Fund Portfolio Commentary

Portfolio Commentary for the Absolute Strategies Fund is provided on a quarterly basis. Additional information can be found within the shareholder letters in the Annual and Semi-Annual Reports. If you are a financial adviser and would like to be added to our e-mail distribution list, contact us by e-mail.

2017 Portfolio Commentary

“…Our strategy aims to buy low and sell high, many times at the same time. This becomes a bit more complicated when almost every asset is overpriced and rises ever higher with no volatility. As such, our strategy has experienced an extensive bear market, as well as one of the worst relative-value investing periods we have seen in our careers. Yet, this is what makes the prospective trough in bear markets so enticing: the investment opportunities can be extensive. For our strategy, opportunity exists in four separate avenues that our portfolio can exploit. First, the opportunity for shorting could prove to be quite profitable. Valuations are some of the most excessive in history, and if the past 20-year central bank effect is any guide we may be looking at some incredible opportunities. Second, we see a significant performance gap between value and overpriced growth that has not been this large since the 1999-2000 bubble top. If value simply starts to outperform growth, our strategy should perform well. Third, volatility is at record lows and may be bottoming. Our strategy is intended to excel with higher volatility and this may enable opportunities to trade around short positions regardless of market levels. Lastly, certain areas of asset markets are already in extensive bear markets, most notably commodities. While we believe there could be some short-term room to the downside, the ratio between the GSCI Commodity Index and the S&P 500 is at levels last seen during the 2000 bubble and the early 1970s…” [read all]