Proprietary Global Asset Model  

Shorebreak Capital’s Global-Macro Absolute Return Model is the underlying investment strategy for Shorebreak Capital’s Global-Macro Absolute Return Hedge Fund Strategy.

Fund Description & Objective

The Shorebreak Capital Global-Macro Absolute Return Model (“The Model”) is a type of absolute return strategy that seeks to achieve long-term total return using an absolute return global-macro investment framework. The Model evaluates all major global asset classes in the global financial markets by analyzing over 150 proprietary algorithmic data sets to generate each asset class with a proprietary ranking. 100% of The Model is invested in the highest-ranking asset class through the corresponding exchange-traded fund (ETF) as a means to invest in the underlying asset class.

While the above model identifies the primary asset class for the current period and cycle, the fund portfolio strategy uses the same model framework to diversify within the primary asset class, if applicable, as well as invest in other asset classes, sectors, sub-sectors, and companies that also meet the acquisition criterion of The Model. This allows the advisor to properly diversity the assets within the portfolio. The portfolio typically consists of 10 – 25 diversified positions that exhibit specific asymmetrical investment opportunities. This allows the advisor to manage risk and achieve consistent and strong long-term capital appreciation.

Unlike traditional investment strategies, where returns are generally tied to the ups and downs of single benchmark, absolute return strategies may produce positive returns in any market environment, independent of the market being up, down of flat.

Absolute return strategies offer a potential strategy diversification benefit, that may help to achieve more consistent returns over time and reduce overall investment risk, but it does not guarantee a profit or protect against a loss.

Why It Works

Investing success comes down to being invested in the right asset class, sectors and companies at the right time, as well as being able to manage risk appropriately. While diversification is a cornerstone in financial planning and integrated into this fund, the strategy behind the fund focuses on investing in the asset classes, sectors, sub-sectors and companies that have the highest potential returns over the next one to six months.

For example, below are the returns for being in only one asset class in each decade for the last five decades. By holding the below assets in each decade would have returned 4,198% versus the S&P return of 436%, or 3,762% higher than the S&P 500 over the same time period.

Thus, being able to identify the asset classes, sectors, sub-sectors and companies that have the highest probability of future gains in each market cycle is paramount to reach maximum investing success. While this example holds only one asset class over a decade to illustrate the efficacy of the strategy, The Model usually identifies one to three different positions annually.

Decade Asset Class Return
1970’s Gold 2,300%
1980’s Japan 500%
1990’s Nasdaq 824%
2000’s Gold 279%
2010’s Nasdaq 295%
Shorebreak Capital’s Global Asset Hedge Fund Model is an actively managed strategy focused on analyzing the below global financial asset classes and investing through the corresponding ETF.
Asset ETF
S&P 500 SPY
Dow Jones DIA
Nasdaq QQQ
Mid Cap Equities MDY
Small Cap Equities IWM
REITs IYR
Europe IEV
Japan EWJ
Asia, Ex-Japan EPP
Asia EEMA
Latin America ILF
20+ Year US Bonds TLT
Gold GLD
Oil USO
US Dollar UUP
BitCoin GBTC

Historical Model Performance Total Return

Total Return S&P Return
189.28% 61.33%

Model Transaction History Since Inception

Date Asset Class Gain/Loss Cost Basis ETF Sold Return Balance
5/14/2020 GLD $20.15 162.97 GLD 183.12 12.36% $2,715,934.74
11/25/2019 EEMA -$6.17 67.00 EEMA 60.835 -9.20% $2,417,081.06
11/11/2019 US Dollar $2,662,027.30
10/24/2019 Gold -$5.12 141.60 GLD 136.48 -3.62% $2,662,027.30
8/14/2019 US Dollar $2,761,892.34
4/22/2019 Bit Coin $5.93 7.04 GBTC 12.97 84.23% $2,761,892.34
10/15/2018 Latin America -$0.01 33.59 ILF 33.58 -0.03% $1,499,130.46
9/18/2018 Japan -$2.54 59.10 EWJ 56.56 -4.30% $1,499,576.90
8/20/2018 Mid Caps $8.44 362.50 MDY 370.94 2.33% $1,566,919.99
6/5/2018 Small Caps $2.56 166.50 IWM 169.06 1.54% $1,531,267.85
4/6/2018 Oil $0.50 12.80 USO 13.3 3.91% $1,508,080.54
1/30/2018 Latin America -$1.29 38.54 ILF 37.25 -3.35% $1,451,385.79
11/10/2017 Oil $1.46 11.48 USO 12.94 12.72% $1,501,648.54
9/25/2017 Small Caps $2.38 143.00 IWM 145.38 1.66% $1,332,219.88
7/12/2017 Latin America $3.33 30.00 ILF 33.33 11.10% $1,310,410.26
1/4/2017 Nasdaq $21.00 117.00 QQQ 138 17.95% $1,179,487.18
11/9/2016 Dow Jones $17.00 182.00 DIA 199 9.34% $1,000,000.00

*As of 8/25/2020

*This is not an offer of securities. No offer of interests is being made or should be inferred.

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