong upside at the cost of significantly higher volatility, while developed markets offer more stable risk-adjusted profiles. Markets remain sensitive to macro and geopolitical developments, and the balance between recovery momentum and underlying uncertainty continues to define the investment landscape.