What’s in this Edition?
- Bottom Line – The Oasis Growth Fund is #1
- Oh boy…Constitutional Upheaval vs the Capital Markets
- Upbeat Market Outlook 2025-26, including the rarely seen ZMB Indicator
- Secrets at the Oasis
Bottom Line
The 2nd quarter of 2025 marked a gain of +12.7% for the Oasis Growth Fund (OGF). And what is better than being Top Quartile (top 25% of your peers)? Being #1, of course! The OGF is the top performing North American equity hedge fund in Canada over the last 2 and 3 years at average annual returns of 22.75% and 24.25%, respectively (Table 1). The OGF performance consistency is founded on owning quality, visionary businesses and deploys 3 additional tiers of methodology to augment and defend these results.
Table 1: Source Fund Library as at June 30, 2025
A Republic for 249 Years
On July 4th, the US celebrated another year of independence from the monarchy of Great Britain. How ironic then is it that during the first 6 months of the new US Administration, all courses of action undertaken by the Oval Office were decreed by Executive Order essentially neutering the US Congress, while also blatantly ignoring orders by the Supreme Court. The US Constitution has essentially been reverted to a monarchy, or worse.
‘Big Beautiful Bill’
This single, centrepiece legislation could also be the new Administration’s last. To date, the preference has been to deploy top-down decisions, including the interpretation of laws, trade negotiations and revenue policies. This bill will invoke $4.5T of tax easements for the wealthy and large business incentives funded by spending cuts to the healthcare (Medicare and Medicaid) and cuts to school aid programs. Over the next few years, the ensuing budget deficits will add nearly $3T to the current $37 Trillion debt pile. Interest on the debt now accounts for 16% of the annual US budget (2nd largest budget allocation after Social Security). And if the US Administration prematurely ends Fed Chairman Powell’s January 2028 contract, this would remove the last remaining ‘adult’ capable of countering these regressive policies. 10-year US Treasury Bond yields rising above 5% would be a clear signal of concern.
Market Resiliency
Despite starting the year firing on all cylinders, the US economy took a nose-dive in April amidst fears of stagnating global trade on the unveiling of America’s “Liberation Day”. It turned out that the steep US Trade Tariffs on 150 countries was essentially a thinly veiled shakedown of foreign governments. To be fair, the US currently imposes the least trade tariffs amongst all G20 countries, so some adjustments wouldn’t be out of order.
In Figure 1, during the 77 days following the inauguration of the new US Administration the stock market slid 17% on nothing more than the threat of tariffs. A full market correction, but not quite a bear market (-20%). Yet, by June 30th, the market had fully recovered. The capital markets are proving to be resilient despite the ongoing assault on the US Constitution.
Figure 1: S&P 500 as at June 30, 2025 Yahoo
One Minute Us Economic Health Check-Up
| US Metrics | Q2 2025 Annualized | Source | Trend |
|---|---|---|---|
| GDP | +2.6% | Atlanta Fed | Stable and healthy growth. |
| Corporate Earnings Outlook | 7% | FactSet | For calendar year 2025, analysts are projecting healthy corporate earnings growth of 9.1% and revenue growth of 5.0%. AI spending is expected to increase across all industries. |
| Inflation | 2.4% (May) | U.S. Bureau of Labor Statistics | Stable. Target is still 2-3%. |
| Shape of the US Yield Curve (1mth/2yr/10yr) | Unique “U-shaped”. | US Treasury Yield Curve | Reflects higher 1-month yields (4.225%), lower 2-year yields (3.789%) and higher 10-year yields (4.295%). Fed is keeping monetary policy tight to curb inflation, yet medium- and longer-term yields are more normalized reflecting a healthy economy beyond the FED’s control. |
| Consumer Confidence | 93.0 (100 is neutral) | Consumer Confidence Index | Weak but could improve with corporate spending. Consumer activity tends to be a lagging indicator. |
| Unemployment Rate | 4.1% (Full employment < 5%). | U.S. Bureau of Labor Statistics | Stable. |
H2 2025 Economic Outlook – Upbeat
As noted from the 1-minute economic health checkup above, the fundamentals look good:
- US Interest rates and inflation remain stable.
- Americans are working. But despite waning consumer confidence, US corporations are spending ‘bigly’ on AI and other infrastructure projects (Chip manufacturing, Robo taxis).
- On a positive note, the “Big Beautiful Bill” will shower the economy with ‘trickle-down’ capital through corporate incentives, tax reductions, and infrastructure projects.
- Weakness in the $USD is a ‘tailwind’ for the earnings of the US global corporations.
- Speculatively, a Bank Rate reduction is highly likely if Powell is replaced by a T-loyalist.
- Copper prices are at record highs. The building of data centers, electric vehicles, and power grids will require far more copper than can be delivered under existing contracts. Demand for copper is a strong indicator of global industrial expansion.
- Despite middle east tensions, oil prices remain stable. Summer driving should boost the American consumer spirits.
Market Momentum Indicator – 100% success rate
But just in case you’d like more proof, consider the history of the Zweig Breadth Thrust Indicator. It has a 100% success rate when the 10-day moving average of advancing stocks on an exchange (ie., NYSE) rises from below 40% to above 61.5% within a 10-day period. This sudden surge in participation from advancing stocks has proven to be a strong bullish signal and has occurred only 18 times since 1945. During the ensuing 12 months, the market has risen on average by 24%. The most recent event was April 24th amid the Trade Tariff debacle (Fig 2).
Figure 2: Source TrendinInvestor
So, what could go wrong?
According to Warren: “Be fearful when others are greedy, and greedy when others are fearful.” The price we pay for that next stock might be too high. At 22x earnings, the S&P 500 forward PE ratio is 29% above it’s long-term average (17x) (Figure 3). Either corporate earnings will accelerate into 2026 or the price we pay for that next stock might be too high. Current market optimism may be put to the test as we enter the next earnings report season.
Figure 3: Source JP Morgan
Secrets at the Oasis
Two major decisions were taken during H1 2025:
- 80% of the $USD exposure was sold to reduce exposure to a weakening greenback. This will likely be maintained while the current administration remains in office.
- For improved defensive purposes, the OGF now uses an equity swing trade. April’s Trade Tariff tantrum instigated the worst bout of market volatility since 1930. This, in turn, triggered defensive Stop Loss trades across the OGF portfolio. Yet, each downturn was followed by an immediate rebound in the market, requiring wholesale reinvestment of each position. Therefore, the decision was to liquidate 15% across all positions. This now provides an additional volatility buffer (supplementary to our time ladder of VIX Call hedges) and creates flexibility to periodically adjust the overall degree of equity exposure.
Disclosures
This investment memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. Fieldhouse Capital Management Inc. (herein “Fieldhouse”) has no duty or obligation to update the information contained herein. Further, Fieldhouse makes no representation, and it should not be assumed, that past investment performance is an indication of future results.
The return of the Oasis Growth Fund is based on monthly total returns of the Fieldhouse Pro Funds Trust – Series O Oasis Growth Fund in Canadian dollars since inception at January 1st, 2020. All returns are time-weighted total returns of the F class, net of fees, and annualized for periods one year or greater.
Fieldhouse Capital Management Inc. is the Investment Fund Manager, Portfolio Manager and trustee of Fieldhouse Pro Funds Trust Advisor Series funds. Fieldhouse Pro Funds Trust funds are subject to management fees, trailing commissions, incentive fees and administration fees. For detailed information on fees see the the Fieldhouse Pro Funds Trust offering memorandum and the Series O offering memorandum supplement or the term sheets.
The Series O Oasis Growth Fund of Fieldhouse Pro Funds Trust was previously Class O of Fieldhouse Pro Funds Inc. The fund changed it’s investment strategy and it’s name from the “Oasis Canadian Growth++ Income Fund” to “Oasis Growth Fund” on January 1st, 2020. The fund NAV was reset to $10 at that time. The funds strategy changed from a Canadian growth and balanced fund to the North American Growth fund described on this page and in the Fieldhouse Pro Funds Trust offering memorandum. Class O of Fieldhouse Pro Funds Trust was previously Class B of Fieldhouse Pro Funds Inc. which had an inception date of April 1 2016. Fieldhouse Pro Funds Inc. converted to Fieldhouse Pro Funds Trust on January 1st, 2022. Historical fund performance for previous strategies is available on request. The Fieldhouse Pro Funds Trust offering memorandum and the Series O offering memorandum supplement contain additional information that should be considered by all investors prior to investing.
This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. There are many important factors to consider when investing and you should seek professional advice that can assess your personal circumstances and risk appetite. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Fieldhouse believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.
This memorandum, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of Fieldhouse.
