Dynamic Alpha Macro Fund (DYMIX) – September 2024 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: 1.99%
* Fund inception: 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

Contributors:

• Long: Gold, Japanese Yen, Silver, 2-Year Treasuries, Strategic ETFs
• Short: Crude Oil

Detractors:

• Long:    None
• Short:  E-Mini S&P 500, Feeder Cattle

Current Positions (as of 9/30/2024):

• Long:  Japanese Yet, 2-Year Treasuries
• Short: E-Mini S&P 500, Feeder Cattle, Crude Oil

Macro Observations and Market Analysis

This Month’s Performance

Our global macro strategy outperformed the S&P 500 significantly in September, with the Dynamic Alpha Macro Fund returning 10.00% versus the S&P 500’s 2.14%. This month exemplifies the core principle of diversification that we emphasize in our strategy, where non-correlated assets play a crucial role in portfolio construction.

Key contributors to this strong performance were our long positions in Gold, Japanese Yen, Silver, 2-Year Treasuries, and our always held strategic positions in US Stock ETFs. Additionally, our short position in Oil contributed positively. There were no long-side detractors, and while our short position in the S&P 500 acted as a drag, the overall impact was minimal compared to our other positions.

As we continue to navigate market conditions, our strategy remains focused on delivering equity-like returns with the added benefit of non-correlation.

Diversified Macro Fund (DYMIX)

As we close out September, we reflect on the journey that has brought us to where we are today. Launched just over a year ago, on July 31, 2023, Dynamic Alpha Macro Fund (DYMIX) continues to build on a solid foundation of dynamic and adaptable macro investment strategies backed by a disciplined investment philosophy. This month, we’re particularly focused on long-term perspectives, as our market outlook helps guide the fund’s positioning and strategy.

Navigating a Changing Landscape

Markets are evolving, and so is our view. While short-term fluctuations are part of the game, maintaining a long-term perspective has always been key to navigating macroeconomic shifts successfully. The dynamic nature of global markets requires strategic foresight and the ability to react quickly when circumstances demand. At Dynamic Alpha Funds, we strive for our investors to remain well-positioned to benefit from these changes without losing sight of the bigger picture.

Market Insights & Alpha-generating Investment Strategy

In September, the fund maintained its core positions across a diversified set of macroeconomic themes, a strategy that continues to pay dividends as we navigate a volatile global environment. Our current positions reflect our cautious yet opportunistic approach to the markets:

• Short Equities (S&P 500): We remain cautious on U.S. equities. As valuations continue to be stretched, we are prepared to capitalize on a potential downturn.
• Long 2-Year Treasuries: While the long-term bond market faces headwinds, we find value in shorter-duration U.S. Treasury notes, positioning the fund to benefit from anticipated economic softness.
• Long Japanese Yen: Our long position in the yen reflects our view of its potential appreciation against a weakening dollar.
• Short Crude Oil: The global energy markets remain volatile, and our short exposure to crude oil capitalizes on a slowdown in demand.
• Short Feeder Cattle: This remains a strategic position in the agricultural commodities sector, where we see opportunities to capture market dislocations.

A Navigating With Perspective

At this moment, we also reflect on the broader investment journey that has led to our fund’s current outlook. As our Chief Investment Officer and Portfolio Manager, Brad Barrie, recently noted, successfully navigating markets requires discipline, adaptability, and a clear vision. Over the past year, the importance of setting realistic expectations and having a well-thought-out plan has been evident. At Dynamic Alpha Funds, we’re building on that philosophy to aim for growth and success over the long term.

Even when market views and timing are off, cutting losses early and allowing winning trades to grow has remained a cornerstone of long-term success. This strategy is particularly crucial as we move through periods of market turbulence. For DYMIX, it’s not about timing every trade perfectly; it’s about managing risk effectively and taking advantage of high-conviction opportunities.

The Road Ahead: 2025-2035

Looking forward, our views for the next decade reflect a significant shift in the macroeconomic environment:

• Equities: From a tactical global macro view, we anticipate a secular bear market akin to 2000-2009. Valuations are at extreme levels, while fiscal policy and volatile inflation rates will prevent monetary policy from being as effective as in the past. To capitalize, we plan to have meaningful short exposure to stock index futures at different times as we move forward.  This is counter-balanced by our strategic long-term buy & hold approach, with approximately half of the fund being invested in US Stocks.
  
  
• Bonds: The 30-year bond bull market is behind us. In anticipation of economic weakness, we see value in the 2-year Treasury note. Broadly speaking, we see the potential to be short the 30-year Treasury bond to the end of this decade and beyond.
  
• Commodities: We are positioned for a continued secular bull market in commodities. However, we believe this will manifest differently than the secular bull market from 2001-2011 because there is no dominant demand-side driver to propel the bull run. Not everything will go up. We foresee industrial and precious metals at the forefront, with energy lagging. As always, grains and other “softs” are for trading—not investing.
  
• Currencies: With the U.S. dollar at a turning point, we expect to see a secular bear market in the dollar over the next 5-10 years.  We will rotate our positions across the G7 currencies as opportunities arise.

While the timing of these themes may shift, we remain confident in our overall outlook and approach. We will always strive to maintain flexibility, manage risk, and capitalize on opportunities.

Conclusion

As we look ahead, we are grateful for the continued trust and confidence placed in us by our investors. The Dynamic Alpha Macro Fund is well-positioned to navigate both the short-term market shifts and the longer-term macroeconomic trends that will define the next decade. We will continue providing monthly updates on our performance and strategy to inform our investors about our multi-dimensional approach and market developments.

Thank you for your continued support, and we look forward to sharing more insights in the coming months.

Sincerely,

Your Team at Dynamic Alpha Funds

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 1-833-462-6433 or access online at https://regdocs.blugiant.com/dynamic-alpha-macro/
• 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 .
• 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.
• 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. 
• Ceros Financial Services, Inc., member FINRA/SIPC, serves as a distributor of 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.
• The 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, and the crude oil 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 that are 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. They are not a promise or guarantee of future investment strategies or performance.
• Our economic outlook, including predictions of a hard-landing recession and its impact on investments such as Nasdaq 100, gold positions, and U.S. Treasuries, is speculative and should not be relied upon for making investment decisions. Economic conditions are complex and can be affected by various unforeseen factors.
• Investors cannot invest directly in an index.