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They're conveniently not reporting their overall returns which would include all the underperformance from the cost of hedging through a 10 year bull market. Th
by brenden2 6y ago
They're conveniently not reporting their overall returns which would include all the underperformance from the cost of hedging through a 10 year bull market. There's also no mention of the fees and how much they eat into the returns.
- markvdb 6y agoActually they somewhat did: "Spitznagel included a chart in his letter showing that a portfolio invested 96.7% in the S&P 500 and 3.3% in Universa’s fund would have been unscathed in March, a month in which the U.S. equity benchmark fell 12.4%. The same portfolio would have produced a compounded return of 11.5% a year since March of 2008 versus 7.9% for the index." This seems to suggest they needed to include the bad 2008-2009 time to come out looking better than just plain dca etf investing...
- brenden2 6y agoThe way it's worded is very confusing to me. Kind of seems like they're trying to hide the fact that they underperform. I imagine once they take out their performance fees (usually 2% per year plus 20% when they exceed the benchmark) those gains aren't as impressive.
- paulpauper 6y agoyeah but you would have a capital gains tax on that option trade
- tomhoward 6y agoThis report from 2018 explains how they outperformed the S&P 500 over the 10 years to that point: https://www.zerohedge.com/news/2018-09-22/how-fund-betting-end-world-outperformed-sp500 https://www.zerohedge.com/news/2018-09-22/how-fund-betting-e...
- aaaxyz 6y agoVSTAX's 10 year return since 2010 was 11.29% annually (191% total return). That means Universa could've lost around 23% every year until 2020, gain 4144% in 6 months and still beat the index (according to my naive arithmetic at least). (0.77^10) * 4244% = 311% -> 211% total return