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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Easterly - Hedged Equity Fund 2026 Q2 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q2 2026 Letter Analysis

Easterly - Hedged Equity Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Easterly - Hedged Equity Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+7.48%

YTD+7.48%

Annualized+7.79%

Positioning StanceNEUTRAL

Market CapLarge Cap

Digest Analysis

Quick Take

"Capturing 73% of market upside with lower volatility as equities rebounded from Q1 uncertainty."

Executive Summary

The Easterly Hedged Equity Fund returned 7.48% in Q2 2026, capturing approximately 73% of the Bloomberg US 500 Index return of 15.61% while maintaining meaningfully lower volatility. Following elevated uncertainty in Q1, equity markets rebounded sharply as the CBOE Volatility Index fell approximately 30% from earlier highs. The recovery was supported by stronger-than-expected corporate earnings, easing geopolitical tensions, and increasing optimism regarding a potential Middle East ceasefire. The Fund's systematic, short-duration hedging strategy adapted throughout the quarter, repositioning approximately every four to five weeks to remain responsive to changing market conditions. Despite the recovery, several risks remain including inflation running above the Federal Reserve's target, elevated equity valuations requiring continued earnings growth, and concentrated market leadership among a small group of companies. The manager believes the Fund's disciplined approach to downside risk management remains well suited to markets characterized by elevated uncertainty and changing leadership, helping investors remain invested through market cycles while seeking attractive long-term risk-adjusted returns.

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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

48%

CautiousHigh

Moderate (48%)

The Fund employs a systematic, rules-based hedging strategy that repositions every four to five weeks, indicating a process-driven rather than high-conviction approach. No individual positions are named or sized. The letter is entirely focused on the hedging methodology and market commentary without discussing specific holdings. The strategy is diversified broad market exposure with systematic risk management overlays. The absence of named positions, the systematic rather than discretionary approach, and the diversified nature of the portfolio all indicate low-moderate conviction. The explanation confirms no specific holdings are discussed, which caps the score below 0.54 per the hard rule.

Growth Outlook

35%

BearishBullish

Bearish (35%)

The manager describes a market recovery with improving sentiment, stronger-than-expected earnings, and easing geopolitical tensions. However, this optimism is tempered by explicit concerns about elevated valuations, inflation above Fed targets, and concentrated market leadership. The language is constructive but cautious, acknowledging the recovery while emphasizing ongoing risks. The balanced tone with multiple risk caveats places this in the mildly positive range rather than meaningfully bullish territory.

Risk Appetite

20%

DefensiveAggressive

Defensive (20%)

The Fund maintains broad equity exposure but employs systematic hedging that is actively repositioned every four to five weeks. The strategy captured 73% of market upside while maintaining lower volatility, indicating a balanced but cautious posture. The emphasis on downside risk management and the hedging overlay suggests a measured risk appetite rather than aggressive deployment. The positioning is tilted toward participation with protection, not maximum long exposure.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

No cash level changes are disclosed in the letter. The Fund maintained broad equity exposure throughout the quarter while the hedging overlay was repositioned systematically. The strategy is described as adapting to conditions rather than deploying new capital or de-risking. The 73% market capture suggests stable net exposure with tactical hedging adjustments. This represents rotation and rebalancing within the hedging framework rather than net deployment or withdrawal of capital. Score reflects neutral activity with slight positive bias from maintaining equity exposure through the recovery.

Forward Guidance

10%

CautiousExpansionary

Cautious (10%)

The manager states they will continue to systematically adapt to changing conditions rather than predict outcomes. The language emphasizes maintaining the existing disciplined approach rather than signaling new deployment or scaling. The phrase 'rather than attempting to predict market outcomes' and focus on systematic repositioning indicates a monitoring stance with no clear directional action bias. This is cautious optionality preservation, not active deployment intent.

Language Signal

25%

BearishBullish

Bearish (25%)

The letter contains balanced directional language. Bullish terms include 'recovery,' 'improving sentiment,' 'stronger-than-expected earnings,' and 'attractive long-term risk-adjusted returns.' Bearish language includes 'elevated valuations,' 'risks remain,' 'concentrated leadership,' and 'ongoing geopolitical uncertainty.' The net balance leans slightly positive given the recovery narrative, but the extensive risk discussion prevents a higher score. The language is more constructive than cautious but not overwhelmingly bullish.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The manager identifies multiple specific risks with meaningful discussion: inflation above Fed targets that may influence monetary policy, elevated valuations requiring continued earnings growth, concentrated market leadership, and ongoing geopolitical uncertainty. Each risk is named and explained with potential implications. The letter devotes substantial space to risk discussion despite the positive Q2 recovery. However, the risks are presented as manageable concerns rather than systemic threats, and the manager maintains equity exposure. This places perceived risk in the moderate range with identifiable, named concerns but not alarm.

Opportunity Density

45%

ScarceAbundant

Selective (45%)

The manager does not characterize the opportunity set as abundant or scarce. The focus is on systematic participation in broad market exposure rather than identifying specific opportunities. The emphasis on selectivity, concentrated leadership, and elevated valuations suggests a more challenging environment for finding compelling ideas. The phrase 'elevated valuations' and focus on risk management rather than opportunity identification indicates a selective rather than rich opportunity environment. The lack of discussion about specific attractive areas or new positions suggests moderate-to-sparse opportunity density.

Time Horizon

60%

Short-TermLong-Term

Multi-Year (60%)

The Fund employs a systematic hedging strategy that repositions every four to five weeks, indicating a short-to-medium term tactical framework. However, the letter emphasizes 'long-term equity values,' 'long-term risk-adjusted returns,' and 'helping investors remain invested through market cycles,' suggesting a multi-year investment horizon for the underlying equity exposure. The combination of short-duration tactical hedging with long-term equity ownership places this in the medium-term range. The quarterly repositioning and focus on near-term volatility management prevent a higher score, while the long-term framing prevents a lower score.