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.
MAXIN GLOBAL FUND – USD Standard Class C
Monthly Factsheet November 2022
A BUMPER MONTH. With a +37.4 % advance, November 2022 is our best month ever, not only for MAXIN GLOBAL FUND – USD, but over the 9 years of transparent management of its predecessor, Maxin Advisors’Model Portfolio. This stellar performance comes on the heels of our worst month ever in October with a -16.04 % decline, but as we highlighted then, this extreme bout of volatility was bound to be temporary and we recouped our October downdraft in the first two weeks of November, taking our Fund’s NAV to a new high. With a +29.99 % net performance in the 9 months since launch and a + 41 % CAGR, MAXIN GLOBAL FUND – USD outperforms all equity indexes and asset classes.
. As anticipated, after the irrational bout of liquidation of October, Chinese equities rebounded sharply with the HSCEI Index rising by 29 % in November. The speed and magnitude of the rebound vindicates our decision to sacrifice volatility, remain invested and even increase our exposure during the October downdraft. When value is that extreme, investors that bearish and liquidation irrational, subsequent rebounds can only be sharp. We always expected Chinese equities to bottom at the time of 20th Congress of the Chinese Communist Party. The November rebound marks a secular bottom, and a signifcant secular bull market will unfold in 2023.
The Party Congress was a defining moment in China’s history with Xi Jing Ping asserting his hold over the Party. Xi Jing Ping has no option but to ease Covid polcies, boost economic growth and favor the financial markets. Additional funds were allocated to support the real estate sector, yielding spectacular profits on our investments, the Central bank eased monetary policy and a signifcant shift in the COVID policies materialized much faster than planned. November marks a turning point for China as spontaneous demonstrations against COVID across the nation forces the Communist Party to work with the People and not against it. We often mentionned the high level of discontent of the Chinese with the duress of COVID policies but also with the deprivation of freedom of speech, culture and economic opportunites. Xi Jing Ping has two priorities : 1. keep the Communist party at the helm 2. lead the rise of China to economic dominance. He knows full well that if the Chinese rebel against the Party, the Party will not survive at the helm. He also knows that the only way to appease the Chinese is to boost economic growth and give some breathing space to individuals and corporations. Internationally, Xi Jing Ping acted swiftly to normalize China’s relationship with Europe and the US, he defused the Taiwanese issue by giving assurances that he was neither intending to invade Taiwan militarily, nor supporting Putin in his war in Ukraine. In Taiwan, local elections rebuked the ruling independentist party, giving a landslide victory to the far more cooperative KuoMinTang party. The Taiwanese do not want to have a war with China.
It has been our core rationale for investing in deeply discounted Chinese assets that China is the only economy of the world that has avoided the current excesses of the West. It has low inflation, can ease monetary policy and has the means to boost economic growth. China has none of the debt accumulation, leverage or Central bank and Public finances imbalances of the West. Its economy should rebound significantly in 2023 as should industrial profits.
. Our November performance also came from our timing of the bear market rally on Octiber 13th and our decision to go long European and US equities. European stocks rose by 20 % and the SP500 by 18 % since the October bottom while US Goverment bond yields fell from 4.38 % to our target at 3.50 %, contributing strongly to our performance. We took advantage of the rise to take profits on our long positions, and shifted our asset allocation from 135 % long equities at the end of October, to marginally net short at the end of November. We brought forward our target for the peak of the bear market rally from 2023 to the beginning of December 2022 and will be increasing our short exposure ahead. FInally, we succesfully traded precious metals, US Government and corporate bonds, the EUR and GBP and shorted crypto currencies. The collapse of FTX and the other crypto exchanges is the one-before-last step in the bursting of the crypto bubble that we predicted in April 2021
Looking ahead, 2023 will be a volatile year for the financial markets while China will be decoupling and embarking on its own secular bull market. Western economies are facing rising rates and liquidity tightening precisely at the time where growth and earnings will decline.
We excpect sharp declines in real estate prices, lower consumption, deteriorating employment, and the lagged impact of higher rates on over-leveraged corporations. We are worried about a possible debt spiral in the US, French or Italian Public Finances. Western equity markets should start the second leg of the secular bear market imminently. It will see a decline in corporate earnings and a sharp compression of valuations. We expect it to last untill Oct. 2023. The US Dollar will peak and Precious Metals appreciate markedly. European and Japanese bond yields should rise sharply and the last remaining crypto currencies will decline into oblivion.
Factsheet NOVEMBER 2022
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