UPDATE to March 31, 2026

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:

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:

Critique on Current Period

The dominant story of Q1 was the continued pressure on technology and software. Renewed fears around AI weighed on investors across the sector especially regarding: the extent to which AI is collapsing hundreds of software models/making them redundant, the effect of AI on a larger restructuring of the technology and software structure and the questions surrounding what that restructuring looks like, and lastly what a future with AI would look like in general, and the extent to which it would replace human workers. Of course, these worries were seen in the performance of technology and software companies as a whole. The IGV index – a useful proxy for this sector – was down some 28% in Q1. On the long side, the Fund holds several large positions of large-cap technology stocks such as Broadcom, Nvidia, Microsoft, and Google. Although these are robust, competitive, quality companies that we hold with conviction, they were not immune to the sector wide selloff.

Secondly, macro headwinds cannot be ignored. Elevated inflation and rising oil prices tied in part to renewed tensions in the Middle East and the Iran conflict have kept interest rates higher for longer, which in turn compresses the valuations of equities.

On the short side of the portfolio, we feel incredibly encouraged. Although our overall return from shorting was negative, we are seeing meaningful improvement relative to Q4 2025 and more broadly, throughout 2025 in total. A key change we have been implementing is a more systematic approach to accounting for price momentum when entering and sizing short positions. Historically, shorting a fundamentally challenged business too early has been a common and costly mistake in our strategy. By incorporating momentum as a factor in our timing, we are being more disciplined about when we short and how large we build these short positions. As we cycle out of older positions that were established under the prior framework and replace them with names that meet our updated criteria, we expect this structural improvement to compound over time. We want to be candid: the full benefit of this shift is not yet visible in quarterly returns. But the directional improvement is clear, and we believe this will continue to show up in the numbers as the portfolio turns over and we continue to implement our new strategy.

A few difficult quarters, or even a difficult year, in our view, is not a worrying sign. Indeed, it is to be expected, especially in actively managed funds. What matters most – and what we repeat time and again – is long term performance. On a 5, 10, and since inception basis, our track record outperforms our benchmark by a meaningful margin. This performance is a testament to our investment strategy: compound capital over full market cycles, not optimizing for any single quarter. 

It is also worth pointing out that this is not the first time the Fund has faced negative returns, as experienced in 2022. What followed were several years of strong returns, as positions we held and/or even added to in that difficult period went on to deliver outsized returns. This is a clear demonstration of why patience and process matter more than worrying about short term noise. We expect the same discipline to serve us and our investors here, as well.

Alongside this report, we would point our readers to “Investing – A Primer”, which outlines the pain (various levels of market corrections) that comes with the joy of long-term investing. Market corrections are not anomalies – they are a recurring feature of investing. Of course, corrections of any kind are not pleasant to live through, but they are certainly not a signal to abandon a disciplined investing strategy. History repeatedly shows that investors who stay the course are the ones best positioned to capture the recoveries that follow. Our own track record bears this out.

Finally, we want to remind our investors that we at Tralucent are fully invested and invest alongside you. We are in this together.

Outlook

Overall, our outlook is very similar to the past few quarters. Volatility is normal, and to be expected. We remind investors that these are the moments to maintain composure and stay the course. As ever, we are optimistic about the future of equities. We remain confident and urge investors to think long-term.

We encourage those with available cash to consider entering the market or adding to their current holdings.

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.