In the first quarter of 2026, global equities experienced a significant decline, largely attributed to heightened geopolitical tensions in the Middle East. This instability led to a sharp increase in oil prices during March, fueling fears of inflation and creating a challenging investment landscape. Amidst this backdrop, the Global Macro strategy proved to be the most resilient and profitable, delivering substantial gains. The Relative Value strategy also played a crucial role in bolstering overall returns. Conversely, the Strategic Overlay and Long Short Equity strategies faced considerable headwinds, detracting from the fund's performance during this turbulent period.

The first quarter of 2026 was marked by considerable market upheaval. The ongoing conflict in the Middle East cast a long shadow over global financial markets, contributing to widespread declines in equity values. Investor sentiment became increasingly cautious as the geopolitical situation deteriorated. A notable development was the sharp rise in oil prices in March, which exacerbated existing concerns about inflationary pressures. This environment demanded careful navigation and highlighted the effectiveness of certain strategies over others.

During this period, the Global Macro strategy demonstrated its strength by capitalizing on broad economic trends and policy shifts, proving to be the primary driver of positive returns. Its flexible approach allowed it to adapt swiftly to the evolving market conditions. The Relative Value strategy also performed commendably, identifying and exploiting discrepancies in asset pricing to generate alpha. However, other strategies encountered difficulties. The Strategic Overlay strategy, designed to mitigate risks and enhance returns, unexpectedly weighed on performance, suggesting that even carefully constructed hedges can struggle in extreme market conditions. Similarly, the Long Short Equity strategy, which typically aims to profit from both rising and falling stock prices, faced challenges in this volatile environment, resulting in a drag on the fund's overall results.

The market conditions of Q1 2026 underscore the necessity for adaptability and strategic positioning. The combination of geopolitical conflict and inflationary pressures created a complex and unpredictable environment for investors. While some strategies thrived by accurately anticipating and reacting to these shifts, others struggled to maintain their footing. This period serves as a crucial reminder of the importance of robust risk management and diversified investment approaches in navigating global market uncertainties.