UPDATE to March 31, 2025
Dear investor,
Tralucent Asset Management Inc. (“Tralucent”) launched the Tralucent Global Alternative (Long/Short) Equity Fund (“the Fund”) on March 31, 2020. It 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 | 2024 | Jan 1, 2025 – Mar 31, 2025 | Total | |
| Return from shorts | -0.07% | 1.90% | 7.95% | 1.40% | -7.73% | -0.04% | 3.12% |
| Return from long | 40.73% | 30.53% | -17.03% | 24.51% | 34.62% | -6.92% | 124.05% |
| Total return of Tralucent Global Equity Fund (Class A) | 38.18% | 30.05% | -10.84% | 23.85% | 26.89% | -6.96% | 133.96% |
| Indices and popular ETFs | |||||||
| MSCI ACWI (in CAD) | 32.68% | 18.03% | -12.79% | 19.33% | 27.82% | -1.41% | 105.38% |
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 March 31, 2025, after ALL Fees | |
| Last year | 10.04% |
| Last three years | 11.75% |
| Last five years | 18.92% |
| Last ten years | 11.59% |
| Since Inception Sept 30, 2008 | 12.84% |
| $100,000 since Sept 2008 has grown to: | $733,650.27 |
Critique on Current Period
After an incredibly strong 2024 which saw the Fund return approximately 27%, we experienced a significant downturn for the first quarter of 2025. Class A units of the Fund delivered -6.96% for the quarter, with a one-year return of 10.01% and a five-year return of 18.53%. In comparison, our global market benchmark returned -1.41% for the quarter, 13.75% for the year, and 15.48% over the last five years.
This past quarter, the Fund underperformed our global benchmark. In these moments, it is crucial to remind investors that there will be times where our benchmark outperforms the Fund, and that it is likely expected to happen again.
We believe the Fund’s performance was largely affected by the recent turbulence in the global markets for two primary reasons. First, due to trade policies put forward by the current US administration. These policies have led to global economic uncertainty, and a rough and unpredictable market. Increased market volatility has led to a broad sell-off, especially in the US markets. While our investment philosophy is to find fiercely competitive global stocks, a large majority of the stocks held in the Fund are North American, as they best meet our criteria. Thus, the Fund does have a significant exposure to the US markets. Second, we have observed a shift in investor sentiment this past quarter away from large-cap growth stocks, especially in the technology sector. This shift appears to be mainly driven by the prospect of increased tariffs and their potential impact on technology companies. Despite this market movement, we maintain our conviction that these companies possess strong underlying fundamentals respectively, and because of that, we believe that the current market pullback presents an attractive buying opportunity.
In addition, Tralucent generally does not hold cash, and is fully invested. Tralucent also does not invest in areas such as utilities, consumer staples, commodities, and energy stocks – typically labelled as “defensive stocks” – just for the sake of doing so. Year to date, defensive stocks have outperformed the broader market, as investors have fled to safety. Our benchmark has approximately 7% of an exposure to utilities and energy stocks, no doubt softening its negative return for the quarter as compared to the Fund.
Overall, we remain confident. We urge investors to remember to think long term. One quarter of underperformance does not meaningfully shape long term returns. Our composite outperforms the global benchmark over a 5 and 10-year time horizon. As well, the combination of our long and short strategies is, and has been, very effective. Not only does the Fund provide robust returns, but that these returns are worth the periods of volatility the Fund experiences.
We encourage those with idle or available cash to consider entering the market now or adding to their current holdings. Historically, markets have demonstrated an incredible capacity to recover, suggesting that investments made during this period may yield substantial returns over time.
Lastly, this past quarter marked the five-year anniversary of the Tralucent Global Alternative (Long/Short) Equity Fund! Since its inception, the Fund has seen a handsome total return of 133.96% (as per our Class A unit returns). We are extremely proud and are looking forward to the next five years and beyond.
Outlook
We must weigh on two subjects that are likely to be top of mind for most: the tariffs announced by the Trump administration, and the likely course of interest rates and stock prices.
In early April, the Trump administration announced, and enacted, hefty tariffs on most nations that trade with the USA with a stated goal of reducing trade deficits. The stock market has reacted quite negatively – the S&P 500 declined approximately 15% since mid February.
Tralucent remains convinced that at the end of the day, this is a negotiating tactic. We believe that after lengthy negotiations, actual tariffs being levied will be significantly lower compared to their initial proposed rates. We believe that the world will not get into a protracted trade war, and that sanity will prevail in the world’s global trade. Lastly, we expect equity prices to regain their losses much sooner than most anticipate.
We want to remind investors that the current US administration is a populist regime: we should expect significantly higher levels of drama compared to what usually accompanies most US presidencies. However, Tralucent feels very strongly that, in general, the current administration will likely provide tailwinds for stock prices in the years to come. We also urge investors not to get swayed by short term noise in the markets. In the long term, stock prices are determined by underlying earnings and strong fundamentals. 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.
30-year Treasury bonds have climbed to almost 4.6%. This rise has happened despite the concern that tariffs will increase inflation. To reiterate, we firmly believe that the final tariffs imposed will be significantly lower, and their impact on inflation will be much lower than currently predicted. Further, the impact may then be offset by factors such as declining oil prices. From this high, bond yields are most likely to decline over the next several quarters, providing a positive tailwind for equities.
Although the prices of equity investments have risen handsomely in the last ten years, the earnings yield of the equity markets are vastly superior to the prevailing yields in the fixed income markets. Recent declines in equity prices have made the equity markets somewhat more attractive. We expect the equity markets to yield 8 to 10% per annum over the next ten to thirty years. This is superior to the approximate 4.6% yield currently available on 30-year Treasury Bonds. Though the equity markets may not currently be as attractive as they once were, 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.
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.
Quarterly Updates
News
UPDATE to March 31, 2025
Dear investor,
Tralucent Asset Management Inc. (“Tralucent”) launched the Tralucent Global Alternative (Long/Short) Equity Fund (“the Fund”) on March 31, 2020. It 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 | 2024 | Jan 1, 2025 – Mar 31, 2025 | Total | |
| Return from shorts | -0.07% | 1.90% | 7.95% | 1.40% | -7.73% | -0.04% | 3.12% |
| Return from long | 40.73% | 30.53% | -17.03% | 24.51% | 34.62% | -6.92% | 124.05% |
| Total return of Tralucent Global Equity Fund (Class A) | 38.18% | 30.05% | -10.84% | 23.85% | 26.89% | -6.96% | 133.96% |
| Indices and popular ETFs | |||||||
| MSCI ACWI (in CAD) | 32.68% | 18.03% | -12.79% | 19.33% | 27.82% | -1.41% | 105.38% |
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 March 31, 2025, after ALL Fees | |
| Last year | 10.04% |
| Last three years | 11.75% |
| Last five years | 18.92% |
| Last ten years | 11.59% |
| Since Inception Sept 30, 2008 | 12.84% |
| $100,000 since Sept 2008 has grown to: | $733,650.27 |
Critique on Current Period
After an incredibly strong 2024 which saw the Fund return approximately 27%, we experienced a significant downturn for the first quarter of 2025. Class A units of the Fund delivered -6.96% for the quarter, with a one-year return of 10.01% and a five-year return of 18.53%. In comparison, our global market benchmark returned -1.41% for the quarter, 13.75% for the year, and 15.48% over the last five years.
This past quarter, the Fund underperformed our global benchmark. In these moments, it is crucial to remind investors that there will be times where our benchmark outperforms the Fund, and that it is likely expected to happen again.
We believe the Fund’s performance was largely affected by the recent turbulence in the global markets for two primary reasons. First, due to trade policies put forward by the current US administration. These policies have led to global economic uncertainty, and a rough and unpredictable market. Increased market volatility has led to a broad sell-off, especially in the US markets. While our investment philosophy is to find fiercely competitive global stocks, a large majority of the stocks held in the Fund are North American, as they best meet our criteria. Thus, the Fund does have a significant exposure to the US markets. Second, we have observed a shift in investor sentiment this past quarter away from large-cap growth stocks, especially in the technology sector. This shift appears to be mainly driven by the prospect of increased tariffs and their potential impact on technology companies. Despite this market movement, we maintain our conviction that these companies possess strong underlying fundamentals respectively, and because of that, we believe that the current market pullback presents an attractive buying opportunity.
In addition, Tralucent generally does not hold cash, and is fully invested. Tralucent also does not invest in areas such as utilities, consumer staples, commodities, and energy stocks – typically labelled as “defensive stocks” – just for the sake of doing so. Year to date, defensive stocks have outperformed the broader market, as investors have fled to safety. Our benchmark has approximately 7% of an exposure to utilities and energy stocks, no doubt softening its negative return for the quarter as compared to the Fund.
Overall, we remain confident. We urge investors to remember to think long term. One quarter of underperformance does not meaningfully shape long term returns. Our composite outperforms the global benchmark over a 5 and 10-year time horizon. As well, the combination of our long and short strategies is, and has been, very effective. Not only does the Fund provide robust returns, but that these returns are worth the periods of volatility the Fund experiences.
We encourage those with idle or available cash to consider entering the market now or adding to their current holdings. Historically, markets have demonstrated an incredible capacity to recover, suggesting that investments made during this period may yield substantial returns over time.
Lastly, this past quarter marked the five-year anniversary of the Tralucent Global Alternative (Long/Short) Equity Fund! Since its inception, the Fund has seen a handsome total return of 133.96% (as per our Class A unit returns). We are extremely proud and are looking forward to the next five years and beyond.
Outlook
We must weigh on two subjects that are likely to be top of mind for most: the tariffs announced by the Trump administration, and the likely course of interest rates and stock prices.
In early April, the Trump administration announced, and enacted, hefty tariffs on most nations that trade with the USA with a stated goal of reducing trade deficits. The stock market has reacted quite negatively – the S&P 500 declined approximately 15% since mid February.
Tralucent remains convinced that at the end of the day, this is a negotiating tactic. We believe that after lengthy negotiations, actual tariffs being levied will be significantly lower compared to their initial proposed rates. We believe that the world will not get into a protracted trade war, and that sanity will prevail in the world’s global trade. Lastly, we expect equity prices to regain their losses much sooner than most anticipate.
We want to remind investors that the current US administration is a populist regime: we should expect significantly higher levels of drama compared to what usually accompanies most US presidencies. However, Tralucent feels very strongly that, in general, the current administration will likely provide tailwinds for stock prices in the years to come. We also urge investors not to get swayed by short term noise in the markets. In the long term, stock prices are determined by underlying earnings and strong fundamentals. 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.
30-year Treasury bonds have climbed to almost 4.6%. This rise has happened despite the concern that tariffs will increase inflation. To reiterate, we firmly believe that the final tariffs imposed will be significantly lower, and their impact on inflation will be much lower than currently predicted. Further, the impact may then be offset by factors such as declining oil prices. From this high, bond yields are most likely to decline over the next several quarters, providing a positive tailwind for equities.
Although the prices of equity investments have risen handsomely in the last ten years, the earnings yield of the equity markets are vastly superior to the prevailing yields in the fixed income markets. Recent declines in equity prices have made the equity markets somewhat more attractive. We expect the equity markets to yield 8 to 10% per annum over the next ten to thirty years. This is superior to the approximate 4.6% yield currently available on 30-year Treasury Bonds. Though the equity markets may not currently be as attractive as they once were, 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.
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.
