April 2023 – Teks Alpha Preliminary NAV Systema Fund

Market Overview

April proved to be another eventful month for the financial markets, with the Federal Reserve's policy decision wavering between rate hikes and cuts, and the second largest bank failure in US history adding to the turbulence. Historically, April has been a strong month for US equities, but this year's events have created an uncertain landscape.

Expectations about the Federal Reserve's policy decision shifted throughout April. While the Fed is scheduled to meet again in early May, with the potential outcome of a 25 basis point increase very likely, economists remain uncertain about whether further rate hikes are on the horizon.

April saw the failure of the First Republic National Bank, the second-largest bank failure in US history. This California-based bank, which catered to wealthy clients, surpassed the previous second-largest failure, Silicon Valley Bank. Washington Mutual's collapse in 2008 still stands as the largest bank failure to date.

Throughout April, the SPY posted a +1.6% gain (YTD +9.2%), while the Nasdaq Composite performed +0.5% (YTD +21.4%). The key themes of inflation and interest rates continue to dominate, as well as questions surrounding whether the US market will experience a soft landing or a recession.

As we move into May, the financial landscape remains uncertain. Investors and market participants will be closely monitoring the Federal Reserve's policy decisions, inflation concerns, and the ongoing impact of recent bank failures. With multiple factors in play, the markets are likely to continue experiencing volatility in the coming weeks.


During April, the Fund’s net return was +2.2%. This brings the YTD net performance to +7.8%.

Remarkably, this performance was achieved with significantly lower volatility than the underlying asset class (S&P 500). For example consider the difference in drawdowns: while the S&P 500 experienced a maximum price decline of -9% during the first two weeks of March, the Fund’s drawdown remained below -2%.

The results of deploying our model on the SPY are indeed very impressive. In our personal account (where we test all trades before executing them in the Fund), we had a +65% total return since December 2022, compared to a +1% return of the SPY during the same time period.

We again expect volatile months ahead, as the uncertainty about the future of the global economy might start to get more clarity.

Teks Alpha Performance (%)

2021 1.36 0.79 0.77 0.80 1.51 1.61 1.15 2.56 1.70 12.9
2022 -0.65 1.22 1.22 -0.10 -1.85 -5.7 2.35 -1.61 -0.5 0.33 —3.1 —0.7 -9.0
2023 3.5 0.45 1.45 2.20 7.74
Performance is net of fees. Trading started on March 12, 2021. NAV is calculated quarterly by the Administrator. The next official NAV will be based in December 2022.

Teks Alpha Performance vs Benchmarks since inception (March 2021)

Effective 10.58% 10.79% 3.05%
Annualized 5.15% 5.25% 1.49%
STD Dev 6.64% 18.58% 6.19%
Shape Ratio 0.36 0.13 -0.20
Benchmarks: The HFRI Institutional Equity Hedge Index is a global, equal-weighted index of hedge funds with minimum assets under management of USD $500MM which report to the HFR Database and are open to new investments. The Equity Hedge funds that comprise the index are a subset of the HFRI Institutional Fund Weighted Composite Index. The index is rebalanced on an annual basis.

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Legal Disclaimer

The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. This material is not an offer, solicitation or recommendation to purchase any cryptocurrency, security or to invest in Teks Capital or in Systema Fund PCC. Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of any market, or of any specific investment. Please remember that all investments carry some level of risk, including the potential loss of principal invested all principal. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Please remember that past performance may not be indicative of future results.