MAXIN GLOBAL FUND - USD is a Long / Short Directional hedge Fund incorporated in Luxembourg. It started trading on February,22 2022 and replaces MAXIN ADVISORS' MODEL PORTFOLIO which has been trading since January 1st 2014. At MAXIN ADVISORS, we manage FULLY TRANSPARENTLY and publish the transactions on a DAILY basis and the details of the portfolio on a WEEKLY basis.
MONTHLY REPORT
November 2022
MAXIN GLOBAL FUND / MODEL PORTFOLIO
Gross Performance
+ 39.51 % November 2022
+ 80.13 % Year to Date
+ 979.41 % Since Inception
+ 30.58 % Per Annum CAGR 8.92 Years
NAV 1079.41
Performance Comparisons
MAXIN GLOBAL FUND – USD Standard Class C
Net Performance
+ 37.40 % November 2022
+ 29.99 % Since Inception Mar 2022
+ 41.86 % Per Annum CAGR 9 Months
NAV USD 1299.924 129.99
Manager’s Comments
Our Best Month Ever …
With a + 39.51 % gross performance, November 2022 is our best month ever in almost 9 years of transparent management and puts our track record at an all-time high with a NAV of 1079.41, year to date performance at +80.13%, reaching the levels of 2021, a 96 % outperformance when compared to the MSCI World Index and a CAGR of + 30.58 % per annum over just under 9 years, during which we have multiplied the initial capital by 10.8 Times.
As an investment funds, MAXIN GLOBAL FUND – USD is up +29.99 % net of fees in just nine months with a CAGR of +41.86 % outperforming the SP500 by 35% over the period.
Our fund’s NAV is at an all-time high yielding significant positive returns to all our investors, regardless of when they entered the fund.
This performance comes on the heels of our worst month ever in October 2022 but demonstrates the validity of our research process and of our decision to remain invested and even increase our exposure to China in the panicky selloff of October.
Managing money is about knowing what one does and our decades-long experience of China, its system, its culture, its economy and its financial markets enabled us to avoid being taken in the irrational fears and liquidations relative to the Chinese Communist Party Congress in October.
November was an exceptional month in every respect. Our bear market rally started on the dot on October 13th as we were predicting the peaking of inflation, European stocks rallied strongly, the Dow Jones had one of its best month, and the Chinese HSCEi Index, our largest regional exposure rose by 29 %, its strongest performance since 2003.
The violence of the rebound explains why we decided to stay invested in Chinese equities over the summer as the market was declining.
When value is extreme and investors are unanimously negative and bailing out in droves, when the conditions turn, the rebounds are extremely brutal… This rebound could have happened at any time over the summer, on any news and from any level. This is why, instead of bailing out and panicking, we accepted the volatility and even increased our exposure as the market was collapsing. The rebound delivered 2.5 x the downdraft, so it was well worth it. As a matter of example, our exposure to Chinese real estate developers turned out to be some of our best performers, returning 100 % profits after having been our worst performing positions in September and October. We took advantage of the rebound to lighten up and take profits on many individual positions and recouped all the unrealised losses accumulated over the summer.
In the last week of November, the popular protests against COVID led the Government to accelerate its shift of strategy in fighting COVID, and highlighted the urgency for Xi Jing Ping’s administration to provide additional support to the real estate sector and boost economic growth, sending equities further up. The PBIC lowered the Reserve Requirement Ratio, adding liquidity to the economy while the technology giants reported earning with positive surprises..
We have now probably seen the bottom of the economic slowdown and industrial profits decline and the sharp reversal of November marks the secular bottom in Chinese equities and the beginning of a new and lasting uptrend.
November was also a month where we took significant profits on our long positions established in October in Europe and in the US and where we saw a strong rebound in bonds and precious metals.
Looking Ahead
Our bear market rally unfolded as we expected, but the lack of momentum and increasing signs that we are entering a recession in the US and in Europe led us to bring forward the timing of our projected peak, from January 2023 to the end of November or December 2022. As a result we brought our exposure back to Neutral and end the month marginally short. We are waiting for an ultimate move towards 4’100 / 4150 on the SP500 to go back to a more aggressive short positioning.
The volatility of our portfolio should now decrease substantially.
We see the market narrative to evolve ahead from inflation fears to recession fears and we are entering the phase where US corporate earnings should start declining ahead. Interest rates will keep rising, albeit at a slower pace, apart from Europe where we see them accelerating upwards.
As the above chart shows, there is still a lot of upside in Chinese equities and from this point, and we are strategically positioned for this upside. Now that the the bottom has been made and a new trend is established, we shall be far more pro-active trading the volatility of the market on the upside.
Conversely, we see Western equities entering the second phase of their secular bear market very soon, and are gradually re-instating our strategic short positions there.
In Fixed Income, we are taking profits on our long US Government bonds and initiating a strategic short position in European Government Bonds.
We remain strategically Short Oil and Energy, and long precious Metals.
We keep our strategic short bias in cryptos where we see strictly no rationale for any upside while the entire complex is collapsing.
Finally, we expect the US dollar to make one more attempt at the upside before entering a lasting period of decline.
On the macro front, in 2023 the Western macroeconomic scene will be dominated by :
. A sharp economic downdraft
. Continuing monetary tightening
. Sharply lower real estate prices
. A deleveraging of the corporate sector
. A major and worrying Government debt spiral
. A sharp decline in P/E ratios
Conversely, China benefits from a completely different systemic macro framework and should see :
. Easier monetary policies
. Economic growth recovery
. Industrial profits recovery
. a significant re-rating of equity valuations
. a reversion to the mean of equity markets
Risk Analysis and Performance Contribution
MAXIN GLOBAL FUND – USD
November 2022
Asset Allocation Evolution
Detailed Asset Allocation
Risk Analysis and Performance Contribution
MAXIN GLOBAL FUND – USD
Since Inception 9 Months
Portfolio Details
Asset Allocation
Transaction List
November 2022
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