DYMIX Global Macro Futures Strategy: January 2024 Overview

Welcome to the Monthly Summary

Welcome to the monthly summary of the Dynamic Alpha Macro Fund (DYMIX). This month, 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.


Performance as of 1/31/2024NAVOne
Dynamic Alpha
Macro Fund
S&P 500

Performance as of 12/31/2023NAVOne
Dynamic Alpha
Macro Fund
S&P 500
Gross Expense Ratio is 1.99%.

* 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 1-833-462-6433.

Dynamic Alpha Macro Fund PORTFOLIO OVERVIEW


Long: Copper and Strategic Equity Holdings
Short: None


Long: Corn, Silver, Gold, 2 Year Treasury Note, Swiss Franc Silver, Yen and Gold
Short: Cocoa

Current Positions

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

Macro Observations and Market Analysis

Portfolio in January

Our Global Macro portfolio struggled in January, as our core themes (long gold, long 2-year notes, short dollar (via long Yen & Swiss Franc), and long copper) re-traced gains that they had delivered heading into year-end 2023. This is completely normal, and from price action that we observe in the charts of these holdings, nothing is astray or unusual. We continue to hold these trades with conviction.

We also took losses in long corn and short cocoa trades that hit our risk limits . These are uncorrelated trades that still look interesting to us fundamentally and technically, and we could look to reinitiate one or both in the months ahead.

Trying to find win/win

Within the global macro side of the fund, we remain in the hard landing camp – we believe the economic cycle has been drawn out due to the excessive fiscal stimulus passed in 2020 and 2021 along with the fact that the economy was less interest rate sensitive than in previous cycles, as both households and corporates termed out much of their debt. At this point, the majority believe that we are headed for a soft landing.

Under the economy’s hood, jobs are being created predominantly in only three sectors – healthcare, government, and leisure/hospitality – while finance, technology, and other high paying W-2 jobs are becoming very scarce. Unemployment rates may still be low at the aggregate level, but the slowdown is real, and doesn’t normally end in a soft landing with interest rates 200 basis points above where inflation is trending.

Our long position in 2-year Treasury futures should pay off should a hard landing occur. The Fed could cut rates by far more than the 5 interest rate cuts currently priced into the forward curve. In a hard landing, the Fed could cut 12-13 times, sending front-end rates down toward 2%. This is in-line with every economic recession in the post-WWII period. Our position in gold should also do well, as gold will likely accelerate above the trading range that it has been bounded within for the past three years.

But importantly, we need to plan for being completely wrong about the above, while holding it as our base case for our investment purposes. What if the economy were to reaccelerate instead? What are we going to do if we’re wrong about our core, hard landing scenario?

Here’s what we don’t want to do in that scenario: chase equity markets higher. Equities are very richly valued, to the point where you need them to outperform aggressive earnings expectations for 2024 and 2025 to make money going forward. You also need “trees to grow to the sky”, as you need Apple, Microsoft, and a few other stocks to continue to grow from $3T market cap companies into $4T market cap companies – a tall order considering these stocks are already at least 2x as expensive as they were in 2015 when they were actual growth stocks.

What to do? Buy what’s undervalued and primed to perform well in an environment of strong global growth: buy commodities, especially copper.

Copper deep dive

Most commodity markets, across the oil complex, grains, and metals, have built bases and look ready to move higher pending a catalyst. The market that we feel most strongly about is copper, where we have re-initiated a long position.

Copper is perhaps the cleanest way to play the green energy transition globally. You could buy electric vehicle companies’ stock, but those come with many variables impacting their price, including execution risk, consumer taste and many are trading at high valuations.  Or you could look to buy mining companies that focus on the critical ingredients that go into a battery: lithium and cobalt. We wouldn’t: not only is there an oversupply of these minerals, but battery technology itself is changing, as the mix between lithium, cobalt, sodium, phosphate, and iron is vastly different than what was projected as recently as a couple of years ago.

Copper is different: it’s very hard to replace, as on a price-to-conductivity basis it conducts electricity better than any other element. Large amounts are needed across solar, wind, and battery technologies. Much of this is known by the investment community. Like us, the consensus calls for a bull market in copper. Where we differ from the consensus is on timing. Most of the investment world has modeled out copper deficits in the back half of this decade heading into the 2020s, with an acute supply crunch hitting in 2027-2030. We think the supply crunch is already upon us.

There are two reasons for our pulled-forward bullishness on copper, both tied to China. First, the property market bust in China is different from what a similar bust would look like in a Western economy. Second, Chinese green demand for copper is hitting its S-curve of exponential adoption today, as opposed to a few years from now.

Point #1: Chinese legacy copper demand for fixed asset investment (demand driver)

All analysis of copper hinges on China, given that it accounts for more than 50% of global demand. A Western response to the property bust that China is currently experiencing would have involved massive fiscal stimulus, particularly via payments to households to maintain spending. And it would have involved letting many property developers go bust and shelving plans to continue to build fixed assets.

That’s not what’s happening in China. U.S. economists apply a local lens to China, and hence are baffled at the lack of a fiscal response to the deflationary slowdown in China. Chinese leadership prioritizes growth led by continued investment into manufacturing, technology, and even property (at a slower pace). They do not want to turbo-charge what they view as wasteful spending by consumers on goods and services in the U.S model, which is viewed as slothful and inhibiting of long-term development by Chinese authorities.

Graph showing the year-over-year percentage change in China's real estate market, with two comparisons: solid blue line represents Real Estate Investment, and dashed red line shows Floor Space Started, both from 2006 to 2024. The bottom graph compares Cement Price with a solid blue line, and Floor Space Started with a dashed red line, indicating market fluctuations over the same period. Key indicates the Floor Space Started data is adjusted 6-months in advance and right scaled, while Cement Price is left scaled. Data sourced from CEIC, graph copyright Alpine Macro 2024.

The chart at above shows that instead of continuing to fall off a cliff, the growth rate of floor space started (red dashed line) is turning up – while still contracting, it’s stabilizing and will no longer be as much of a drag on copper demand as it was over the past two years. That red line accounts for ~30% of global copper demand.   The take-away is that the bear case for copper that comes from making the casual analogy to the United States’ housing bust from 2007-2012 is likely incorrect and will lead to the wrong investment conclusion.    

Point #2: Chinese ‘new’ copper demand from green technologies (demand driver)

For the uninitiated, it’s difficult to get across the extent to which China has become a green tech powerhouse. China dominates the production of solar panels and battery electric autos. 35% of China’s 22 million in 2023 domestic auto sales came from electric vehicles. The comparable number in the U.S. is 10% of 13 million vehicles.

Large percentage of New Electric Vehicle (NEV) sales in China

Bar chart displaying monthly car sales in China from January 2021 to October 2023. Green bars represent New Energy Vehicle (NEV) sales, while gray bars indicate sales of other fuel type cars. The chart shows a trend of increasing total car sales over the period, with a notable rise in NEV sales. The total sales peak is marked at 2.37 million in the top right corner. Data points are shown on a monthly basis, indicating seasonal trends and overall market growth in the automotive sector.

Source: CPCA, Reuters

These numbers are set to continue to boom in the next couple of years, as China’s strategy to get out of its economic funk relies on an all-out bet on battery electric cars, solar, and other hard technology investments.

Point #3: Copper mining supply has problems, and surplus is gone (supply driver)

Copper mining is in bad shape. A series of supply disruptions in Panama, Peru, and Chile – three key producing countries – has turned what was expected to be a manageable 180kt deficit for 2024 into a much larger 430kt deficit.

Even more relevant to our near-term bullishness on copper is what’s happening downstream of raw copper mining. Treatment and refining charges (TC/RC) for raw copper concentrate at smelters is collapsing, as can be seen in the dark blue line in the chart below.

Collapsing treatment charges indicate near-term supply tightness

Line graph comparing Treatment and Refining Charges (TC/RC) against China's copper production from September 2020 to January 2024. The dark blue line represents the TC/RC in dollars per tonne on the left axis, while the light blue line indicates China's copper production in kilotonnes on the right axis. The graph shows fluctuations in TC/RC alongside a general upward trend in copper production, with data points provided monthly, illustrating the relationship between production costs and output in the copper industry

Source: Goldman Sachs

What does this mean? It means that copper smelters are having a tough time sourcing raw copper from mines. Smelters operate on a narrow margin and adjust the price they charge for treatment and refining based on how much raw material is flowing through their systems. During times when supply is ample, treatment charges are high, as smelters have the upper hand. When supply of raw mined copper concentrate dwindles, smelters lower their charges in order to procure inputs at any cost, so that they don’t have to halt production of their high fixed-cost operations. Treatment charges have collapsed over the last quarter, indicating that the spot market for raw copper is getting very tight here and now.

Bottom-line: the copper market is in a position to outperform now, as opposed to a few years from now, particularly if the world economy accelerates in 2024. If we are wrong about a hard economic landing, the copper market is our preferred expression of the soft landing narrative.   This helps to position the portfolio in either scenario.

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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