October 2023 – Teks Alpha Preliminary NAV Systema Fund

Market Overview

October was yet again another eventful month for the financial markets. During the month the equities markets went down around 8% in a 10 day period and then rebounded 5% in two days. Furthermore, it went down 10% from the July highs. Throughout October the SPY posted a return of -2.2% and the YTD is +9.4%. The Nasdaq Composite performed -2.1% (YTD of +31.7%).

The bond market similarly saw weakness in October, leading to a notable steepening of the yield curve. The 2-year Treasury yield saw a slight increase in yields, while 10-year and 30-year yields rose more than 30 basis points. The rise in yields hurt stock sentiment. The market had to adapt to the idea of a Federal Reserve that would maintain higher interest rates for an extended period. This was accompanied by positive economic surprises, such as strong retail sales and robust Q3 GDP. Again, inflation and interest rates (and economic activity) persisted as the dominant themes influencing market activity. Key in this monthly market performance was the Federal Reserve meetings on October 31 and November 1st. The next meetings will be held December 12 and 13.

Investors now believe that there is a much lower probability that the Fed will hike interest rates in the short and medium term. Nevertheless, there seems to be no clear market direction.

Geopolitical risks also came into focus following a terrorist attack on Israel by Hamas on October 7th, leading to the taking of numerous hostages, including citizens from several countries. As we wait to see if the expected major ground invasion leads to a deeper regional conflict, we note the market historically tends to overlook geopolitical events, though a wider conflict could impact energy prices and inflation.


During October the Fund’s preliminary net return was -0.3%, bringing our YTD net performance to +11.1%. We are comfortable with the performance of our model and the enhancements which were put in place during October and prior months. Once again the model demonstrated its resilience to substantial market fluctuations.

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 1.10 -1.50 -0.3 11.1
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 September 2023

Teks Alpha Performance vs Benchmarks since inception (March 2021)

Effective 14.00% 13.39% 6.41%
Annualized 5.48% 4.46% 2.51%
STD Dev 6.90% 17.61% 5.85%
Shape Ratio 0.39 0.10 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.