Equity Commentary: As at December 31, 2023

Equity markets seem to be in the throes of maximum exuberance as 2023 draws to a close. Investors have embraced an immaculate soft landing (in the U.S. at least) where inflation has been tamed, the economy is slowing but remains in growth mode, unemployment rates are expected to stay muted at under four percent, the U.S. Federal Reserve (“Fed”) has pivoted policy just in time and is prepared to add significant support in March just when the economy needs it, the U.S. dollar has weakened, taking accident risk off the table (especially in emerging markets) and S&P 500 earnings have bottomed and will likely grow considerably in 2024.


Outlook and Opportunities

Our proprietary economic cycle model continues to ebb and flow, with incoming economic data, between a mild recessionary environment and a reacceleration in developed economies (namely, the U.S.).  Against this, our inflation cycle model points to an ongoing moderation of inflation. Regarding the economic cycle, we are inclined to let the evidence continue to bear out before making more decisive asset allocation / thematic calls with the intent of embracing risk or cyclicality.

We expect the ongoing sensitivity of markets to bond yields to moderate as growth data becomes more important than inflation data.  As it pertains to our equity processes, we believe evidence-based macro views lend to smoother transitions through economic cycle phases and market regimes.


1M (%) 3M (%) 6M (%) 1YR* (%) 3YR* (%) 5YR* (%) Since Inception* (%)
Picton Mahoney Fortified Equity Fund (Class F) 0.83 6.26 4.65 15.12 7.33 11.40 8.13
(Oct. 29, 2015)
Picton Mahoney Fortified Active Extension Alternative Fund (Class F) 3.21 5.80 3.98 10.99 9.35 14.73 11.24
(Sept. 27, 2018)
Picton Mahoney Fortified Market Neutral Alternative Fund (Class F) -0.55 -1.04 0.38 2.83 4.79 7.40 6.98
(Sept. 27, 2018)
Picton Mahoney Fortified Long Short Alternative Fund (Class F) 1.48 2.18 1.79 6.84 8.37 13.87
(July. 7, 2020)


(*) Annualized performance

Source: Picton Mahoney Asset Management

1Microsoft Earning Release FY24 Q1 https://www.microsoft.com/en-us/investor/earnings/fy-2024-q1/press-release-webcast

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This material has been published by Picton Mahoney Asset Management (“PMAM”) on January 19, 2024

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