December 2023 – Teks Alpha Preliminary NAV Systema Fund

Market Overview

December was yet again another eventful month for the financial markets.

Throughout December the SPY posted a return of +4.4% and the YTD is +24.3%. The Nasdaq Composite performed +5.5% (YTD of +54.8%), its best performance since 2020.

Easing inflation, a resilient economy and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year. The year ended on a nine-week run of gains, up 15.85% (last seen in January 1994, up 10.26%). As for the Magnificent Seven, they did great this year (with an average total return gain of 104.7%), accounting for 62.2% of the S&P 500’s 26.29% total return (excluding this group, the index return was 9.94% for 2023).

It needs to be pointed out that the SPY was 0.6% shy of an all time high set up in January 2022. These 2023 blockbuster returns erased the losses of the 2022 performance. Bond market investors appeared headed for a third losing year in a row until things turned around starting in late October. Excitement about potential cuts to interest rates sent bond prices soaring and yields dropping. The yield on the 10-year Treasury, which hit 5% in October, stood at 3.9%.

January 2024 will be active, as the U.S. Congress returns and has to address issues on Ukraine, Israel and the U.S. border, while a potential government shutdown looms if a new budget (or stopgap bill) is not reached by Jan. 19, 2024. Adding to the market’s activities is earnings season, starting on Friday, Jan. 12, 2024, with the big banks.

Teks Alpha Performance (%)

2021 1.36 0.79 0.77 0.80 1.51 1.61 1.15 2.56 1.70 0.05 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 5.20 -1.50 0.2 1.10 -1.50 -0.3 0.6 0.35 12.0
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 2023

Teks Alpha Performance vs Benchmarks since inception (March 2021)

Effective 15.08% 26.66% 8.84%
Annualized 5.54% 9.79% 3.25%
STD Dev 6.69% 17.90% 6.31%
Shape Ratio 0.38 0.38 0.04
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.