We invest in a diversified pool of uncorrelated funds with the aim of providing stable capital appreciation and a low correlation to traditional stock and fixed income markets which can be particularly valuable in times of market stress. A monthly manager report landed in my inbox. It is one of our macro funds that has been added to some client allocations recently.
Here is a section:
Conservatism was an appropriate strategy as uncertain contradictions continued to abound in various markets. We were bullish on Chinese markets but tampered against the mainstream media intensifying an extreme political narrative against China. We were bearish on US markets but the capital flow back to the dollar continued to support stocks. We continue to be on the lookout to deploy more risk capital.
The US Federal Reserve kept interest rates unchanged at 5.5%, indicating that rates will likely stay higher for longer until inflation cools down sustainably. US stocks tumbled, led by Big Tech on worries around weak demand, flagging consumer confidence, and rising treasury yields.
Both S&P and Nasdaq index futures were down about -4.3%. Our short S&P and Nasdaq futures portfolio contributed the most returns this month with gains of +1.27%. We traded US T-bonds nimbly from the long side and made marginal gains.
Japan’s Nikkei index experienced two-way swings which favored our active trading approach. We traded Nikkei from the short side and made gains of +0.60%. In forex, our long Singapore dollar against US dollar exposure incurred a loss of -0.53%. The US dollar continued its strong ascent into October.