As we go into the US payroll numbers tomorrow, the global deflationary pressures from a weak US dollar are affecting the markets. Unfortunately, we do not expect the Fed to tighten any time soon as domestic economic numbers are beginning to soften. The challenge for the Fed is how to support the US dollar without raising short term interest rates. We continue to believe the Fed should begin to sell their long term bonds to unwind their balance sheet to the support US dollar. However, the Fed unwinding its balance sheet is highly unlikely, consequently, given the negative feedback loop of a slowing global economy facing deflation, we expect asset prices to be under pressure and bond markets to begin to rally again.
Thursday, May 5th on the close we bought back our short on the German 10yr bund at equivalent yield of 0.163%. Currently, we are short the Japanese Nikkei and are 25% 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 +24.58% 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.