December Letter: “Crowded Trades, Thin Air”

December closed the year with a familiar contradiction: headline markets still looked strong on a full-year basis, yet liquidity and positioning turned increasingly unforgiving into year-end. The S&P 500 finished 2025 up roughly 16%, and the Nasdaq was up roughly 20%, while Indonesia’s JCI held near record highs. But beneath that surface, U.S. equities softened modestly, and crypto saw a sharper drawdown as thin holiday liquidity met hawkish policy nuance.

Across Aknia’s strategies, dispersion was driven less by “macro direction” and more by liquidity conditions:

• Nusantara Opportunity Fund: Indonesia continued to benefit from a resilient domestic bid and strong turnover, but valuations are no longer cheap, and the rupiah remains a constraint. Our stance stays constructive, but we selectively lean into companies with pricing power and minimal USD liabilities while treating FX as a first-order risk.

• Frontier Founders Fund: A modest year-end dip reflected rotation away from crowded mega-cap AI exposure and into other areas of the market. We trimmed into strength, kept hedges active, and remained focused on quality and balance-sheet durability as 2026 expectations became more demanding.

• Chain Catalyst Fund: Crypto experienced a liquidity vacuum. Bitcoin fell about 6.4% in December, Ethereum 7.8%, and the total crypto market cap contracted sharply, with ETF selling pressure and thin liquidity worsening the move. We reduced altcoin risk early, raised stablecoin/cash, and used volatility opportunistically (including limited covered call writing) to smooth outcomes without using leverage.

  
  

Policy delivered mixed signals across regions. The Federal Reserve cut 25 bps to 3.50%–3.75%, but paired the move with a more cautious 2026 path, while Bank Indonesia held at 4.75% with FX stability as a priority. A surprise Bank of Japan hike unwound yen carry positioning and amplified cross-asset sensitivity. In short: crowded trades don’t need bad fundamentals to break, they just need air pockets.

You can read the full commentary and detailed performance breakdown in the Aknia December 2025 Investor Letter.

For investors wishing to learn more about Aknia’s strategies or explore fund subscriptions, further information is available at www.akniaim.com or by contacting yosua@akniaim.com or kevin@akniaim.com