Full disclosure, we are writing this email as the polls indicate the United Kingdom voted to leave the European Union. A Brexit has far reaching implications for the global economy and politics. Globalization has placed overwhelming pressure on domestic wages hurting the middle class. Technology and weaker currencies have not helped the domestic worker be more competitive and so now domestic workers are turning to fiscal policy to adopt isolationism to help the domestic worker be more competitive. This Brexit vote foretells the most likely outcome for the US Presidential elections as the US middle class supports Donald Trump's call for nationalism, “America First”.

The central bank's job has now become more difficult. Isolationism is deflationary globally and inflationary domestically. We continue to believe the Fed should move Fed Funds back to 0% and begin to normalize their balance sheet by selling their bonds at historic highs, yields move in opposite direction of price. During the Senate hearings, Janet Yellen did not have an answer for Senator Brown’s question on how to alleviate the coming crisis in 2026, when the US Treasury will be spending 99% of its revenue on interest payments and entitlements. A 2% GDP is not adequate, the Fed needs to begin to heat up the US economy by keeping interest rates near zero for as long as possible to help the Treasury pay off the national debt and generate greater tax revenue.

Thursday, June 23rd before the close we covered our short by scratching the trade at 10,140. Currently we are in synthetic options in the S&P and US 10yr note but given the current market reaction we may just close out these options to reduce our market risk. However, we will be trying to buy the S&P at 1975 and most likely collapse our bond position. We are currently 7% 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 +33.65% 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.