Tralucent Asset Management Inc. (“Tralucent”) launched the Tralucent Global Alternative (Long/Short) Equity Fund (“the Fund”) on March 31, 2020. The Fund became a public fund on October 11, 2023, and Class E units of the Fund began trading on the Toronto Stock Exchange on November 16, 2023. Allow us to update you on our results:

	Mar 31, 2020 – Dec 31, 2020	2021	2022	2023	Jan 1, 2024- Jun 30, 2024	Total
Return from shorts	-0.07%	1.90%	7.95%	1.47%	-5.73%	5.08%
Return from long	40.73%	30.53%	-17.03%	24.50%	19.21%	114.25%
Total return of Tralucent Global Equity Fund (Class A)	38.18%	30.05%	-10.84%	23.85%	12.90%	123.72%
	Indices and popular ETFs
MSCI ACWI	32.67%	18.04%	-12.79%	19.33%	11.29%	94.79%

The above performance of the Fund is not a discrete event. It is a continuation of our solid performance over the past few decades.

Here is our composite performance from inception in September 2008:

Tralucent Composite to June 30, 2024, after ALL Fees
Last year	24.53%
Last three years	12.37%
Last five years	15.48%
Last ten years	13.88%
Since Inception Sept 30, 2008	13.17%
$100,000 since Sept 2008 has grown to:	$701,550.00

Critique on Current Period

The Fund has continued to enjoy solid performance over the past quarter and year. The Class A units of the fund saw a 5.20% return over the past quarter, and a 22.09% return over the past year. Comparatively, the global market benchmark returned 3.96%, and 23.41%, respectively.

This quarter, our Fund returned more than the global benchmark – this happened despite our low single digit negative return from shorting activities. Our shorting activities continued to suffer from upward movements in COIN (Coinbase, which is a cryptocurrency platform), DJT and a couple of other holdings. This continued from Q1, another quarter of poor shorting performance, yet TGAF still managed to outperform. This was due to stellar performance on our long portfolio – mainly due to the AI investment boom. We continue to benefit from solid positions in NVDA, MSFT, DELL, AMD and many other technological names that dabble in or will benefit from AI. This may include hardware sales, software development, or simply AI applications in everyday business that can drive new cost savings, product development and more.

We attribute our outperformance in total return both from our stock picks on the long side and on the short side (even though one side may not always generate positive returns in each period. We want to highlight that the Fund has generated a 5.08 % return from our shorting activities to date. Explicitly put – if you had $100,000, you would have realized $5,083 in gains from shorting alone.

Since Tralucent, the manager and advisor of the Fund, (the “Manager”) takes a very long-term view of investing, the performance of the Fund is often determined by what the Manager may have done years ago as opposed to the actions of the most recent years. Take the case of the performance of the long portfolio. As an example, Nvidia has performed very well in 2023 and 2024, but the Fund has held it since its inception almost four years ago (and even before that). In addition, the Manager has focused on investing in companies that are competitive, innovative, and control their own destiny as opposed to companies that are driven by commodities. As such, the Fund’s overall performance was a function of individual companies as opposed to sector performance.

The long-term approach in investing is also applied on the short side. The Manager often shorts the same security for years, and so performance in a quarter may be due to decisions made in previous quarters. Take the case of Beyond Meat – the Fund has shorted the stock for quite some time.

In general, the combination of long and short strategies has been very effective. This is best illustrated by the fact that the Fund was a top contender for two awards in October of 2023 in the equity focused category. The two awards were the best one-year return to Jun 30^th, 2023, and the second being the best three-year Sharpe ratio to June 30^th, 2023.  The second award is noteworthy in that it implies that not only did the Fund have robust returns, but they were also worth the volatility the Fund experienced.

The second quarter of 2024 has continued the trend of being eventful. Overall, these first few years since the Fund has launched has been an incredible time to be in the market, and we are very excited to see what the next year has in store for the Fund!

Outlook

Although the prices of equity investments have risen handsomely in the last ten years, the earnings yield of the equity markets have shown to be vastly superior to the prevailing yields in the fixed income markets. This is especially true given the current climate of the bond markets in the face of the Federal Government raising interest rates. We expect the equity markets to yield 7%-8% per annum over the next ten to thirty years. This is superior to the approximate 4.6% yield available on long term Treasury Bonds. Currently, markets are not as attractive as they once were. But they are still certainly more attractive than the bond markets. We remind investors that over time, the equity markets significantly outperform other asset classes. Looking ahead to the next ten years, we have little reason to believe otherwise.

As it is our firm belief that equity markets are highly unpredictable over the short-term, we decline to provide any short-term outlook.

We would urge investors to remember that equity markets are not black boxes. Instead, they represent businesses run by millions of human beings that are continuously striving to be better and provide positive returns to their shareholders. It is this human aspiration to succeed which results in higher earnings of the underlying businesses and stock prices.

Tralucent and you:

We would be pleased to meet with you if you are interested in investing in the Fund or learning more about the Fund.

Please feel free to contact us at general@tralucent.ca or at +1 (519) 835-7183.

Disclaimers:

Prior to October 11, 2023, the Fund was offered via offering memorandum only and the Fund was not a reporting issuer during such prior period. The expenses of the Fund would have been higher during such prior period had the Fund been subject to the additional regulatory requirements applicable to a reporting issuer. Tralucent has obtained exemptive relief on behalf of the Fund to permit the disclosure of the prior performance data for the Fund for the period prior to it becoming a reporting issuer.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the Fund before investing. The indicated rates of return are the historical annual compounded total returns of the Fund including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.