Long-Short All Asset Strategy

Based on our proprietary framework, the Berunda Long-Short All Asset (LSAA) strategy attempts to actively short over-valued  US, European and Emerging Market equities with appropriate long positions in under-valued equities and other global asset classes such as bonds, gold, agricultural commodities and the US Dollar index on a monthly basis or if the bull-bear market probabilities change significantly.  The Berunda-LSAA strategy is primarily a long-short portfolio strategy, with up to 50% shorting to capitalize on over-valued opportunities although at higher risk compared to our Global Tactical Asset Allocation strategy. Actual long/short ratios in the portfolio depend on our outlook of the macroeconomic environment and the probability of a bear market. We are currently about 100% long and 3-5% short in our LSAA strategy.

The table below shows the actual performance of the LSAA strategy on a 2023, 2022 and 2021 on an annual and monthly basis (as of year-end 2023):

Our significant under-performance in 2023 reflects our under-weighting of large cap growth names, whose valuations have remained unjustfiable, in our opinion, despite the ongoing AI hyper-growth characteristics, which we believe will be be short-lived in 2024. Our out-performance with respect to the broader market indices in 2022 reflected the profits while shorting stocks. We remained short over-valued names with no earnings for the foreseeable future, and were highly speculative in nature. However, the short-term performance and riskiness of shorting stocks, including mega-cap tech and meme stocks, as evidenced in 2023, remain high and we do not recommend this strategy to all of our client base, except those with very high risk tolerance. Our overall two-year 2022-23 performance remained well ahead of broader indices up 8.78%, compared to the 3.15% increase in the S&P 500.

The table below also shows the actual performance of the LSAA strategy since significant AUM on a monthly basis (as of 12/31/2023). Investors should note the higher volatility of returns in this strategy compared to our other Tactical Asset Allocation strategies.

Disclosure:  Backtested performance is NOT an indicator of future actual results. The results reflect the performance of a strategy not historically offered to investors and do NOT represent returns that any investor actually attained. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. General assumptions include: That the fund would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Changes in these assumptions may have a material impact on the backtested returns presented. No representations and warranties are made as to the reasonableness of the assumptions. This information is provided for illustrative purposes only. Backtested performance is developed with the benefit of hindsight and has inherent limitations. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. Actual performance may differ significantly from backtested performance. Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable.  No cash balance or cash flow is included in the calculation.