As the S&P/ASX 200 Index (ASX: XJO) booked its worst start to the year since the pandemic, almost all fund managers delivered negative first-quarter returns.According to The Australian, more than 85% of Australian fund managers ended in negative territory for the three months ending March.Just 17 out of 125 Australian fund managers surveyed were able to deliver positive gains. Collins Street Value Fund, which has been around since 2016, led the pack. The value-oriented fund delivered 3.7% for the quarter (before fees). The worst performance came from Hyperion Australian Growth, which fell 15% over the quarter.

Measuring up

If you were able to hold your portfolio at least flat for the quarter, you outperformed almost all professional Australian fund managers. Those heavily invested in Gold miners or gold-focused ETFs may have landed in this category.The yellow metal has been a standout commodity this year. It recently climbed above US$3,500 after surging nearly 50% over the past year. Enthusiasm for gold has been widespread. Recently, it surpassed the Magnificent 7 as the most crowded Wall Street trade.Consumer staples have also held up well in this environment. For the first quarter, supermarket giant Coles Group Ltd (ASX: COL) rose 5%. Meanwhile, Woolworths Group Ltd (ASX: WOW) declined 3%, outperforming the broader market. Additionally, with ongoing geopolitical conflict, it's no surprise that global defence companies had a strong first quarter. Those invested in the Vaneck Global Defence ETF (ASX: DFND), which holds 68 companies with exposure to the defence industry, saw their investment rise 20% over the quarter.

How should you position your portfolio for this quarter?

Investors find themselves in a different position than they were at the start of the year. We are now several months into Donald Trump's second term, and many stocks are materially cheaper.There are several ways investors can position their portfolios this quarter.Firstly, they could seek out ASX companies that they believe have been oversold. Forager chief investment officer Steve Johnson has named Johns Lyng Group (ASX: JLG) and PWR Holdings (ASX: PWH) as his top stock picks in the technology sector. Both stocks are down more than 50% from their peaks. Another option is to invest based on geography. An increasing number of institutional investors have recently been diversifying away from the US, which has been coined the 'Sell America' trade. ASX investors may wish to reduce or eliminate their exposure to US equities and instead focus on domestic equities only or diversify into European or Asian markets.India has been touted as an alternative manufacturing hub to China, attracting investor interest. As the US-China trade war is far from settled, ASX investors may wish to take a closer look at the Betashares India Quality ETF (ASX: IIND), which tracks 30 high-quality Indian companies. IIND has started the quarter well, rising around 2%.