We are pleased to announce that the Horse Cove Partners strategies have been featured in BarclayHedge’s monthly performance rankings:
Horse Cove Partners Enhanced Yield strategy was ranked #10 in their Option Strategies category for 2023.
*These strategies were ranked based on the data in BarclayHedge’s Database for the year 2023. No compensation was paid for this award.
Horse Cove Partners LLC Portfolio Composite Summaries of Net Returns for January 2024
The Enhanced Yield Strategy was up 0.29%.
The Money Plus Strategy was up 0.39%.
The Absolute Return Strategy-Composite Portfolio Margin was up 0.03%.
The Absolute Return Strategy-Composite Reg. T Margin was up 0.14%.
Market Recap and Commentary
The S&P 500 continued its run through January, marking three consecutive months of gains for the index. Over the last three months, the index rallied well over 15%, an impressive feat not often achieved. Digging a little deeper, we observed that over 70% of the gains in the index for 2023 were attributed to only 6 names and almost 50% of January’s return is owed to those same names. Historically speaking, it is not a sign of a healthy market when the return of the index is so highly concentrated (6 out of 500 stocks). Any sign that big tech cannot meet the euphoric expectations that the market has priced in for them should have an outsized effect on the index to the downside.
Investors continue to focus on what they want to hear; companies meeting or beating expectations, ignoring how drastically those expectations were reduced only a few months ago. The Fed, and its fearless leader Jerome Powell’s dovish surprise in his last speaking engagement, raised expectations for cuts in the FED funds rate, investors are ignoring the fact that recent economic numbers are giving the Fed all the ammo it needs to hold the rate steady. It seems at this point investors have assumed we will at least cross 5000 in the S&P and are looking to squeeze out all the return they can get.
Performance Updates and Benchmarks
Here are the composite net returns for the Enhanced Yield Strategy for the periods indicated:
Bloomberg US Agg. Bond Index, formerly known as Barclays US Aggregate Bond Index.
*Trading of HCP Enhanced Yield accounts began in June 2017.
Source: http://bloomberg.com/quote/LBUSTRUU:IND
Here are the composite net returns for the Money Plus Strategy for the periods indicated:
*Trading of HCP Money Plus Strategy began in August 2020. Composite returns effective September 1, 2021. According to the new marketing rule, gross fees may only be shown with net fees.
Here are the composite net returns for the Absolute Return Strategy-Portfolio Margin for the periods indicated:
Source: www.spdji.com
*Trading of HCP Portfolio Margin accounts began Dec. 2010.
*Trading of HCP Reg. T. accounts began in Sept. 2014.
IRA accounts must use Reg. T Margin, which means that fewer option contracts may be written versus the “regular” accounts that use Portfolio Margin. Over time, this may also result in lower returns when compared to the “regular” accounts.
About Horse Cove Partners LLC
Profiting from the art and science of taking risk. ®
www.horsecovepartners.com
Horse Cove Partners was founded by Sam DeKinder and Kevin Ellis in January 2013 with the commitment to help grow clients’ assets with a highly disciplined investment strategy, replicated weekly, to extract absolute returns from the market by trading short volatility option spreads. The firm was launched after more than two years of trading experience with personal assets that began in December 2010. The firm is built on the strength of over 20 years of experience in hedge fund trading, beginning in 2002.
The firm offers clients multiple option strategies, including overlay strategies on equity and bond portfolios as well as: Absolute Returns, which commenced trading in December 2010, Enhanced Yield, which began trading in June 2017, and Money Plus, which began trading in August 2020.
“We do not believe we are smarter than the market, nor can we time the market in any given week or month. As a result, we take an investment approach like an insurance company in that our investment strategy focuses on probability of success and the management of risk. We believe that it is possible to realize positive returns through disciplined focus on the risk of each trade with a weekly investment horizon and accepting intelligent losses when risk events occur.” – Sam DeKinder and Kevin Ellis
We thank you for your continued support.
Sincerely,
Sam DeKinder, Kevin Ellis
Greg Brennan
Don Trotter
sdekinder@horsecovepartners.com
kellis@horsecovepartners.com
gbrennan@horsecovepartners.com
dtrotter@horsecovepartners.com
Horse Cove Partners LLC
1899 Powers Ferry RD SE
Suite 120
Atlanta, GA 30339
678-905-5723 main
Net performance on a consolidated basis of accounts as of 1.31.2024. Performance described herein is net of fees and expenses including a 2% per year management fee for the company’s Absolute Return Portfolio Margin Strategy, Absolute Return Reg. T Strategy, the Enhanced Yield Strategy, and a 1% per year management fee for the Money Plus Strategy. Performance for each of the company’s strategies assumes investors have been invested the entire time with no withdrawals.
This was prepared by Horse Cove Partners LLC a registered investment adviser in the state of Georgia. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser.
THIS MESSAGE AND ANY FILES TRANSMITTED WITH IT ARE CONFIDENTIAL AND PRIVILEGED. IF YOU ARE NOT THE INTENDED RECIPIENT, PLEASE NOTIFY THE SENDER IMMEDIATELY AT 1 (678) 905 5723. IF YOU ARE NOT THE NAMED ADDRESSEE YOU SHOULD NOT COPY OR DISCLOSE THE CONTENT OF THIS MESSAGE AND ANY FILES TRANSMITTED WITH IT TO ANY OTHER PERSON.
Internet communications are not secure and subject to possible data corruption, either accidentally or on purpose, and may contain viruses. The content of this message should not be construed as investment advice unless explicitly stated as such in the text of this message. Further, this message should not be construed as the solicitation of an offer to purchase or an offer to sell any securities or other financial instruments, including, without limitation, interest in any private investment managed by Horse Cove Partners LLC or any of its affiliated entities.
This material has been prepared solely for informational purposes only. Strategies shown are speculative, involve a high degree of risk, and are designed for sophisticated investors.
Past performance is not a guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value. The information herein was obtained from third-party sources. Horse Cove does not guarantee the accuracy or completeness of such information provided by third parties. All information is given as of the date indicated and believed to be reliable. The returns are based on the Investment Manager's strategy and the compilation of actual client account trades. The Horse Cove Absolute Return and IRA Return strategies seek to extract absolute returns from the market by trading short volatility option spreads. The Enhanced Yield strategy seeks to achieve a targeted return trading only puts with a high probability of success.
The strategies reflect the deduction of advisory fees and any other expenses that a client would have paid or actually paid. The S&P 500 Index is used for comparative purposes only. The volatility of an index is materially different from that of the model portfolio. The S&P 500 refers to the Standard and Poor's 500 Index which is a capitalization-weighted index of 500 stocks. The index is designed to measure the performance of the broad domestic stock market. The VIX (CBOE volatility index) is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge." Investors cannot invest directly in an index. An index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Option trading entails a high level of risk. The performance numbers do not include the reinvestment of dividends and capital gains because options do not pay dividends. Please read the Characteristics and Risks of Standardized Options, available from the Options Clearing Corporation website: http://www.optionsclearing.com for further details.
02/06/2023
