DYMIX Global Macro Futures Strategy: December 2023 Overview

Welcome to the Monthly Summary

Welcome to the monthly summary of the Dynamic Alpha Macro Fund (DYMIX). This December, we continued to capitalize on our dual-strategy approach, which blends the robustness of a fundamental global macro futures strategy with the steady performance of a U.S. equities portfolio. Crafted with a meticulous focus on risk management, we believe, this combination embodies our pursuit of generating “Dynamic Alpha” in the face of volatile market dynamics.

As a result, our overall allocation this month continues with approximately 50% directed towards U.S. Equity ETFs, with the balance invested in a global macro futures strategy and short-term fixed income. With the global macro strategy in play, we’ve achieved long/short exposure across varied and non-correlated markets, from metals like gold and silver to diverse currencies, commodities, and financial indices.

Thank you for being part of the Dynamic Alpha journey. We are committed to keeping you informed and ensuring our strategies align with the ever-evolving financial landscape.  With that in mind, if you have any questions, feel free to contact us at info@DynamicWG.com.


Dynamic Alpha
Macro Fund
S&P 500
Gross Expense Ratio is 1.99%.

* Fund inception was 7/31/2023. Performance is as of 12/31/2023.
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.

Dynamic Alpha Macro Fund PORTFOLIO OVERVIEW


Long: 2 Year Treasury Note, Swiss Franc, and Strategic Equity Holdings
Short: Sugar


Long: Corn, Silver, and Gold
Short: None

Current Positions

Long: 2-year Treasury Notes, Gold, Silver, Swiss Franc, Corn and Strategic Equity Holdings
Short: None

Macro Observations and Market Analysis

Fed Flip-Flop

Something strange just happened. At the December 13, 2023 Fed meeting, chair Powell officially pivoted and flip flopped. He stated that rate cuts are something that “begins to come into view, and is clearly a topic of discussion out in the world and also a discussion for us at our meeting today.”

Yet only two weeks prior on December 1, 2023, Powell said that it was “premature” to speculate on rate cuts. And in recent months he had unequivocally stated that the Fed was not thinking about rate cuts, in somewhat parallel fashion to the “we’re not even thinking about thinking about raising rates” language he had used in mid-2020.

So what gives? The conventional Wall Street playbook on Powell’s psyche is that he wants to be remembered as Volcker and not Arthur Burns. Powell’s tough talk about doing whatever it took to squash inflation seemed like the real deal. This was partly because the “Powell pivot” moniker was slapped on Powell when he intimated that rate rises were on autopilot back in summer 2018, only to ‘pivot’ – literally – after Q4 2018 as the stock market swooned -20% due to the market’s fear that the economy couldn’t handle higher rates and that the Fed had overtightened.

Maybe we need to examine the economic data between Dec 1 and Dec 13, as something ugly must have occurred to get the FOMC to change their messaging so drastically:

None of these data points scream rate cuts are needed. What’s even stranger is that when there were data points in recent months that could have pointed toward rate cuts, Powell demurred and maintained his hawkish stance on keeping interest rates elevated to ensure that inflation was properly beaten.

Yes, real rates will become more restrictive over time, particularly as inflation continues to fall over the course of 2024. But this glide path has been known for several quarters at this point. Why the sudden change of heart by the central bank? Why now?  We will never know for sure.

We might posit another possibility.  The Fed isn’t completely data dependent and is in fact comprised of humans that can be swayed by the pressure of the political machine.  As has historically been the case, economic conditions in an election year can often be pivotal to the party in power.  And whether directly or indirectly, the Fed may prefer the current leadership to that of the challenger.

Implications and Portfolio Construction

The outcome of the FOMC meeting on Dec 13th was the most important and substantive since two years ago when they decided to raise rates after getting caught off-guard by inflation. The Fed has stated that it will slowly cut rates to prevent real rates from doing more damage to the economy. But we believe that they will also cut rates massively if a recession were to occur, and in general will prioritize employment over inflation moving forward (the opposite of the last 30 years).

Here’s our probability tree for the next 12 months:

And here’s how our portfolio is likely to respond:

Let’s now turn to positions we either currently have in the portfolio or are keeping an eye on (in the case of copper).


The best investment view to capitalize on our probability tree above is gold, given that it should do well under scenarios [2] and [3]. It’s one of our largest positions and one that is hated via indifference by the broader investment community. If a recession were to occur next year (our base case), gold will shine as the Fed slashes rates much more than what’s priced in by the forward curve. If the Fed has made a colossal mistake by taking its eye off the inflation fight before inflation is fully brought under control, gold could also rise – unlike in 2022, when gold fell due to a strong dollar and a belief by investors that the Fed would win the battle with inflation quickly, a second wave of inflation would definitively cause inflation expectations to become unanchored.

Gold feels like a win/win as much as buying stocks in 1982 felt like a win/win to those who could see the underlying trends. Back then, at a P/E of 7 you had a massive margin of safety. And you had the catalyst of the Reagan revolution and the Volcker inflation win. And yet hardly anyone was buying equities hand-over-fist in 1982; most were scarred from the previous decade and didn’t believe that anything had changed. It’s the exact same set-up for gold today. No one believes: the gold bugs are scarred from 2011-today where they have lost all their money buying junior miners. And the mainstream hasn’t believed and only paid attention to gold for a couple of years heading into the 2011 top. We think the next 3-5 years will offer up the opportunity of a lifetime.

The image is a chart titled "Gold Is Expensive Relative To Real Yields". On the vertical axis to the left, we have the gold price in U.S. dollars per ounce ranging from 500 to 2250. On the vertical axis to the right, we have percentage values ranging from -1.5% to 3.0%. The horizontal axis at the bottom shows years, starting from 08 (assumed to be 2008) and ending at 24 (assumed to be 2024).
There are two lines on the chart. The first line represents the gold price (labeled as LS for left scale) and is plotted across the years. The second line represents the U.S. 10-year real yields (labeled as RS for right scale, and noted as inverted), which seems to be the nominal yield minus the 10-year Consumer Price Index (CPI) swap rate.
Both lines move in a somewhat correlated fashion with several peaks and troughs, suggesting a relationship between the price of gold and real yields. The chart indicates that as the real yields decrease (moving into the negative percentage territory), the price of gold increases, and this is marked especially after the year 20 (assumed to be 2020) going into 24.
The chart is attributed to "BCQ Research 2023" at the bottom.
This chart is included in the December 2023 summary for the DYMIX Global Macro Futures Strategy.

Source: BCA Research  

The chart on the left is incredible – you rarely see such a wide gap open up between a fundamental input (in this case real interest rates) that have tracked so well to the price of an asset (gold) and where a massive divergence has opened up (the jaws on the right side).  

Yet, we draw the opposite conclusion from the BCA Research team: instead of viewing gold as expensive relative to real yields, we see gold as cheap, reflecting a debasement of currencies that doesn’t show up in either the real rate chart shown here nor in charts that show long-term relationships between CPI and the gold price.          


We closed our long copper position back in August 2023 for risk management purposes, deciding to watch how the market trades and find an ideal re-entry point. Despite a bearish narrative that argues that the end of China’s fixed asset investment boom will crimp copper demand, copper has traded sideways for the past 9 months. If you focused only on demand destruction from China’s property sector, you would think that copper would be at least 25% lower than it is today.

The reality is that green investment demand (electric vehicles, solar panels, etc.) is ramping up so quickly in China that the steep part of the S-curve is upon us (top chart below).

On top of that, inventories are at rock-bottom levels (bottom chart above), exacerbated by recent issues with mine supply from key producing mines in Chile, Panama, and Peru.

Gold and copper are our highest conviction investment ideas on a multi-year horizon. Although both are metals, the beauty of a combined position in both is that while they could certainly move together and have in times past, large moves in each should come under different economic scenarios.

Let’s look at a couple of shorter-term trades.

2-year Treasury notes

We are long 2-year Treasury notes, a trade that has a roughly 9-12 month horizon and lines up with our 60% weight on a hard economic landing (scenario [2] from page 2 above).

This is a tricky trade because of the aggressiveness of the forward Treasury curve. The market is pricing 5-6 cuts of 25 basis points each next year by the Fed. Whereas the Fed itself is only calling for 3 cuts via their projections in their dot plots.

Hence, this trade really only works in a hard landing. We need more cuts than what the market is pricing in for this trade to continue to perform; otherwise, it might make a little money or break even.  Given our views we think it’s a fair bet to make.


We have done well with our agricultural positions over the past year, as long cocoa, long sugar, and most recently short sugar have all chipped in profitably. The best part about these trades is that they are almost completely uncorrelated with the rest of the portfolio, as they are far less swayed by Fed policy and economic cycles.

We are currently long corn, with a 6-9 month trade horizon. There are two key drivers of our view that we believe the market is not currently pricing in: Chinese demand and South American yields.

Demand from China is the real key, as China must re-build a hog herd that was decimated by African swine flu.  This has the potential to increase global demand by 280 million bushels. Concurrently, drought in Brazil due to El Nino is also underappreciated and may reduce yields by up to 2 bushels an acre, leading to a loss of 250 million bushels from global supply/demand balances.

While current U.S. inventories of 2.2 billion bushels seem adequate, increased Chinese demand and reduced yields in Brazil will sway these inventories dramatically. Any winter weather issues in the U.S. that delay spring planting will act as a price accelerant to the upside.

Long Swiss franc

Returning to our investment horizon (views that are longer than 12 months in duration), we have a core view on a multi-year U.S. dollar depreciation. Our thesis relies on the Fed’s inherent doveishness: while they are always apt to talk tough about inflation (as they’ve done in recent quarters), they cave quickly when employment is at risk, and are also hemmed in by massive public debts that must be rolled over. Other developed market central banks are in a similar situation but don’t have the luxury of the world’s reserve currency and hence are slightly more constrained than the Fed.

The political nature of the Fed, which we wrote about on page 1, exacerbates this trend. We believe that the Fed is likely to abuse the power, at the margin, that comes with the dollar being the world’s reserve currency, by maintaining somewhat more negative real rates than peer central banks. Thus we view the dollar as biased toward weakening for years to come. Our current expression for this position is to be long the Swiss franc (CHF), a currency that is colloquially referred to as being historically “harder” than the dollar due to more conservative monetary policy. The Swiss franc has quietly appreciated agaist the dollar for the past 50 years, but has been stuck in a range of 1.0-1.1 vs the dollar for the past 10 years. We think the franc is on the verge of its next major upward move against the dollar.

As we head into 2024, we are more grateful than ever for your support and look forward to navigating what is likely to be very choppy market waters ahead!

As always, we continue to be nimble, and if the data and/or our views change, we can pivot our positioning and find other trades within the 40+ markets we have available. This is also why we maintain a strategic allocation to U.S. equities in our overall fund strategy, balancing a buy-and-hold approach with active global macro long/short positions.


E-mini S&P 500
Nikkei 225
Russell 2000 e-mini
Crude oil
Natural gas
NY Harbor ULSD
RBOB Gasoline


10-year Treasury note
2-year Treasury note
30-Year Treasury
5-year Treasury note
Australian dollar
Brazilian Real
British pound
Canadian dollar
Japanese yen
Mexican peso
New Zealand dollar
Swiss Franc
Feeder cattle
Lean hogs
Live cattle
Soybean meal
Soybean oil
Sugar #11


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.




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