LRT Capital Management August 2023 Investor Update
Summary
- LRT Capital is a fundamental investment hedge fund. Our sole aim in crafting our investment program is to maximize long-term investment returns.
- August was a strong month for the strategy, with positive returns and outperformance of stock market and hedge fund indexes.
- The strategy has a low market exposure and broad diversification, aiming to perform well regardless of overall market conditions.
- Potential market downturns in the second half of the year are acknowledged, but the strategy is positioned to deliver positive results.
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Dear Friends & Partners,
Our investment returns are summarized in the table below:
Strategy | Month | YTD | 12 Months | 24 Months | 36 Months | Inception |
LRT Global Opportunities | +10.29% | +50.62% | +26.50% | +0.27% | +11.98% | +22.65% |
Results as of 8/31/2023. Periods longer than one year are annualized. All results are net of all fees and expenses. Past returns are no guarantee of future results. Please see the end of this letter for additional disclosures.
August was a very good month for our strategy, with our long holdings performing well, as well as our hedges, which delivered positive alpha. Year to date we are up over 50% (net of fees) and have outperformed all broad stock market indexes and all relevant hedge fund indexes significantly. More importantly we have done this with net exposure of under 40% and beta adjusted exposure of less than 25%. I expect that if market conditions deteriorate and broad indexes perform poorly, our strategy should deliver low but still positive results because year to date, we have NOT benefitted at all from the “magnificent seven”1 stocks that drove most stock market results. If the market pulls back, I expect the declines to be concentrated on these stocks – which we don’t own.
There are many things that could cause a market downturn in the second half of the year: renewed recession fears, a consumer-led economic slowdown, weakness in the housing market or an unforeseen geopolitical shock. We can’t predict the future, and so we have created a portfolio with low market exposure that is very broadly diversified, which we believe will perform reasonably well regardless of what the overall market does.
As always, I look forward to hearing from you and answering any questions you might have. Thank you for your continued interest and support.
Lukasz Tomicki
Portfolio Manager, LRT Capital
| Disclosure: |
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
