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Alternative Market Briefing

The Corona Fighters Report 8: Asset managers that delivered during the downturn

Wednesday, April 15, 2020

Bailey McCann, Opalesque New York:

Amid the current market turmoil, this is our regular report on hedge fund managers who are bucking the trend.

Prior issues: Report 1; Report 2; Report 3; Report 4; Report 5; Report 6, and Report 7.

Daily dynamic defense in the S&P 500

Basking Ridge, NJ based 3D Capital Management exists to protect stock market investors from volatility and intraday declines in the S&P 500.

"Not to state the obvious, but investors who allocate to long-only equity products are guaranteed to lose money when the stock market goes down. I built 3D Capital Management to change that," Eric Dugan declared. "The single best way to protect your equity market risk is by shorting the stock market. Simply put, I wanted to address the risk head-on and generate positive uncorrelated returns with the very market that makes up the most risk in your portfolio. Investors hire some managers to make money for them when the stock market goes up. 3D Capital is the firm you hire to make money for you when the stock market goes down."

3D Defender is a volatility based, intraday, short bias E-mini S&P 500 futures program that is designed to provide long-only stock market investors profitable stock market defense. It can be used as a capital efficient overlay or a stand-alone investment.

3D Defender only invests in the S&P 500, does not carry positions overnight and does not use options. 3D Defender only trades during the day because historically the S&P goes up overnight and down during the day. The fund was up 1.8% in Q1 2020.

3D says it views the world as a dynamic global macro flow chart. 3D's global macro approach relies on logical, persistent, symmetrical relationships that exist between many of the world's global markets. Global price action in stocks, bonds, currencies, energies and metals have historic correlations and relationships that are used to identify recurring patterns, trends and counter trends in the S&P 500.

3D Capital Management will be presenting in our webinar - "The Coronoa Fighters" on April 20th, 2020.

Opportunities in techology names

Technology stocks remain one of the few places you can still find names in the green. Seattle based fund Selcouth Capital Management says the sector remains ripe for big disruptions and still has room to grow.

The transition to 5G technology will support new companies in the tech sector as well as old, and may also provide event driven opportunities. Markets have already seen evidence of new growth in light of covid-19.

Selcouth Capital Fund I was up 0.30% in March on the heels of a +9.87% return in February, when many funds were down. The vehicle, which is a long/short fund focused on technological disruptions, is up 13.06% YTD according to a performance update for investors reviewed by Opalesque.

Shorts win March for this CTA

The Trident Futures Fund LP returned +10.3% net for March 2020. The fund is +9.5% net year to date, according to a performance update reviewed by Opalesque. The fund is a multi-model CTA, which uses proprietary measures of market volatility and risk appetite to add stability and consistency to Trident's portfolio. These models are meant to be especially valuable in times of crisis by either being "short" equity or "long" fixed income, or both.

Trident Capital Management said that all of its models outperformed throughout March. The Risk Regime model shed all of its long equity exposure and focused heavily on long global bond positions that earned Trident more than +1.4 percent gross for the month. The opportunistic Vega model, whose only job is to "short" equity indices, triggered in all four of the equity markets that Trident trades and earned the portfolio +3.6 percent gross in March. "Vega is likely to be in play for months," the performance update noted. In addition, the Engle model, which exploits clustered behavior in markets, was the strongest performer, earning more than +7.8 percent gross in the portfolio. The main markets that contributed to the Engle winnings were agriculture, precious metals, industrial metals, and energy markets.

Going forward, Trident is poised to trade "risk-off" and expects further declines in global stock and commodity markets, as the economic impact of social isolation from the Coronavirus takes a toll on jobs, businesses, and 401Ks.

And others...

California based Dipsea Capital's flagship Dipsea Capital Fund was up 1.24% in March and is up +3.48% through March. The fund is a long/short relative value investment strategy in weekly options on US equity indices and large-cap stocks. Systematic signals are combined with discretionary management to capture risk premia extremes. The fund uses a shorter holding period to help manage risk.

Kerrisdale Capital Management, a value-oriented and special situations fund based in New York, is up 1.0% YTD. The strategy looks for deep value opportunities across sectors.


Disclaimer: This is not investment advice. Opalesque has not verified this information and gives no warranty of accuracy or completeness. Past performance is not indicative of future results. See our Terms & Conditions for more information. ***


- The Corona Fighters: Meet the asset managers that actually delivered during the meltdown

Episode 1: Monday, April 20th, 10 am EST

Opalesque will present several investment managers who will give a succinct presentation on how and why their strategies delivered positive returns and/or protected during the Corona led market meltdown, with Q&A session.

For investors only - register now as seats are limited:

- COVID-19 Survival Training for Family Businesses April 15th, 10 am EST

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