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

* Expense Ratio is 1.81%.
* 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

MACRO OBSERVATIONS AND MARKET ANALYSIS

This Month’s Performance

June was a challenging month for the Dynamic Alpha Macro Fund.  We continue our risk management process of concentrating on only our highest conviction ideas while awaiting the market to provide additional opportunity.  It is important to remember that non-correlation is not linear; it means outperforming and underperforming independent of what the broad market does.

The commentary that follows steps back from day-to-day moves to address the key questions we heard from clients in June.  We outline how we are positioned in the current drawdown and explain why we believe today’s environment favors a disciplined, high conviction approach.

Face-to-face questions

Our global macro manager (who has managed his hedge fund since 2014) spent some time recently attending various investment events, meeting with both prospective and existing clients.  We fielded several recurring questions.  What follows is a compendium of many of the questions we were asked during our travels. We’ll administer and respond to these questions from the perspective of an anonymous ‘Client X’.

Client X: You missed the outbreak of inflation in 2021-2022 and once again seem to be making the case for buying duration. How are you confident that you are not making the same mistake?

It’s true that we missed the outbreak of inflation in 2022. At the time our mistake was in focusing on the stock of debt in the economy as opposed to the fiscal thrust from the post-Covid stimulus and associated wage inflation. Today, we see the opposite: weak wage growth (see chart at top of next page) and a much weaker underlying economy where low-wage healthcare job growth flatters the labor market while the AI boom masks weakness in non-tech sectors.

Slowing wage growth

Source: Pantheon Macro

Client X: But even if that’s the case medium-term, new Fed chair Kevin Warsh made a very hawkish speech and it seems like rate rises may be around the corner, which would put further pressure on bonds, right?

Maybe, but we are actively positioned against that and have historical data to back us up.

Interest rate hikes priced in

Figure 1: Source: BCA Research

It’s true that bonds markets across the developed world are pricing in interest rate hikes. In the chart at left, save for Australia, DM central banks are expected to hike, with the U.S. Fed expected to hike by a little more than once over the coming year.

However, in our May 2026 investor letter, we showed that during the last major economic downturn (the 2008 GFC), the bond market bottomed in June 2007 and completed the bulk of its rally by Q1 2008, before the core of the equity market’s downturn had even begun! Bear in mind the further point that hindsight is 20/20: today we know the 2008 GFC as the worst deflationary crisis since the Great Depression. At the time, in mid-2007, the Fed was predominantly concerned with high inflation, as CPI had hit 5.5% on the back of years of rising commodity prices.

Something analogous may very well unfold over the coming 6-18 months.

Client X: Thanks. Do you have a view on AI and the current CapEx cycle and how it might impact macro themes?

We are not technology investors but given the scale of the AI CapEx build out, you simply must have some sort of view to navigate the current environment. AI and associated equities account for almost half of the value of the S&P 500 and more of the Nasdaq 100. We take a dispassionate approach to analyzing AI – it may turn out to be a transformative general purpose technology analogous to electricity, railways, or the internet; or it may end up being slightly narrower in scope and yet still transformative in applications such as biotech.

Regardless, our thinking boils down to a few common-sense insights: much as Uber subsidized rides across your local city back in 2013 and now charges 5x for a cross-city ride as it did when it was building market share, current token prices are heavily subsidized. The marketing pitch of Silicon Valley is “adopt AI or face organizational death within 3 years”. CEOs of large companies are feeling psychologically pressured into adopting AI quickly and at scale – they instruct their staff to deploy AI and experiment. This blind AI adoption is behind the token maxxing craze, boosting token usage in recent quarters. It’s unclear if this is sustainable or if GPU rental rates reflect long-term, baseline demand. Our guess is not.

Second, if AI is as transformative as it is billed to be, it will require organizational change that can only take place over 10-20 years. Much as central steam power had to be completely remapped and distributed via electricity to individual workstations within manufacturers 100 years ago, companies like Proctor & Gamble need to be completely reorganized if AI is a true general purpose technology. Internal politics will slow this transition. AI upstarts will take years to become obvious disrupters, much as Amazon took over a decade to become an obvious threat to mainstream commerce. Organizational change happens slowly, fear mongering aside.

In the meantime, AI is viewed as an existential race by the hyperscalers and the entire ecosystem beneath them. Should Microsoft and other tech behemoths decide not to cut CapEx, they will quietly transform from low capital intensity monopolies into capital intensive utilities, and their P/E ratios could fall further from the low 20s to the low teens or even high single digits – on a permanent basis. This is the real AI bear case (for markets, not the economy): a great technology, but one that takes a couple decades to come to fruition, with low profit margins.

Client X: Does the above tie into your bear case for large cap U.S. equities?

Yes. We were stopped out of our short Nasdaq 100 trade in April. We will look to put that trade back on later this year, as we see a 40-50% decline in broad, large-cap U.S. indices shaping up. This decline would be a standard bear market, along the lines of 1973-1974 or 2000-2002.

The economy and the stock market are not the same thing – in the long run the stock market follows earnings growth tethered to underlying economic growth, but in the medium term (even up to 15 years), these series can diverge. There doesn’t seem to be a massive credit bubble, and household balance sheets are in decent shape. Hence, the catalyst of the next bear market will be the same driver that kicked off the dot-com bust in March 2000: absolutely nothing at all. Stocks simply started selling off and the wealth effect went into reverse. The same ordering makes sense today: stocks sell off, and the ensuing bounce is a bear market rally. Stocks keep selling off and the top 50% of households by income cut back on their spending. A very mild recession ensues, alongside a severe bear market in equities, which are priced for perfection today.

Client X: You’ve had some trouble with your commodity trades, specifically cattle, sugar, and corn – how do you compete with e.g. a specialist commodity manager who only trades cattle?

We know less about every single commodity market we trade than a given specialist in those markets. But we have two advantages that allow us to compete and make money over time in these trades:

• First, we only place trades when we feel the fundamental and technical setup warrants it. This might mean ignoring a market for 4-5 years before placing a trade. A specialist must always have a view and a position in their market, even when there is nothing to do.

• Second, taking a 30,000 foot view approach with a different perspective than a specialist can be very valuable. Most data on commodities focuses on the supply side; this makes sense as supply data comes out regularly and from reliable data sources, whereas demand must often be imputed or is far more ephemeral in nature. And yet commodities must balance across supply, demand, and inventories. There are times when focusing on demand is critical, even though it’s tougher to analyze. For example, we believe this to be the case for the cattle market today, where supply is clearly constrained – with no catalyst for relief on the horizon – yet demand is beginning to flag. It’s tougher for a specialist manager to make a data-driven decision to short cattle based on weakening household demand and a shift from beef to chicken at the purchase point. We can make that call and act on it.

Client X: Thanks for sharing your thoughts and being direct in your responses. Given that you are in a drawdown, what’s your current positioning?

As we are in a drawdown, we have pared our positioning back to our highest conviction medium- and long-term ideas:

[1] Long copper. Copper is quietly breaking out to all-time highs, with far less commentary than it had a few years ago. There has been no new greenfield mine supply in over ten years, and demand from a stack of AI, EVs, military, and most importantly power distribution and transmission is only accelerating.

[2] Long gold. After strong performance in 2024 and 2025, driven by central bank buying, gold became extremely overbought in early 2026 – retail investors bought gold on margin in Q4 2025 and Q1 2026, placing a temporary top in what we believe to be a long-term, secular bull market. We avoided most of the 29% pullback in the price of gold in the past five months, reinstating a long position at the end of June.

Bull markets advance in phases. The chart at the top of page 5 depicts a stylized long-term bull market. Although this chart is plastered on countless investing websites, it has stood the test of time as human nature doesn’t change.

The 2024-2025 stage was a stealth advance that few investors participated in. The next leg of the gold bull market (2026-perhaps 2028) will be the awareness phase. Should the next phase of the gold bull market coincide with weakness in broader equities, and in particular tech stocks, Western public participation in gold should heat up, culminating in a larger sell off and bear trap a couple of years from now. The mania phase awaits us in the early 2030s.

[3] Long 5-year Treasuries. After five years of underperformance, alongside a roaring equity bull market, no one owns or is bullish bonds. 80-year-old investors are allocated 100% to U.S. equities. The 60/40 stock/bond portfolio has been declared dead.

Over the next 10-20 years we concur with the consensus that bonds will underperform in an inflationary world. And yet we can’t shake the feeling that the bond market today is set up the way the gold market was in late 2023: quietly working its way toward the end of a long, multi-year range with sentiment in the gutter. A breakout in bonds (lower yields) could easily coincide with a bear market in overvalued large cap U.S. equities. We are positioned for such an outcome.

Lastly, although not in the portfolio today, we will look to reinstate our core agriculture themes shortly. We look to buy corn, buy sugar, and short cattle. Corn and sugar are 50% below their price peaks in 2022, trading close to the cost of production. A super El Nino weather pattern will add heat stress to corn crops in South America, while sugar is negatively impacted by heat in India and Thailand. Bumper crops from recent years will likely give way to much tighter stocks. Cattle demand continues to weaken at the margin; sky high beef prices are inducing a trade-off toward cheaper pork and chicken.

We look forward to reconnecting again in early August. Please feel free to reach out if we can provide additional clarification on specific ideas, or the portfolio more broadly.

As always, we remain nimble. 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 and short positions.

We Are Here To Help

We appreciate your continued trust and partnership and look forward to updating you on our progress in the coming months. Please feel free to reach out if we can provide additional clarification on specific ideas or the portfolio more broadly.

If you are a financial advisor and would like more information on our multi-dimensional approach towards asset management, you can download our white paper titled Busting Seven Risk and Return Myths by visiting our website at DynamicWG.com, or email us at info@DynamicWG.com. If you are an individual investor, we are happy to address any questions you may have and put you in touch with a qualified advisor, if so desired.

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/
• 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.
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• 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.
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• 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.