The Dynamic Alpha Macro Fund aims to outperform its primary benchmark, the S&P 500, 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.”

Primary investments include 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.

PERFORMANCE METRICS

* Fund inception was 7/31/2023. Performance is as of 8/31/2023.
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 1-833-462-6433.

PORTFOLIO OVERVIEW

Contributors

Long Strategic Equities (ETFs), Long Gold, Long 5 Year Treasury Note

Detractors

Short Nasdaq

Current Positions

Long Strategic Equities, Long Gold, Long 5 Year Treasury Note, Short Nasdaq

MACRO OBSERVATIONS

Here’s what we are noticing in real-time:

1. Volatility is dropping. This has been observed with bonds and gold as trading ranges have narrowed for Treasuries. The gold market is similarly entering a narrow range after large moves from mid-2022 – to mid-2023. This behavior is normally observed either at the end of trends or just before new trends emerge.
2. Sentiment in the markets has coalesced around a soft economic landing (low inflation, low unemployment, continued expansion) with expectations for continued strong earnings growth for equities into 2024.

We are paying close attention to point 1, as it has implications for the timing of our core global macro positions. We are actively betting against point 2, viewing a soft landing as the least likely outcome.

By the end of the month, our portfolio was consolidated down to the essence of our medium-term, highest conviction views. We carried only three global macro positions into the back half of the month: long gold, long 5-year Treasury notes, and short Nasdaq 100. As always, we maintain our strategic US equity positions.

Recession coming?

In this business, you must balance staying committed to your views against being hard-headed with no flexibility. We believed the economy would weaken more than it has by now, leading the Fed to cut rates. Yet the lags from monetary policy have been drawn out this cycle due to lingering fiscal policy and the extent to which households and corporations locked in low rates over the past decade. That’s hindsight!

Today, it has become a lonely position to call for a recession. The consensus sees lower inflation with higher yields and a new bull market in equities. We believe this is wrong. A soft landing is the least likely scenario in our mind because either demand will weaken substantially leading to a classic disinflationary recession, or inflation will revert higher due to higher commodity prices and sticky wages. This will likely cause the Fed to continue rate hikes and lead to an even deeper recession shortly thereafter.

We believe we have positioned ourselves to do well under most of the likely scenarios. If the economy manages a soft landing, we’ll pivot our positioning and find other trades that work. This is also why we maintain a strategic allocation to US Equities in our overall fund strategy.

We are months away from knowing how this story will end. The economy and the markets are close to delivering a verdict on whether the long lags of monetary policy have the same impact as they always have had in the past. If the economy ends up running hotter for longer (no recession), that opens the door to sharp moves higher in commodities, particularly oil and copper, but also agricultural markets. We’ll have more to say on those in our next update.

OUR GLOBAL MACRO LONG/SHORT INVESTMENT UNIVERSE

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CONTACT INFORMATION

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 1-833-462-6433 or access online @ https://regdocs.blugiant.com/dynamic-alpha-macro/
• 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, serves as distributor to 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 serves as the subadvisor to the Dynamic Alpha Macro Fund.
• There is no guarantee any investment strategy will generate a profit or prevent a loss. There is no guarantee the funds will achieve their investment objectives.
• Investors cannot invest directly in an index.