The objectives of the Darling Macro Fund (DMF) are to earn attractive total returns over the medium term while protecting investors during equity market downturns..
The first 3 quarters of 2020 has provided a real time stress test of the approach.
During the downturn in Q1, when Australian equities dived, the fund outperformed equities by 20%, strongly protecting capital during the downturn.
During the recovery in Q2 and Q3, the fund earned 8% while equities earned 15%, offering some participation in the recovery.
Over the full 3 quarters, DMF was 18% ahead of Australian equities.
DMF invests in major markets such as short term interest rates, bonds, equities, precious metals, commodities and currencies.
Each asset class respond differently to changes in expectations for economic growth and inflation. Allocating to combinations of these markets may offer unique exposure to a range of environments.
Precious metals, bonds and certain growth oriented equity markets have been the best markets year to date (30/9).
Since the equity market lows in late March, DMF's exposure has been tilted strongly to bonds and short term interest rates, while also holding markets such as Gold, Live cattle, A$ (short), Taiwanese equities and US equities.
Source: Darling Macro. For wholesale investors only.