The Mosaic Global Fund had an estimated performance for the month of February of -0.25%. We had gainers in our hedge fund and managed futures holdings together with stocks and long bonds with losses in our commodity holdings.
The month was characterized by strong stock markets in the early part of the month but finished off with some more volatility. During the month we saw a downgrade in the UK, further discussion in the US regarding the reduction or termination of their quantitative easing and an Italian election with comical signs.
The month’s performers were long bonds who recovered some earlier losses. Stocks in the US were positive while their European peers produced slightly negative returns for the month. The commodity sector had a very weak month, losing over 3.5% as a whole, with gold showing an over 5% loss.
Over the course of the last few months, there has been a lot of discussion in the industry about funds that have seen problems, halted trading or even shut down. These issues are often related to a lack of liquidity in these managers’ portfolios. Also, the valuation of the portfolios has been called into question. These problems tend to be magnified when funds experiences larger redemptions.
We often get questions from our investors and IFA clients about these issues and whether they could affect the Mosaic Global Fund; therefore, I wanted to raise this topic in the monthly commentary. The Mosaic Global Fund has about 70-80% of its underlying holdings in Exchange Traded Funds (ETFs). ETFs are liquid on the day. The remaining 20-30% of the holdings are trend followers / managed futures investments together with a smaller hedge fund allocation. The trend following funds are themselves trading in liquid futures contracts and are also the most liquid of all the “alternative” or hedge fund styles. They have monthly liquidity. This means that the majority of the Mosaic Global Fund’s underlying investments are accessible at any time.
Our investment strategy provides three important benefits to our clients. First, we follow this strategy because our investment style is nimble and flexible. We are able to respond to changes in the market quickly in order to safeguard your capital. Second, the fund is reliably valued. It is easy to understand that because 70-80% of our holdings are liquid on the day, the value is clear. This means no surprises down the road when we face turbulent markets again. Third, the added benefit of this strategy is that we will never face any problem with redemptions, if and when an investor wants to redeem their holdings.
We would be more than happy to discuss all of these topics and any other questions you might have. Please drop us an email at firstname.lastname@example.org and we will get back to you immediately.
To your investment success!
Per Olov Jansson
CEO Cardea International