Dynamic Alpha Macro Fund (DYMIX): August 2025 Overview

Welcome to the Monthly Summary

The Dynamic Alpha Macro Fund aims to outperform its benchmark by employing a dual-strategy approach. The fund combines a fundamental global macro strategy with a balanced portfolio of U.S. equities. This blend of non-correlated assets is designed to manage risk and generate what we refer to as “Dynamic Alpha.”

The portfolio is comprised of U.S. Equity ETFs, a global macro futures strategy, and short-term fixed income. The global macro strategy provides long/short exposure to over 40 diverse and non-correlated markets, including currencies, metals, energy, commodities, and financial indices.

We are committed to our shareholders, keeping you informed and ensuring our strategies align with the ever-evolving financial landscape. If you have any questions, feel free to contact us at info@DynamicWG.com.

peRFORMANCE METRICS

* Gross Expense Ratio is 2.00%.  Net Expense Ratio is 1.98%.
* Fund inception was 7/31/2023.
Performance data shown represents past performance and is not a guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Updated performance information and daily net asset value per share (“NAV”) is available at no cost by calling toll-free 1-833-462-6344.

Dynamic Alpha Macro Fund PORTFOLIO OVERVIEW

Contributors                            

• Long: 2-Year Treasury, British Pound, Gold, Silver, Copper, Strategic Equities      
• Short: None                                    

Detractors                                

• Long: Oil, Cotton                                              
• Short: Coffee                                 

Current Positions (as of 8/31/2025)                                   

• Long: 2-Year Treasury, British Pound, Gold, Silver, Cotton, Strategic Equities       

• Short: Coffee

Macro Observations and Market Analysis

Cotton

“Cotton on the roadside, cotton in the ditch; we all picked the cotton, but we never got rich” – Song of the South

The quote above from a well-known song by Bob McDill tells the story of a cotton farming family during the Great Depression. Although the lyrics reflect hardship during the 1930s, the truth is that cotton has been a tough market to make money in as a grower for most of the last century.

The chart at the top of page 2 shows the price of cotton from the late 1950s to the present. Outside of two price spikes in 2010/2011 and in 2021/2022, the cotton price has averaged roughly 70 cents per pound – unchanged in nominal terms for decades.

In recent years the price has dropped toward the lower end of the range it has historically traded in. The boom in demand for goods (clothing) driven by Covid stimulus in 2020 and 2021 has faded. Yields and weather have been favorable: as a globally grown crop, U.S. produced cotton (the futures contract that we trade only allows for delivery of U.S. origin cotton) competes with cotton sourced elsewhere.

Starting in the 1960s, cotton faced increased pressure from synthetic fibers such as polyester – these fibers are produced with petroleum as an input, and as oil prices have declined in recent years, additional downward pressure has been exerted on cotton as materials that compete with cotton clothing have become cheaper to produce.

Cotton: long-term no nominal price gains

After the price boomed during Covid, declining demand and decent growing weather has pushed the price back down. Yet despite continued bearish news (poor demand in China; lack of weather-related stress), the price has “dug in”, grinding along in a quiet 12-month base:

Cotton: short-term 12-month basing after Covid boom/bust

Fundamentals are shifting:

1. Clothing inventories in the U.S. are low, as many retailers front-loaded their purchases in an attempt to get ahead of tariffs. We are likely to see a restocking cycle now that many of those inventories have been worked off.
2. Planted acreage of  cotton  in the U.S. has declined rapidly due to prolonged periods of low prices. Despite low grain prices, many farmers have shifted acres from cotton to soybeans.   Across all regions, we are seeing total acreage planted fall to its lowest level since 2015, a time that preceded a 50% increase in the price (from 63 to 95 cents).  
3. The world’s leading producer of cotton, India, just increased the MSP (Minimum Support Price) of cotton for the 2025-2026 season, setting a floor price that, when combined with insurance and freight charges, will cost consumers roughly $0.94/lb, making Indian cotton less competitive with domestic, U.S. cotton.

We believe we are transitioning to a renewed bull market, and in August opened a long position in cotton futures.

Positioning in August

Many of the themes that impaired our performance in July reversed in August, reasserting fundamental trends that we have full confidence in.

Gold

The gold bull market that kicked off in March of 2024 shows no sign of slowing down. Most large allocators are fully invested in technology stocks, private equity, and private credit; no one has a meaningful allocation to gold. Real interest rates are about to decline, with political pressure on the Fed, and with trust in the rule of law in the U.S. weakened, flows into gold should continue.

Silver

In years past, we would have lumped silver in with gold as a higher-octane version of the primary precious metal. Silver still retains much of its value as a precious metal, but its role is shifting. Whereas 10 years ago perhaps 30% of silver’s demand came from industrial uses, today that number is closer to 40% and heading toward 50% in the next few years. The reason: solar photovoltaic panels are gobbling up increasing amounts of the metal.

2-year Treasuries

The Fed has just telegraphed an interest rate cut in September. That’s priced in. What’s not priced in is a rapid deterioration in the frozen U.S. labor market that coincides with an economic downturn and a much sharper set of interest rate cuts; we have been early to this theme but feel that we are on the cusp of a recession-driven interest rate cutting cycle.

Short U.S. dollar (via long British pound)

Sentiment on the U.K. economy is unrelentingly bearish. Newspaper headlines highlight a migrant crisis, stagnant GDP growth, and continued negative repercussions from the 2016 Brexit vote. We see a diverse economy with better separation of political and economic levers of power than stateside, alongside an undervalued currency. The pound can continue to rally.

Long cotton / short coffee

Although these two soft commodities have little in common with each other and hence should not be viewed as a spread trade, we are long cheaper cotton and short expensive coffee, essentially playing each from a fundamental value perspective. We have elucidated our cotton thesis above and have reinstated our coffee short, after capturing the first leg of the coffee bear market earlier this year – the coffee market rallied in recent weeks offering a second chance to put this trade on. Large speculators remain heavily short cotton and moderately long coffee, offering fuel for rallies in the former and long liquidation of existing positions in the latter. 

OUR dynamic alpha macro fund LONG/SHORT INVESTMENT UNIVERSE

The list above is not all inclusive.

CONTACT INFORMATION for the Dynamic Alpha Macro Fund

If you’re an advisor or investor interested in learning more about the Dynamic Alpha Macro Fund, you can get in touch through the “Contact Us” page on their website at https://dynamicalphafunds.com/contact-us/. Alternatively, you can directly email your inquiries to info@dynamicalphafunds.com.

IMPORTANT RISK INFORMATION

Disclaimers:

• An investor should consider the investment objectives, risks, charges, and expenses of the Dynamic Alpha Macro Fund carefully before investing. The Fund and summary prospectus contain this and other information about the Fund and should be read carefully before investing. To obtain a prospectus, please call 1-833-462-6344 or access online at https://regdocs.blugiant.com/dynamic-alpha-macro/
• Expense ratios shown reflect gross/net fund operating expenses including acquired fund fees and expenses as per the Fund’s prospectus dated November 1, 2024. The net expense ratio reflects a contractual fee waiver/reimbursement that is in place until 10/31/2025. Absent such waiver, performance and returns would have been lower. The Adviser may discontinue the waiver after the expiration date. Investors should review the Fund’s prospectus for a complete discussion of fees and expenses.
• All investment strategies and investments involve the risk of loss. Nothing within this communication constitutes financial, legal, tax, or other advice, nor should any investment or strategy be undertaken without fully understanding all the risks associated with such an investment or strategy.
• The views, opinions, or advice contained above are solely those of the author and do not necessarily reflect those of Ceros Financial Services LLC or its affiliates. The strategies and/or investments referenced may not be appropriate for all investors, as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
• Ceros Financial Services, Inc., member FINRA/SIPC, distributes the funds and is a commonly held affiliate of Advisors Preferred. Advisors Preferred and Ceros are not affiliated with the funds’ subadvisor, Dynamic Wealth Group, which serves as the subadvisor to the Dynamic Alpha Macro Fund.
• Any performance figures reported are historical and should not be taken as an indication of future performance. Investment in the financial markets involves risk, and there is always the potential of losing money when investing in securities.
• The views expressed about market trends, including opinions on bonds, equities, gold, crude oil, or any other market, are based on current market conditions and are subject to change without notice. These views should not be construed as a recommendation for any specific investment or financial strategy.
• Discussions of supply and demand, including historical context and future forecasts, involve estimates and assumptions subject to significant uncertainties. Actual future conditions (including oil supply, demand, and prices) may vary markedly from the analysis presented.
• The commentary regarding our trading approach and investment views, including short-term trading outcomes and long-term market predictions, represents the opinions of our investment team at the time of writing. Our commentary does not promise or guarantee future investment strategies or performance.
• Our economic outlook, including any predictions of economic conditions or their impact on investments, is speculative and should not be relied upon for making investment decisions. Economic conditions are complex and can be affected by various unforeseen factors.
• Comments made on third-party sites are the views of the individuals and do not represent the opinions or recommendations of Ceros. Ceros does not monitor or endorse these comments.
• Dynamic Wealth Group (“Dynamic”) is an SEC-registered investment adviser. SEC registration does not constitute an endorsement of Dynamic by the SEC, nor does it indicate that Dynamic has attained a particular level of skill or ability. This material prepared by Dynamic is for informational purposes only. It is not intended to substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product.
• Opinions expressed by Dynamic are based on economic or market conditions when this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated.
• Facts presented have been obtained from sources believed to be reliable. Dynamic, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.
• Any reference to an index is included for illustrative purposes only, as an index is not a security in which an investment can be made. Indices are unmanaged vehicles that serve as market indicators and do not account for the deduction of management fees and/or transaction costs generally associated with investable products. Past performance is no guarantee of future results. Actual returns may be lower.
• S&P 500 Total Return Index: The Standard and Poor’s 500 is a capitalization-weighted index of 500 stocks representing all domestic industry groups. S&P500TR assumes reinvestment of any dividends.
• S&P Target Risk Growth Index: The S&P Target Risk Growth Index is designed to measure the performance of equity allocations, while seeking to provide limited fixed income exposure to diversify risk.
• © 2025 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
• Fund Ranking Disclosure: As of 12/31/24, the fund was ranked #1 in the Morningstar Macro Trading category out of 60 funds for the 1-year period based on total returns. Rankings are based on historical performance and are subject to change.