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Typhon’s Argos Tactical Trading Fund Has Launched

The Argos Tactical Trading Fund is a product that Typhon organically built towards since our founding in 2008. It builds upon the forward-looking risk weighting allocation methodology we use in our successful Argos Tactical Trading Swap.

The Fund combines Typhon Capital Management's tactical trading funds and SMA strategies to give investors a well-balanced, diversified portfolio. It uses an algorithmic risk-weighting methodology combined with investor-driven portfolio constraints and only allocates its underlying investments to Typhon’s managers. Argos is designed to provide returns uncorrelated to stock, bond, and real estate markets as well as other hedge funds and CTAs.

Argos does not charge platform fees, has virtually no equity beta, and is designed to provide a positively skewed return profile. It has a negative correlation to equities in stress periods along with an investor-friendly fee structure where Typhon absorbs the vast majority of incentive fee netting risk.

The Fund has launched with an ERISA-compliant Cayman Feeder into a US Master Fund on our Argos Alternative Funds Platform. Subscriptions are now open for other investors with some capacity remaining in our seed investor share class.

 

Typhon Tactical Trading Swap Marks One Year Live Trading

Typhon’s Argos Tactical Trading Swap on the Morgan Stanley ALPHAs platform just marked its 1-year anniversary of live trading. The Swap consists of 6 Typhon SMA strategies with an average of 75% nominal commodity exposure, cross margined in a very cash efficient manner and a netted fee structure. It will be one of the primary engines for enhancement of the GSCI in the ’40 Act fund we are preparing to launch.

 

Typhon Tactical Managed Futures Fund Preparing for Launch

Typhon Capital is preparing to launch a ’40 Act fund early in the first quarter of 2022. The objective of the fund is to protect against inflation during periods with rising commodity prices and offer absolute return in times of falling prices. Typhon is partnering with Sky Rock Investment Management for its first offering to institutional investors with GSCI beta mandates as well as retail investors.

The Typhon Tactical Managed Futures Fund will use a smart beta methodology to vary its nominal exposure to the GSCI from 1x to 0.25x based on the commodity cycle, then layer that exposure with between 1x and 0.5x nominal exposure to Typhon’s Argos Tactical Trading Swap, along with a 5% allocation to Bitcoin futures, and 75% of the fund’s cash being invested in fixed income. Please click here for a thorough summary from Hedge Fund Alert.

 

10th Anniversary of MF Global Bankruptcy

We would like to mark a seminal point in not only Typhon’s history, but market history, as well. The MF Global bankruptcy on Halloween 2011 shook the industry to its very foundation and left many account holders wondering if they would ever see their funds again. At the time, Typhon had a staff of 3, with both James Koutoulas and Diana Rydbeck standing up on behalf 38,000 victims to found the Commodity Customer Coalition along with John Roe. The trio stood up for the entire futures industry in its greatest crisis and prevailed.

 

Thank you to our Advisory Board Member, Jeff Carter, for this touching reminiscence in the link below. An acknowledgement to all those affected by MF Global’s collapse and their fortitude to overcome such a malevolent event.

 

Typhon Hosting an Art Basel Celebration this Wednesday

Since moving our headquarters to Miami Beach shortly before the pandemic, Typhon has taken a strong community leadership role hosting many events for new residents of the financial community to make friends and build relationships in the fast-growing greater Miami area. We are excited to be a part of Art Basel Miami, which is one of the world’s first major events marking a return to normalcy, so we are taking our hospitality up a notch above our informal monthly events. Please join us this Wednesday December 1st and JOIA Beach 5-8pm.  

 

Typhon Tactical Investor Forum @ iConnections Miami Beach January 25, 2022

iConnections and Typhon Capital Management are pleased to announce a special Forum at the iConnections Global Alternative Investment Conference at Fontainebleau Miami Beach, focused on CTAs, tactical, quant, and crypto-based trading. The Typhon Tactical Investor Forum will be hosted as part of Leadership Day on January 25, 2022.

The Forum will feature nine separate sessions, covering topics such as: Allocating to Tactical Managers; Diligencing Emerging Managers; Inflation, Cryptocurrency, and Commodities; Tactical Trading and Liquid Alternatives; Quants and Stimulus; and Volatility Arbitrage. The event will also include small group meetings and roundtable networking between allocators and fund managers.

Click Here to register for Typhon Tactical Investor Forum @ iConnections Miami Beach

 

October Monthly Net Performance

Multi-Strategy Swap on Morgan Stanley's ALPHAs Platform (1x)

Trade Generation

October

YTD

Argos Tactical Trading Swap

Multi-Strategy

-0.61%

10.16%

Funds on our Argos Alternative Funds Platform

Trade Generation

October

YTD

Leonidas Cryptocurrency

Multi-Strategy

-4.82%

116.72%

Leonidas Macro

Multi-Strategy

-1.82%

37.18%

Vulcan Metals

Discretionary

-0.66%

2.04%

 

 

 

 

Separately Managed Accounts (1x)

Trade Generation

October

YTD

Zephyrus Livestock

Discretionary

-0.10%

23.81%

Leonidas Energy

Discretionary

-0.90%

6.80%

Cartesio Quantitative

Quantitative

0.74%

3.37%

Plutus Grain

Discretionary

-1.66%

4.87%

Vulcan Metals

Discretionary

-0.32%

-2.00%

Mercurio Quantitative

Quantitative

-3.68%

-4.43%

Clients may choose to use notional funding when investing in Separately Managed Accounts or Swaps to amplify both the risk and return of the program. Please see "Risks Inherent in Notional Funding" in each of Typhon's 4.7 Exempt Disclosure Documents for a more detailed explanation.

Click Here for Typhon's Firmwide Deck

Please see each strategy's one-page performance summary and disclosure document for detailed information about the above calculations. Fund performance is an estimate net of fees and expenses and will have an updated tear sheet, if necessary, later in the month.  Futures trading is inherently risky and past performance is not necessarily indicative of future returns. Typhon Capital Management only provides services in the derivatives markets for Qualified Eligible Participants and non-US Investors. The Argos Tactical Trading Swap is only investible by Non-US Investors and Eligible Contract Participants as defined by the Dodd-Frank Act. 

 

Per Manager Commentary

Leonidas Cryptocurrency Fund fell -4.82% in October, up +116.72% YTD.

Crypto is facing the same dilemma as broader macro markets. While some of the most promising developments are happening right now, the number of projects and shiny things that captured and diluted capital inflows may be overwhelming the bull market into a short-term shake out and correction. Many of these projects are largely window dressing and of no fundamental value. Getting rid of them will help foster a healthier base, from which we expect Ethereum and related Smart Contract names to rally.

 

The Leonidas Macro Fund was down -1.82% in October, +37.18% YTD.

 

Markets are struggling to identify the dynamics of a very healthy economy, worrisome inflation prints, and the specter of fiscal tailwinds becoming headwinds in 2022.

 

Some very brief snapshots that may look like stagflation because of this brew could scare many, setting up a possible correction from overbought territory in equities. However, when the dust settles, it is our continued belief that inflation, while high relative to recent history, will remain under control with growth slowing further. An accommodative Fed will pay more attention to unemployment and long-term rates for an indication as whether to raise rates. We believe that hot CPI prints and shorter-term indicators will be of minor influence in the decision on rate increases. Therefore, we expect bonds to rally after the dust settles and equities to find their footing after a shake out.

 

Much of the tumult today may just be the result of receding lines of liquidity, the army of retail investors being pulled and diluted by a multitude of shiny objects put in front of them with a diminishing fiscal wave that has helped prop them all up.

 

Our Vulcan Metals Fund was down -0.66% in October, +2.04% YTD and the scaled-down SMA version, Vulcan Metals Strategy, fell -0.32% in October, -2.00% YTD. October saw a relatively flat month where we began to establish longer term long positions with inflation now becoming a national concern. Gold and silver remain steady while copper battles between macro concerns vs. short term supply issues. We have begun our process of setting spread positions for 2022. 

 

The Zephyrus Livestock Strategy fell -0.10% in October, +23.81% YTD. The livestock sector has seen volatility come back in November and we expect this to continue into the year end. Cattle saw packers upping their bids going into November as a rush to fill beef demand with feedlots has fewer cattle available. This was the main driving force fueling an upswing in cash prices. We should see cattle supplies beginning to increase, coupled with a minor setback in prices until the end of the year.

 

Hogs had a wild ride as we entered and exited October. November has been no different. Focus has been on the line speed issue at packer plants and the Prop 12 issue in California. African Swine Fever continues to be a major problem in Germany and China.

Beef and Pork prices have seen a pullback in November so far, which may have been driven by consumers balking at the high prices of meat. As the saying goes, high prices cure high prices, and we might have seen just that scenario play out in the past couple of months. We pointed out food inflation earlier in the year and now it has become the main topic of discussion.

The livestock sector will continue to be volatile in 2022, with price swings that will be short in duration with fewer long-term price trends.

The Plutus Grain Strategy was down -1.66% in October, +4.87% YTD. The November USDA crop report was viewed neutrally, which was a friendly surprise as market participants were expecting bigger numbers, especially in soybeans. Weather continues to be good in South America but southern Brazil and Argentina are starting to face drier conditions, which is typical La Niña. Australia has been much too wet and with a wheat crop nearing harvest, the market is not waiting around to see if quality becomes a concern. Many of the spreads we like are getting in front of the cash; we have dipped our toes into a couple of them, however they are going against us at the moment. We may get stopped out soon, but feel like at some point, these could be sizable winners next year.

Typhon’s Leonidas Energy Strategy lost -0.90% in October, +6.80% YTD. We watch Europe and China closely for demand relief in a tight supply market. There may be a good chance the energy market tourists get shaken out on a leg lower. This dip will likely morph into a buying opportunity in WTI and BRT spreads, but we are staying out of it for now and waiting for further macro and technical clarity.

The Cartesio Quantitative Program returned +0.74 % in October, +3.37% YTD.

Global equity markets gained in October, supported by overall positive corporate earnings and by easing of fears around China’s property market. The commodity sector posted some gains while the energy component also performed strongly

Our strategies on equity indexes generated a strong positive return during the month, while VIX gold strategies (the latter especially) suffered from high intraday turbulence.

In October, our meta-model confirmed persistent stationarity regarding some commodity sectors, leading us to allocate further exposure to them.

Mercurio Quantitative Program was down -3.68% in October, -4.43% YTD.

 

Vulcan Metals Note via the Austrian Stock Exchange

Given the similarity of our Vulcan Metals Fund's 9%+ annualized return stream at 5% volatility to pre-QE fixed income and its extremely low cross-correlation to other asset classes, we have launched an exchange-listed note wrapper on the Austrian Stock Exchange via ISIN: XS2324777098 - Common Code: 232477709. The note was structured in conjunction with U.K.-based Sequence Capital, a private lending platform. The notes benefit from institutional counterparties such as Bank of New York and are centrally cleared by Euroclear / Clearstream.

The Vulcan Metals Note gives European and other non-US investors a much easier investment process and, in many cases, preferred tax treatment to investing in a Cayman feeder. The minimum investment is $125,000 per note and they are available in increments of $1,000. Please contact us for more information.

 

Conferences/Travel

Personnel from Typhon will be attending the below events. You may also click here to schedule a phone or virtual meeting with our management team.

Venue

Date

New-to-Miami Finance Happy Hours hosted by Typhon and iConnections

November 3, December 1, January 5th

iConnections Miami Beach

January 24-28, 2022

 

Daily Estimates for all Strategies are on our Website

Given the recent volatility, especially in cryptocurrency and energy, we’d like to remind you that Typhon is extremely transparent and posts daily estimated rates of returns on our website for all of our strategies and funds here.

Update your subscription preferences here

 

You may view previous newsletters from all of Typhon's strategies here.

 

Best regards,

 

Jasmina Midzic
Director, Investor Relations
Typhon Capital Management
+1.312.836.1180
www.typhoncap.com

Typhon Capital Management, LLC is a Member of the National Futures Association and registered as a Commodity Pool Operator and a Commodity Trading Advisor and only provides services to Qualified Eligible Participants as defined in section 4.7 of the Commodity Exchange Act.

This email and any attached document is being furnished to you on a confidential basis and may not, without prior written consent of Typhon Capital Management, LLC be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the intended recipient of this email.  This email, including any attached document, is neither an offer to sell any securities, nor a solicitation of an offer to invest in any fund or managed product. Past performance is not necessarily indicative of future returns.

Typhon Capital Management, LLC is an Appointed Representative of Starmark Investment Management Limited which is Authorised and Regulated by the Financial Conduct Authority.

TYPHON CAPITAL MANAGEMENT, LLC IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. TYPHON CAPITAL MANAGEMENT, LLC HAS ENGAGED OR MAY ENGAGE IN UNDERLYING OR SPOT VIRTUAL CURRENCY TRANSACTIONS IN THE LEONIDAS CRYPTOCURRENCY PROGRAM AND LEONIDAS CRYPTOCURRENCY FUND, ALTHOUGH NFA HAS JURISDICTION OVER TYPHON CAPITAL MANAGEMENT, LLC AND THE LEONIDAS CRYPTOCURRENCY PROGRAM AND LEONIDAS CRYPTOCURRENCY FUND, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY FOR UNDERLYING OR SPOT MARKET VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS. YOU SHOULD ALSO BE AWARE THAT GIVEN CERTAIN MATERIAL CHARACTERISTICS OF THESE PRODUCTS, INCLUDING LACK OF A CENTRALIZED PRICING SOURCE AND THE OPAQUE NATURE OF THE VIRTUAL CURRENCY MARKET, THERE CURRENTLY IS NO SOUND OR ACCEPTABLE PRACTICE FOR NFA TO ADEQUATELY VERIFY THE OWNERSHIP AND CONTROL OF A VIRTUAL CURRENCY OR THE VALUATION ATTRIBUTED TO A VIRTUAL CURRENCY BY TYPHON CAPITAL MANAGEMENT, LLC.

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