We sold the S&P to hedge our long position with a synthetic option bias to the long side. In addition, we are long the Japanese Nikkei and short US 10yr notes. We believe Janet Yellen and the Fed once again threaded the needle and expect equity prices to rise and the yield curve to steepen as the US economy strengthens further. The challenge for the equity markets is the weakness of the US dollar. Both Japan and Europe need a weaker currency to stimulate their economies to drive global GDP higher.

Today, Janet Yellen and the Federal Reserve dialed back its talk of normalization from 4 tightenings this year to 2, which is good. Unfortunately, Janet Yellen still views the US economy as domestic rather than global. Prior to 1980, this truly was the case but in the new millennium the US economy is affected by the global marketplace. The key indication is Janet Yellen’s insistence that the Phillips is still relevant as an indicator of future inflationary pressures. To reiterate, the Phillips curve, was conceived in 1958 in a paper titled “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957.” It is clear that in an isolated domestic economy the inverse relationship between employment and inflation exist. However, in a global economy where every country is competing for good jobs the inverse relationship no longer exists. In fact, because of globalization, the central banks in the 21st century are fighting deflation rather than inflation. This is why we believe the Fed should not tighten in 2016 and if they tighten as expected in June, we view this as deflationary, negative for asset prices and positive for bonds.

Wednesday, March 16 we sold the S&P at an equivalent index price of 2028.50 and on the close we sold our $Yen long at 112.65. Currently, we are in a synthetic option on the S&P bias to the long side, long the Japanese Nikkei and short the US 10yr note. We are 75% invested.

In 2012 modeled performance (7 ˝ mo.) net of all fees was +12.46% with a 10% Hurdle rate
In 2013, modeled performance net of all fees was +19.73% with a 10% Hurdle rate
In 2014, modeled performance net of all fees was +56.42% with a 10% Hurdle rate
In 2015, modeled performance net of all fees is +72.68% with an 8% Hurdle rate
In 2016, modeled performance net of all fees is +15.78% with a Graduated 10% Hurdle Rate

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Disclaimer:

The Unicorn Macro Fund, LP (“Fund”) operates under the SEC rules of 506(c) of Regulation D. This rule allows general solicitation as long as all purchasers of the Fund are accredited investors and the Fund takes reasonable steps to verify that purchasers are accredited investors. The 506(c) rule benefits funds that perform better than their peers, because for the first time, Regulation D funds can post their results publicly.

The Fund trades both long and short positions in a variety of global markets and its performance is not correlated to any one market. Performance of the model of the Fund is measured by Net Asset Value (NAV) which is net of all fees, is unaudited, and may include the use of estimates. Individual results will vary based on the timing of an investment and past performance is no guarantee of future results and there is a possibility of loss.

The modeled results are based only on capital appreciation from macro style trades. The results do not include dividend reinvestment or any other form of cash flow and are taxed as ordinary income. All trades have a risk/reward objective of at least 3 to 1 and each full position risks no more than 2% of assets. There will be times when market conditions may alter these objectives. Since the inception of the model our trading of the methodology has become more precise.