The Anatomy of Active Management
The on-again, off-again uncertainty of tariff policy made us uncomfortable in March.
The hit to business investment and earnings growth seemed like a given, which prompted us to start raising cash. After “Liberation Day” on April 2, we were 25% in cash—the largest cash allocation we’ve seen in the Core Strategy in years.
Here’s how we executed:
In our Q1 2025 letter to clients, we wrote that “there will likely be growing political pressure to achieve trade deals, see results, and shift focus toward other pro-business policies like tax cuts and deregulation….when the focus changes, we think compelling opportunities will surface, and we will have cash ready to put to work.”
As seen in the chart above, we started our cash deployment on April 8 with the purchase of Schwab and Palantir, and since then we’ve added several new names to the Core Strategy. As we write, our cash allocation is down to roughly 4.5%.
In this very volatile and rapidly changing market environment, we did not get every timing decision perfectly correct. No asset manager ever will. But we did make some advantageous and well-timed trades, and we used the volatility to reposition the portfolio in areas of the market we think will be insulated from additional trade upheaval (financials, defense, certain areas of technology, etc.)
In our view, staying passive through volatile, policy-driven environments is not a risk-free choice. Rather than committing to a static buy-and-hold allocation, we believe in remaining tactically active—adjusting exposures when risks emerge, and leaning-in when opportunities arise. Our active approach reflects our commitment to risk management, valuation discipline, and long-term compounding.
It’s what you hire us to do.
Your Personal Financial Portal
We’re pleased to offer all clients access to the Black Diamond® client portal, a secure and intuitive platform that provides a clear, consolidated view of your financial picture. Through the portal, you can track your portfolio’s performance in real time, access quarterly reports and key account documents, and view holdings across multiple custodians—all in one place.
The experience is mobile-friendly and fully customizable, making it easy to stay informed whether you're at home or on the go. The portal also supports secure document sharing and messaging, so you can communicate with us and access important materials with confidence and ease.
If you haven’t yet activated your portal or would like a walkthrough of its features, we’re happy to assist anytime. You can also read our Frequently Asked Questions to learn more.
Notes and Disclaimers
i Important Account Minimum Reminder: Per our management agreement, WestEnd Capital maintains a minimum account size of $500,000. If the Rheinmetall trade was not executed in your account, it is likely due to your account not meeting this minimum threshold. We remain committed to providing tailored guidance and appropriate opportunities based on each client’s individual portfolio. If you have any questions about your account or how this may apply to you, please contact us.
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This newsletter has been prepared solely for the client to whom it was directed and may not be sent to any other party. Further, it contains highly confidential and proprietary information and trade secrets that are of independent, economic value to us. Any disclosure of this information could cause us competitive harm. By accepting this newsletter, you agree to keep strictly confidential all of its contents and may not reproduce, distribute, share or publish in any manner without our prior written consent. This letter is not, and is not intended to be, an advertisement within the meaning of Advisers Act Rule 206(4)-1.
Further, a substantial part of this newsletter contains forward-looking statements within the meaning of the federal securities laws, including in particular statements appearing on page 3. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. For example, forward-looking statements may predict future economic performance, describe plans and objectives of management for future operations and make projections of revenue, investment returns or other financial items. A prospective investor can generally identify forward-looking statements as statements containing the words “will,” “believe,” “expect,” “anticipate,” “intend,” “contemplate,” “estimate,” “assume” or other similar expressions. Such forward-looking statements are inherently uncertain, because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors that are beyond our control. Actual results could and likely will differ, sometimes materially, from those projected or anticipated. We are not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statements regarding past trends as a representation those trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.
In preparing this newsletter, we have relied upon information provided by the custodian(s) and other third-party sources we believe to be reliable and accurate.
Past performance does not guarantee future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable. Changes in investment strategies, contributions or withdrawals, and economic and market conditions will materially alter the performance of your account. All investing involves risk of loss including the possible loss of all amounts invested.
Index Disclaimers
The benchmarks referenced are included to reflect the general trend of the markets during the periods indicated and are not intended to imply that the underlying returns were comparable to the market indices either in composition or element of risk. There are significant differences between client accounts and the indices herein including, but not limited to, risk profile, liquidity, volatility, and asset composition.
The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks chosen for market size, liquidity and broad industry group representation within the U.S. economy. Index returns represent gross returns, and are provided to represent the investment environment during the time periods shown and are not covered by the report of the independent verifiers.
