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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Upslope Capital Management 2024 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Upslope Capital Management)

Primary Source Intelligence • Q1 2024 Letter Analysis

Upslope Capital Management Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Upslope Capital Management. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+12.1%

Digest Analysis

Quick Take

"Added chocolate plays Barry Callebaut and Hershey to capitalize on cocoa crisis, expecting large players to gain share and benefit from eventual price reversion. Defense holdings positioned for geopolitical tailwinds."

Executive Summary

Upslope delivered solid Q1 performance with +5.5% returns despite lagging long-only indexes, driven by strong long performance partly offset by shorts and hedges. The fund maintains 84% average net long exposure with 143% gross exposure, reflecting abundant opportunities on both sides. Key portfolio moves included exiting Intel and adding two chocolate stocks - Barry Callebaut and Hershey - positioned to benefit from the unprecedented cocoa crisis. The manager believes large players will gain market share as smaller competitors struggle with extreme commodity prices, while eventual cocoa price reversion should provide strong tailwinds. Defense holdings including Kongsberg, CACI, and Chemring are positioned for geopolitical tailwinds. The portfolio remains well-protected against macro and geopolitical shocks while maintaining exposure to quality, defensive businesses trading at attractive valuations. With serious market cracks developing recently, the manager sees potential for defensive stocks to outperform after years of underperformance, though remains open-minded about market direction.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

68%

CautiousHigh

Moderate (68%)

Manager demonstrates moderate-high conviction through concentrated portfolio with 15 named positions and detailed thesis explanations for new chocolate investments. Specific position sizing mentioned (25% core longs, 35% tactical longs) and willingness to exit Intel shows active management. However, hedged language and defensive positioning prevent higher score.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Manager acknowledges strong market consensus through election but notes serious macro/geopolitical risks lurking. References serious cracks developing in markets recently and stubbornly sticky inflation. Cautious tone with some optimism about defensive factor rotation but overall wary of market conditions.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Fund maintains 84% net long exposure with 143% gross exposure, indicating moderate risk appetite. Added new positions in chocolate stocks while maintaining hedges. Positioning reflects perceived opportunities on both long and short sides but remains defensive with protection against macro shocks.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

Manager added two new chocolate positions (Barry Callebaut and Hershey) while exiting Intel, indicating selective deployment. No cash level changes mentioned but portfolio activity suggests modest net deployment into new themes while maintaining defensive hedges.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

Manager states remaining open-minded about the year ahead with no clear directional bias. Notes excitement about portfolio prospects but emphasizes defensive positioning. Selective deployment in chocolate theme but no aggressive capital deployment signals.

Language Signal

0%

BearishBullish

Bearish (0%)

Balanced language throughout with equal emphasis on opportunities and risks. Uses terms like solid performance and attractive valuations alongside warnings about lurking shocks and market cracks. Defensive positioning language balances optimistic investment thesis language.

Perceived Risk

72%

Low RiskElevated

Elevated Risk (72%)

Manager explicitly states serious potential macro and geopolitical shocks continue to lurk and notes serious cracks developing in markets. Discusses stubbornly sticky inflation, rising geopolitical tensions, and maintains defensive positioning with hedges. High awareness of systemic risks throughout letter.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager states there continues to be plenty to do on both long and short sides of the portfolio, indicating good opportunity set. Added new positions while maintaining shorts across multiple categories. However, selective nature and defensive positioning suggests moderate rather than abundant opportunities.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Manager discusses multi-year themes like cocoa crisis resolution and defense sector tailwinds. References decade-low valuations and efficiency efforts providing tailwinds for years to come. However, some catalyst dependency around cocoa price reversion and election cycles suggests medium-term rather than permanent capital approach.