Details of Monthly returns may be viewed at https://www.hedgeco.net/funds/overview/9896. You will need to create a login in order to view the fund details and monthly returns.
2017 was another successful year for the fund. It followed a similar path as 2016. Performance peaked in September, reaching a year to date return of over 130%. Results fell in October and November, before rebounding slightly in December. We ended the year with returns of 85.6%. While this rate of return is very good (so far the best year since the fund’s inception), we did expect slightly more. While we could have possibly increased our returns by trading our positions, we continue to operate under a buy and hold strategy, which has worked well for us over the last decade. The fund has a CAGR of 32.91% over the last 9 years.
Our largest holding from 2016 continued to drive the majority of our returns. For 2018, we again believe that this holding will outperform and deliver out-sized returns. We anticipate adding to this position on weakness.
Leverage at the fund was considerably reduced in 2017 and we anticipate reducing our leverage to under 3% by early 2018. (As of this writing, leverage is 5%). This will greatly reduce our carrying costs and should not adversely impact our ability to generate gains. We may increase leverage if there is a market correction and we identify buying opportunities.
We will note that while some parts of the overall market are extremely overheated, we also see many companies trading at modest or even low valuations. We believe the a market correction is to be expected, and while it will affect all stocks to some degree, it should not have much impact on our holdings, which are neither momentum stocks or tech related.
Continued prosperity,
Mario Rizzi