| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.36% | 0% | 0% |
The Easterly Hedged Equity Fund delivered strong relative performance in Q1 2026, returning 0.00% versus -4.67% for the Bloomberg US 500 Index while avoiding over 60% of the index's peak-to-trough decline. The Fund's systematic, shorter-dated hedging approach proved particularly effective in a complex market environment marked by geopolitical tensions and volatility spikes. The quarter began with expectations of rotation away from AI-leading mega-cap companies toward broader cyclical exposure, which initially stabilized volatility. However, escalating Middle East tensions and concerns over oil shipment disruptions through the Strait of Hormuz caused crude prices to surge and equities to decline persistently. The Cboe Volatility Index rose from mid-teens to the 30s, creating elevated hedging costs but allowing the Fund to monetize volatility effectively. Federal Reserve easing expectations were repriced as inflation concerns re-emerged, with 10-year Treasury yields reversing higher to 4.3%. The Fund's progressive hedging structures reduced beta during drawdowns while contributing to income, positioning it well for continued market uncertainty despite more balanced equity valuations.
The Easterly Hedged Equity Fund employs a disciplined approach to dynamic beta management and shorter-dated hedging structures to provide downside protection while maintaining market participation.
U.S. equity valuations have moderated from elevated levels and appear more balanced relative to expected 2026 earnings, though uncertainty remains. The Fund remains well-positioned with its focus on dynamic beta management and disciplined hedging to support participation in markets while enhancing resilience across market conditions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| May 4 2026 | 2026 Q1 | - | AI, Beta Management, Geopolitical, Hedging, oil, risk management, volatility | - | Easterly's hedged equity strategy delivered strong downside protection in Q1 2026, avoiding 60% of market decline through dynamic beta management and shorter-dated hedging. Geopolitical tensions and oil price surges drove volatility spikes that the Fund monetized effectively. With equity valuations now more balanced, the strategy remains well-positioned for uncertain markets ahead. |
| Jan 22 2026 | 2025 Q4 | JDIEX | Beta, Hedged Equity, Options, risk management, S&P 500, volatility | - | Easterly Hedged Equity Fund delivered 11.87% returns in 2025 while maintaining significantly lower volatility than the S&P 500 through systematic options hedging. The Fund captured 66% of market upside with 48% of index volatility, successfully navigating elevated valuations and policy uncertainty while positioning for continued beta management across changing market cycles. |
| Oct 15 2025 | 2025 Q3 | ^GSPC | AI, Fed, Hedged Equity, Mega Cap, Rate Cuts, technology, volatility | - | Easterly Hedged Equity delivered 4.98% returns in Q3 with 70% market participation and half the volatility of the S&P 500. Fed rate cuts supported AI-driven mega-cap leadership, but stretched valuations and narrow breadth create vulnerability. The fund's systematic volatility monetization and flexible beta management provide valuable downside protection while capturing upside in an increasingly concentrated market. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
VolatilityThe Fund's systematic, shorter-dated hedging approach proved effective as implied volatility moved higher with the Cboe Volatility Index rising from mid-teens into the 30s during periods of stress. The hedging structures respond progressively, reducing beta early in drawdowns and contributing to income as markets remain under pressure. |
Volatility Hedging Options VIX Risk Management |
AIThe year began with expectations of a rotation away from highly concentrated, mega-capitalization companies that are leaders in the artificial intelligence boom and toward broader cyclical exposure. This broadening initially helped stabilize realized volatility even as equities softened. |
AI Mega Cap Technology Rotation | |
OilAs concerns around the blocking of oil shipments through the Strait of Hormuz intensified and crude oil prices surged, equities began a more persistent decline. Expectations of continued Federal Reserve monetary easing were repriced sharply as inflation concerns re-emerged. |
Oil Geopolitical Inflation Energy | |
| 2025 Q4 |
AIEdgewood maintains significant exposure to AI infrastructure buildout through holdings like NVIDIA, Broadcom, and ASML. The firm views AI as creating new product opportunities and efficiencies, particularly highlighting Axon's Draft One AI tool for police report generation. However, they note concentration risks in the Russell 1000 Growth where six AI-related companies account for 65% of 2025 returns. |
Infrastructure Semiconductors Software Data Centers Cloud |
GrowthThe portfolio delivered 29% average YoY EPS growth in Q3 2025, significantly outpacing the S&P 500's 8% growth. Edgewood emphasizes their focus on companies with growing cash flow, high profit margins, and durable competitive advantages. They organize holdings into three growth buckets ranging from 10-15% to 21%+ estimated long-term EPS growth. |
Earnings Cash Flow Margins Competitive Advantage | |
QualityEdgewood's investment approach centers on high-quality companies with financial model strength, market-leading positions, and durable competitive advantages. They seek companies with growing cash flow, high profit margins, and the ability to maintain pricing power while protecting market share through unit volume increases and fee-based business models. |
Margins Cash Flow Market Leadership Competitive Advantage | |
| 2025 Q3 |
AIArtificial intelligence continues to drive productivity gains and support corporate earnings, with AI-driven names powering the market rally alongside mega-cap technology stocks. AI remains a key structural driver in the economy. |
Artificial Intelligence Productivity Technology Mega Cap Earnings |
VolatilityElevated volatility persisted alongside strong index performance, with the CBOE Volatility Index curve remaining steep. The fund's systematic approach allowed monetization of volatility opportunities while maintaining protection against potential declines. |
CBOE VIX Hedging Protection Systematic | |
RatesThe Federal Reserve finally delivered an interest rate cut in Q3 2025, marking a turning point. Fed easing through insurance cuts or broader programs offers market support, though the impact on broadening equity participation remains limited. |
Federal Reserve Rate Cuts Monetary Policy Easing Support |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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