WHG's commentary for the month ended August 31, 2025.
Performance
- August: +9.3%
- YTD: +30.2%
- ITD: +99.0%
Monthly Commentary
August was defined by a rotation and repricing in US interest rates. A weaker payroll report, with downward revisions, increased the likelihood of rate cuts — a view reinforced by Powell at Jackson Hole — and was followed by renewed pressure from Trump on the Fed. The US dollar weakened, while gold and silver rallied. Equity markets advanced in both the US and China, supported in Asia by anti-involution policies, stimulus measures, and the ongoing AI boom. In this environment, crowded trades underperformed, and hedge funds faced headwinds, while previously underallocated themes — such as small caps and China — led gains.
Positive Highlights:
- AI: Positive contribution from a position in an Asia-based company with significant AI exposure (semiconductors, infrastructure, software), as the market increasingly recognizes it as an AI play and the re-rating remains underway.
- China Tech: Companies in the Chinese semiconductor supply chain benefited from new government guidelines requiring at least 50% of GPUs in data centers to be locally sourced. The measures also discouraged the use of Nvidia's H20 chips for AI training, favoring domestic manufacturers and system integrators.
- Precious Metals: Gold and silver miners delivered record levels of cash flow, supported by high commodity prices and controlled costs. Silver was the main highlight, rising over 6%, driven by a tight physical market and continued ETF inflows.
- Crypto Equities: Bitcoin mining stocks performed well, supported by strong quarterly results, energy capacity expansion announcements, and new bilateral contracts for data center operations.
- Small Caps: Our long position in the Russell and small-cap equities benefited from benign growth data, lower-than-expected inflation, and Powell’s dovish tone at Jackson Hole, all of which reinforced expectations of rate cuts.
Negative Highlights:
- Portfolio Hedges: In a month of broadly positive market returns, we saw losses across the indices used as hedges. These positions are designed to reduce net exposure and provide flexibility to increase sizing in high-conviction themes.
- AI Winners Reversal: A rotation into previously lagging themes, combined with weaker-than-expected earnings, led to a correction in names seen as AI winners — stocks that had delivered strong year-to-date performance.
As always, we’re here to support your investment journey and address any questions you may have about your portfolio or the broader market landscape. Please don’t hesitate to get in touch.
Thank you for your continued trust in us.
Best regards,
WHG | Wealth High Governance
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