UPDATE to June 30, 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 – Jun 30, 2025 | Total | |
| Return from shorts | -0.07% | 1.90% | 7.95% | 1.40% | -7.73% | -2.81% | 0.27% |
| Return from long | 40.73% | 30.53% | -17.03% | 24.51% | 34.62% | 3.84% | 143.28% |
| Total return of Tralucent Global Equity Fund (Class A) | 38.18% | 30.05% | -10.84% | 23.85% | 26.89% | 1.03% | 154.04% |
| Indices and popular ETFs | |||||||
| MSCI ACWI (in CAD) | 32.68% | 18.03% | -12.79% | 19.33% | 27.82% | 3.84% | 97.03% |
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, 2025, after ALL fees | |
| Last year | 13.55% |
| Last three years | 17.74% |
| Last five years | 16.94% |
| Last ten years | 12.32% |
| Since Inception Sept 30, 2008 | 13.08% |
| $100,000 since Sept 2008 has grown to: | $783,398.07 |
Critique on Current Period
The end of the first quarter can be described as tumultuous: significant downturns resulted in the markets plummeting more than twenty percent from their peak. The start of the second quarter offered no reprieve – markets continued to slide. Our own benchmark fell approximately 11.5%. However, as with all short-term noise, “this too shall pass”. The markets have since rebounded to new highs, a testament to the importance of patience and long-term thinking.
The performance of the Fund followed a similar pattern this quarter. Class A units of the Fund fell approximately 11.5%, before rebounding. Overall, Class A units of the Fund delivered a 1.03% return for the quarter, with a one-year return of 13.55%, and a five-year return of 16.94%. In comparison, our global market benchmark returned 3.84% for the quarter, 13.74% for the year, and 12.03% 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.
As was seen in the first quarter, the Fund’s performance was largely affected by the recent turbulence in the global markets. The current US administration continues to inconsistently put forward and implement trade policies, doing little to assuage economic uncertainty felt around the world. Increased market volatility 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.
In the face of a strengthening market – as seen in the second half of the quarter – our shorting activities were challenged. There is a phrase, “a rising tide lifts all boats”. It is true that a strong economy can help mask poorly performing and badly run companies. Although our shorting did not yield a positive return, we are immensely proud of how we managed our shorts to limit our losses to only -2.81%, when the broader market recovered close to 20% from its low this quarter.
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 these returns are worth the periods of volatility the Fund experiences.
Outlook
The first half of the year has certainly been eventful, with the global markets taking quite a tumble, and in turn, the Fund seeing the same. However, the global markets have since rebounded, and, as of writing this outlook, the Fund has climbed to its highest high since inception.
If anything, this past quarter has highlighted the fact that volatility is normal, and to be expected. We remind investors that these are the moments to maintain composure and stay the course. By remaining calm during times of market turbulence, investors can position themselves to benefit when the markets eventually recover.
The ever-present risk of uncertainty cannot be discounted: geopolitical tensions, sudden changes in policy, and overvalued markets can all lead to increased to market volatility. However, a well-diversified portfolio that focuses on high quality companies with solid fundamentals coupled with a long-term outlook remains crucial to overcoming uncertainty and turbulence in the markets.
As ever, we are optimistic about the future of equities. 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. We see that globally, economies continue to grow despite policy uncertainty. As well, central banks have signalled their willingness to support markets with the possibility of low interest rates.
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. 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.
