by Chase Thomas and Harvey Sax
Equity markets have remained relatively range-bound over the past month, with the S&P 500 and Nasdaq trading sideways and slightly lower over the most recent seven-day period. Attention has remained focused on interest rates, including the Federal Reserve’s Jackson Hole statement, recent employment data, and inflation readings. Market-implied odds of a September rate increase have moved from approximately 10% six weeks ago to roughly even currently.
Bond markets have also moved lower amid changing rate expectations, while volatility has declined alongside the broader market.
MTD: Approximately -0.5% to -1%
YTD: Preliminary reporting in progress
The fund is slightly negative month to date, reflecting recent weakness in equity markets and movement in oil prices.
Current positioning remains consistent with a mean-reversion approach, with conservative volatility exposure and more active covered call positioning. Risk management remains focused on maintaining positions at sizes that can be managed through adverse market moves.
MTD: Approximately -0.5% to -1%
YTD: Preliminary reporting in progress
The fund is slightly negative month to date as equity markets have weakened over the past week and oil prices have moved.
The current approach remains conservative on the volatility side and more active on the covered call side. Position sizing continues to be an important component of the risk-management process.
MTD: Approximately -0.5% to -1%
YTD: Preliminary reporting in progress
The fund is slightly negative month-to-date, reflecting recent equity market movement and changes in oil prices.
Current positioning continues to reflect a mean-reversion framework, with conservative volatility exposure and more active covered call positioning. The strategy remains focused on retaining market exposure while maintaining the ability to adjust positions as conditions change.
MTD: Approximately -0.5% to -1%
YTD: Preliminary reporting in progress
The fund is slightly negative month-to-date following recent equity market weakness and movement in oil.
The current positioning remains conservative on the volatility side and more active on the covered call side. The risk-management process emphasizes position sizing that allows positions to be maintained and adjusted through adverse market conditions.
From Harvey’s perspective, current economic conditions appear positive, and current equity market levels are consistent with that view.
Fuel prices have received considerable attention in recent coverage. Based on current observations, fuel prices do not appear to be materially curtailing consumer travel or restaurant spending. Improvements in automobile fuel efficiency over time also provide additional context when considering the effect of fuel prices on consumers.
Across nearly all strategies, Alpha Wealth’s approach incorporates a mean-reversion premise: as markets move further from their prevailing norm in either direction, conditions may create opportunities for positions to revert toward that norm. This premise informs both volatility positions and covered call positioning.
Current positioning is conservative on the volatility side and more active on the covered call side. The process calls for retaining exposure while remaining prepared to reduce it as conditions change, rather than removing exposure in anticipation of a decline. Markets can remain in a directional trend for extended periods, including prolonged stretches without a meaningful change in volatility.
The primary condition being monitored is the path of Federal Reserve policy and its effect on broader market conditions.
Performance and Reporting Note: Fund performance figures are preliminary, unaudited, and reported before applicable fees and do not include incentive fees unless otherwise noted. Official NAV Fund Services statements govern final fund performance reporting. Account-level figures for separately managed accounts, when included, are reported from Interactive Brokers; fee treatment should be verified against the applicable account statements before publication.
The views expressed herein reflect current market commentary and portfolio observations as of the date published and are subject to change without notice. Statements made by portfolio managers represent current opinions based on prevailing market conditions and should not be interpreted as guarantees, forecasts, or assurances of future performance or market direction.
Any performance information shown is preliminary, unaudited, and may reflect results before applicable fees, expenses, or final administrator reporting where noted. Actual investor results may differ based on fee structure, timing of contributions or withdrawals, and other account-specific factors.
This material is provided for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security, fund, or investment strategy. Past performance is not indicative of future results. All investments involve risk, including possible loss of principal.
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