May 2023 – Teks Alpha Preliminary NAV Systema Fund

Market Overview

May was another eventful month for the financial markets, as the Federal Reserve oscillated between potential rate hikes and cuts. The dialogue surrounding the US debt ceiling further fueled volatility, adding uncertainty over the market's direction.

The Fed's next scheduled meeting is scheduled for mid-June, with a possible 25 basis point increase being anticipated. However, in general, economists do not have full conviction regarding additional rate hikes in the future or market performance. Most of them see the market range bound.

Throughout May the SPY posted a +0.5% gain (YTD +9.2%), while the Nasdaq Composite performed +7.3% (YTD +29.7%). Needless to point out, technology stocks were the star performers.

Inflation and interest rates remained the key themes impacting market activity, coupled with the debt ceiling discussions and speculation over whether the US market is poised for a soft landing or a full-blown recession.

As we transition into July, both investors and market participants will be keenly scrutinizing the Federal Reserve's forthcoming policy decisions and economic indicators.


During May the Fund’s net return was +5.2%. This brings the YTD net performance to +13.3%.

We have achieved these returns by gradually switching in February 2023 from digital to traditional assets, i.e. options over US equities. This performance delivered a +3.4 sharpe ratio.

The results of deploying our model on the SPY in our personal account (where we test all trades before executing them in the Fund), are even more impressive. We obtained a +82% total return since December 2022, compared to a +2.5% return of the SPY during the same time period.

We are currently working on new structures and enhancements to our model, with the goal of being mostly market neutral. We are prioritizing stability, and consistent/solid performance, regardless of market conditions.

We are confident that these enhancements will further improve our already solid track record and will deliver outstanding returns. We are also fully committed to exceptional risk management as we grow our assets and team.

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 13.3
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 16.33% 11.30% 3.84%
Annualized 7.64% 5.29% 1.80%
STD Dev 7.25% 18.22% 6.09%
Shape Ratio 0.67 0.14 -0.16
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.