July 2023 – Teks Alpha Preliminary NAV Systema Fund

Market Overview

In July the prevailing market sentiment was distinctly favorable, underscored by a notable reduction in inflation within developed markets and steadfast GDP statistics. These dynamics provided confidence in a gradual economic stabilization, leading to comprehensive appreciation across diverse asset classes and regions.

The Federal Reserve increased its principal policy rate by 25 basis points (bps), elevating the federal funds rate to a range of 5.25%-5.50%, consistent with market anticipations. The verbiage of the Federal Open Market Committee's proclamation remained largely unaltered from its previous gathering, preserving the term “additional policy firming may be appropriate”.

The SPY showcased a robust growth of +3.2% recording a YTD of +21.9%, the Nasdaq Composite performed +3.86% (YTD +35.5%), its best first half-year performance since 1983.

Beyond the realm of AI-centric equities, the market performance appears subdued. This can be interpreted in a dual manner: either the increasing concentration of returns signifies heightened risk, or the majority of stocks, having not shared in the gains, possess latent potential for growth. Our perspective largely resonates with the former supposition.

We believe that the risk is escalating due to the limited market diversity and looming economic challenges.


During July the Fund’s preliminary net return was +0.2%, bringing the YTD net performance to +11.87%.

In July, there was a strategic reshuffling of the portfolio, enhancing its outlook for the latter half of the year. Adopting a market-neutral stance posed challenges, especially when markets deviated by 3 standard deviations. However, this proved beneficial, enabling our models to refine at a minimal cost and bolster the resilience of our strategy.

We are confident that the recent portfolio repositioning will yield favorable results in the upcoming months. Given the aggressive market fluctuations observed over the past two months, we are intensifying our efforts to hedge against tail risk. As we undertake this, we exercise utmost caution to ensure that the potential profitability of the portfolio remains unaffected.

We remain committed to our objective of producing a net monthly return of +3% to +4% over a sustained period, factoring in the implications of time decay.

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 5.20 -1.50 0.2 11.87
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 16.08% 19.96% 7.68%
Annualized 6.73% 8.35% 3.22%
STD Dev 7.01% 17.75% 5.95%
Shape Ratio 0.57 0.32 0.08
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.