We continue to believe a stronger US dollar is best for the global economy and US equities. Without Fed support for a weaker Yen, a slower Japanese economy runs the risk of choking on its enormous debt load - currently running at 250% of Japanese GDP. Without Fed support for a weaker Euro, a slower eurozone economy makes it more difficult for sovereign nations to pay off their debt and their banks to unwind their toxic debt. It is true that deflation drives interest rates lower but only up to the point where the risk of default is less than lack of demand for capital. In short, we believe a weak US dollar will perpetuate global deflation and begin to drive long term interest rates higher as the risk of sovereign debt increases.
On Monday April 11th, early morning on the close of the Japanese Nikkei, we sold our long at an equivalent price of 15,750. Later that afternoon we sold our long in the German 10yr at an equivalent yield of 0.115%, yields moves in opposite direction of price. Both these trades executed synthetic options leaving us long the S&P, short the Japanese Nikkei and short both the US 10yr note and German 10yr bund. We are currently 100% 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 +18.75% with a Graduated 10% Hurdle Rate
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.