Opportunities Funds Commentary

2 Queen Street East, Twentieth Floor
Toronto, Ontario M5C 3G7
www.ci.com
Telephone: 416-364-1145
Toll Free: 1-800-268-9374
Facsimile: 416-364-6299
UPDATE
Trident Investment Management, LLC
Opportunities Funds Commentary
December 31, 2013
Performance Discussion
Equity markets remained exuberant in the last two months of 2013, much as they had through most of the
year. The S&P 500, the MSCI Europe and the Nikkei indices all rose 5.2%, 1.8% and 13.7% respectively
over the period. Bond markets were generally weak however, with rates on the U.S. 10-Year Treasury rising
0.25% to end the year at 3.28%. The U.S. dollar was largely stable over the period appreciating against most
emerging country currencies and the Yen, but weakening against the Euro. Credit markets in the developed
world remained buoyant, with spreads finishing at close to all-time tight levels, even as the developing
country credit spreads remained relatively wide. Commodities were mixed. Gold was down 9.2% over the
last two months, while oil rose 2.2%.
Our funds profited in November but suffered marginally in December, eking out a small gain for the two
month period. Our long positions in Japanese equities were the primary contributors to performance. Our
equity hedges in the U.S. against our net long Japanese position hurt performance. Our long positions
in non-U.S. fixed income (taken largely via options) bled premium, and our credit book suffered as well,
detracting from our Japanese performance.
We did not make many changes to our portfolio over the last several weeks. We trimmed risk a little over
the last two months to limit our losses while markets exhausted their euphoria. We are actively beginning to
add to some of our core positions because we believe that conditions today are almost as stretched in many
markets as they were at the start of 2007. We fully expect that 2014 is going to be a year that is eventful in
the extreme.
The Year in Review
2013 was a year for the history books at least when it comes to the financial markets. In particular:
•The
equity markets in developed countries soared, with the U.S., U.K., Japan and Europe rising 29.6%,
14.4%, 56.7% and 16.4% respectively.
•The bond markets sold off, especially in the U.S., even though the dreaded tapering of bond purchases by
the U.S. Federal Reserve largely did not materialize. The U.S. 10-year Treasury yield rose a significant 0.89%
off the lows to end at 3.28%. The U.S. bond market selloff was mirrored globally despite the fact that growth
for 2013 was much weaker than analysts had expected at the start of the year. In fact, the only bond market
that did not experience a huge selloff was the one which saw the best economic growth and inflation pickup
in years – Japan.
•The
Euro emerged as one of the strongest developed market currencies of the year, despite showing the
worst growth as a region in the world. The threat of Outright Monetary Transactions (OMT) by the region’s
central bank seemed to have been enough to stave off any concerns of crisis.
•Gold
had one of its worst years in recent memory being down 28.8%. Gold stocks did even more poorly,
being down 54.0%. This was despite the aggressive monetization embarked on by Japan to generate inflation.
2013
DEC
•The currencies, credit, and in some cases, the equity markets in the developing world all suffered. Despite
most developing nations sitting on record foreign reserves with typically floating exchange rates, there is
pervasive talk of an emerging market crisis.
UPDATE
The year represented the triumph of central banking prowess over fundamentals. Interest rates rose despite
weaker growth than expected due to the fear of Fed tapering. Equity markets, especially in the developed
world, rallied despite rising rates and disappointing earnings because market participants were convinced the
central banks would support them. In fact, the entire rise in U.S. equity markets came from multiple expansion
rather than earnings in 2013. Markets where central banks were perceived as being less interventionist however
reflected a more grim reality. Most commodities were weak reflecting the slower global economy relative to
expectations for the year. Despite government dysfunction in most of the developed world, traditional safe
havens, such as gold, suffered. Countries that resisted any form of Quantitative Easing (QE) and persisted
with sensible policies (Norway, Canada and Australia) saw significant weakening of their currencies against
those which had adopted aggressively easy policies such as the U.S. and the U.K.
The markets’ belief in the omnipotent central banker, however, can only persist for so long. Either reality
has to catch up with market expectations or the markets need to adjust to reality. A continuation of the
divergence between fundamentals and markets requires more monetary medicine. 2014 looks to be the year
where a number of countries with interventionist monetary policies might be forced to pull back for political
reasons. As such, we expect that the markets will provide huge opportunity – several big macro adjustments
are virtually certain with the change in regime we expect.
We discuss the political situation in the various major regions of the world in greater detail below and then
take up the investment opportunities presented.
Market Outlook
In prior communications we have discussed why the policies being followed in the world are unlikely to
generate sustainable growth. The low interest rates maintained by policymakers since the late 1990s resulted
in over-investment on a huge scale in the developed world, a hangover that is still to be worked off given the
collapse in demand that occurred after the 2007-2008 crisis. Even after 2008, China has continued to invest
at a heroic pace with fiat credit making the problem of global overcapacity more acute. These factors together
make an investment led growth phase unlikely. Consumer incomes have been decimated in the developed
world by high unemployment and in the developing world by rampant inflation. Moreover, consumer
balance sheets in the developed world were already in poor shape after the housing bubble burst and have
yet to recover especially for the middle and lower income groups which have the highest propensity to
consume. As such, a consumer-led recovery seems improbable. The fiscal situation in most of the developed
world is so poor that further significant stimulus would prove difficult if not impossible. And, of course,
global net exports sum to zero. Barring perhaps some dramatic fiscal stimulus in China, the world seems
devoid of policy alternatives to stimulate growth. Most of these challenges to policy have been operative since
2009, and serve to explain why global growth has remained so weak in the so-called “recovery” after 2009.
Given the scale of the global problem, over the last few years most countries in the developed world and
some major developing nations such as China have simply continued with the crisis fighting policies that
were instituted post 2008. These measures took different forms in the world’s major economies and were
intended initially only to stave off financial collapse and depression. In the U.S., the primary policy was QE
by the Fed where it purchased large quantities of financial assets with a view to stabilizing their prices and
2013
DEC
UPDATE
restoring confidence to markets. In China, the solution was also monetary policy where banks were ordered to
increase lending dramatically to boost growth. In Europe, which plunged into its sovereign debt crisis in 2010,
the solution so far has also been monetary with the European Central Bank (ECB) threatening to purchase
financial assets under the so-called OMT program to stabilize markets.
Markets responded enthusiastically to the monetary policies instituted by global policymakers. The received
wisdom is that the central bankers will eventually prevail where it comes to sustainable growth. Accordingly,
markets have priced in the happy state that will come to be at some indeterminate point, secure in the belief
that any downside risks to asset prices will be backstopped by the authorities. While many observers would
agree that the growth benefits of these policies have been minimal, they would nevertheless argue that there
is no better alternative; thus they expect to continue these policies until something positive does happen. We
will consider here the question of how long these policies can actually be sustained and what, if any, are the
constraints to continuing.
While there is considerable public debate on the question of just how much the monetary policies of the last
few years have actually helped growth, there has been much less focus on their income distribution effects
which we believe have been substantial. The policies followed since 2009 have benefited a very small group
of elites in the countries involved, while largely bypassing, or even hurting, the majority. The latter group
is getting increasingly restive about a crisis that from their eyes has not really ended. As the majority, their
legitimate grievances are of considerable political concern. We believe that the ultimate constraints to the
monetary injections globally that have continued so far will be political – at a certain point, the governments
have to stop to placate the majority. We expect 2014 to be a watershed year in which a number of countries
are forced to end their monetary injections because of political reasons. Given the markets’ almost exclusive
reliance on the monetary medicine, such a shift will have far-reaching implications and correctly forecasting
the same will present the best investment opportunities.
We consider below in greater detail the situations in the major monetary actors in the world.
1. Income Divergence and Politics in the U.S.
The move by the Fed to QE in March 2009 was entirely warranted – it represented an attempt to buy time
and restore a semblance of normalcy to the financial system, while more urgent solvency and systemic reform
issues were addressed. The U.S. achieved its initial goal for QE. By early 2010, the prospect of a total financial
collapse had been averted and the country had bought time to address its financial system problems.
Instead of taking the decisive steps needed to address financial stability issues properly after 2009, the U.S.
instead actually relaxed a number of the rules under which the financial firms operated. Consequently, the
largest of these institutions instead of growing smaller and more manageable, actually expanded in size by
about 40%. Even worse, most of the country’s resources and attention were squandered on the financial
system in attempts to ensure its continued prosperity, rather than with any genuine growth policy that might
have ensured a repair of the fragile balance sheet of the post-crash U.S. consumer.
Not surprisingly, since 2010 the banks and other financially connected firms have been hugely profitable.
Corporate entities with big borrowing needs saw windfall gains from drastically lowered financing costs.
Even companies with limited funding needs exploited the record low rates to leverage their balance sheets
and work financial magic by buying back their stock and goosing earnings per share. The insiders that
2013
DEC
could access cheap finance or profit from financial legerdemain went from being the hyper-leveraged
incompetents which they most undoubtedly were during the 2007-2008 crisis years, to becoming the most
powerful interest group in the U.S.
UPDATE
The QE policy created its share of victims as well. Even prior to QE, rates had been reduced to virtually zero
for short term funds. As such, many conservative savers were denied interest income which went instead
to help the bankrupt financial system recover from its prior excesses and incompetence. As QE continued,
the primary impetus that it provided was through asset price inflation to borrowers who could borrow at the
close-to-zero interest rates that were only offered to the very best credits or to the well-connected. These
opportunities were effectively unavailable to the vast majority of the U.S. population, especially to the
average homeowner who was underwater on his mortgage, or the income earner who did not own much in
the way of assets.
The facts on the skewed income distribution in the U.S., especially post 2009 are rather startling. The top
10% of the U.S. population controls almost 80% of the country’s financial assets, therefore enjoying the lion’s
share of the gains from asset appreciation. Prices for housing, the most important asset that lower income
earners possessed, are still much lower in most of the U.S. than the lofty levels reached in 2006 despite five
years of QE. Most strapped homeowners in any event cannot get credit at all, even when they are no longer
in negative equity positions. The picture is even worse when one considers the income effects of QE. Real
median income has declined in the U.S. since the 2007-2008 crisis and is almost 10% below levels hit in
1999. In fact, a recent Oxfam report on global poverty pointed out that the richest 1% captured fully 95% of
the gains from growth since 2009 while the bottom 90% actually became poorer. Over the medium term,
the middle and lower income groups have lost out considerably in relation to the wealthy, even in income
terms. Thus, since 1967, the middle and lower income groups have seen an income increase of about 19%
whereas the rich have seen their income go up about 67% - a trend that has only intensified since 2009.
Given all these facts, it is not surprising that a recent poll by Fox News indicated that 74% of Americans
believe that the U.S. is still in a recession.
The problem with the wealth and income divergences is that they have occurred in a period of unprecedented
stimulus and supposed growth. The unbalanced distribution of growth especially since 2009 means that the
U.S. economy is unlikely to see a more broad-based consumer led recovery. Even worse, with free trade
and a world that it is itself awash in excess capacity, the future for the U.S. middle and lower classes appears
bleak. The more this pattern continues, the worse things will get for the lower income groups with more
people pushed into social support programs such as welfare, Medicaid and unemployment insurance. The
longer the QE policy continues, the bigger these social programs and the structural U.S. budget deficit will
have to become. With continued QE, the U.S. is inexorably creating a growing dependent class that will
permanently require government support.
The political gridlock we observe in the U.S. results from the competing agendas of the majority that has
lost out in the last decade and the elites that have benefited and continue to benefit after 2009 thanks to
QE. The 47% of the U.S. that receives government benefits that exceed their taxes (from Mitt Romney’s
unfortunate campaign speech) want more benefits and even lower taxes. The wealthy 10% (or really 1%)
want unchanged (or lower) taxes, a continuation of current policies and a reduction in the size of the
welfare state. The middle class (the middle 43% not captured in the above two groups) is caught in the
relentless treadmill of lower real income and a falling standard of living.
2013
DEC
UPDATE
The elites have used their wealth to lobby politicians for a reduction in the size of the welfare state, even
suggesting a lowering of taxes in the process. The lower income groups have their representatives clamoring
for more governmental support in the interest of fairness. The net result of these divergent views has been a
fractious Congress that has trouble even passing a simple annual budget. With legislative inaction, the only
source of “support” for the U.S. economy has become the Fed which, not surprisingly, has continued its QE.
What is unfortunate is that the longer that QE continues, the worse the income divergences get and more
fractured the legislature becomes. It is fair to say in this context that, at least for now, the entire political
process has effectively been captured by the Fed acting on behalf of the financial elites.
What is urgently needed now is a complete reworking of U.S. fiscal priorities to ensure both reduced
expenditure and higher taxes on the wealthy. The policies that have to be adopted will be unpopular to all
interest groups in the U.S., but are nevertheless essential for long-term fiscal stability. A total termination
of QE by the Fed could well force such action. Barring that, there is little chance of this occurring except
through a dramatic upheaval in U.S. politics.
Our analysis suggests that there is little likelihood of any long-term improvement in the U.S. fiscal situation
in the medium term. Deficits are likely to continue and if anything increase, over the next several years. In
fact, interest received by the Fed on its holdings of U.S. Treasuries is rebated back to the Treasury as “income”
which means that on debt held by the Fed the U.S. Treasury effectively pays a zero interest rate. If the Fed
tapers aggressively now, the U.S.’ cost of funding and its deficits will increase because the less the Fed buys,
the more the U.S. will have to pay market interest rates on debt.
We believe that the Fed has locked itself into a painful choice. If it does taper aggressively, the bond markets
could sell off to the point where any economic recovery might be crushed. If it does not taper, it is contributing
directly to the skewed income distribution and the divisive politics. The latter outcome represents the lesser
of two evils from the Fed’s point of view simply because few people even understand its responsibility in this
context. As such, we believe that the Fed is unlikely to taper aggressively this year.
Our conclusions for the U.S. are the following. First, growth will remain weak and far from sustainable. Next,
fiscal deficits will continue to remain high, possibly rising even more with Obamacare. And finally, the Fed
may want to taper aggressively, but will most likely be unable to.
2. Investment and Government dissension in China
In early 2009, the Chinese government engineered a dramatic increase in credit by fiat. The credit was forced
directly into various investment projects without much regard to their profitability, and much of it also found
its way into the real estate market. This meant an acceleration of investment in a country that was already
over-investing, as well as a rise in real estate prices and new construction. The Chinese policy was different
from that in the U.S. because it concentrated on increasing real investment and thence growth. The country
saw the effects of its policies in that it was able to maintain 7% growth rates in the post-2009 period.
A negative consequence of China’s policies was mal-investment on a grand scale. The country is awash in
excess capacity in a variety of industries, it has constructed numerous ghost cities and it is increasingly being
faced with a huge bad loan problem as many of these projects are unable to generate the cash necessary for
debt service. A second problem was that the investment boom resulted in labor market tightness across China,
increasing wage pressures. Finally, the call on resources from excess investment and increasing wages has
also meant rising inflation in food, energy and other essentials. With deposit rates held well below the rate of
2013
DEC
inflation, Chinese consumers have had to contend with negative real rates prompting greater speculation in
real estate and other questionable products such as investment trusts that promise positive real rates of return.
UPDATE
The main beneficiaries in the Chinese credit boom since 2009 have been the local governments and the
political elites who control the production processes. The real estate boom has allowed local governments to
benefit from the transaction taxes levied on housing transactions – a bust in this market will mean a significant
worsening of their fiscal positions. The managers of the large enterprises, most of whom are politically
connected, have been given the benefit of virtually unlimited cheap credit which has masked poor profitability
and allowed them to retain their positions. These two groups are very much in favor of the status quo in China.
The primary losers in China have been the public at large who have seen their wages rise at rates much lower
than inflation and are increasingly being priced out of housing, healthcare, and a variety of other essentials.
The Chinese central government sees the need to control inflation as does the People’s Bank of China
(PBOC), the central bank. However, achieving such control and placating the public will mean a dramatic
reduction in credit extension, something that will hit the local governments particularly hard possibly forcing
some of them into bankruptcy. Chinese policy accordingly has evolved in fits and starts through much of
2013. The PBOC has repeatedly tried to rein in credit forcing short-term rates up dramatically at times, only
to relent at the behest of the affected elites and no doubt also to prevent the dramatic slowdown in growth that
must inevitably follow. The central government has repeatedly stressed the need for a change in its policies
to rein in inflation and move to a more sustainable model of growth. We have no doubt that it is serious in
its intentions. Yet, its actions to that end have so far been rather tentative. We believe during 2014 that it will
become increasingly willing to take more decisive action.
The urgency for a change in China’s growth model cannot be understated. Even the limited tightening
of credit that has so far been engendered has resulted in an increase in bad loans and bankruptcies among
the firms in the lightly regulated shadow banking system. Since most of the speculation in real estate today
is being conducted with the help of trust products and other questionable financial instruments, a loss in
confidence in this arena could well lead to a prolonged bust in real estate resulting in a spiral of bad loans in
the banking system, corporate and local government bankruptcies, and significant knock-on effects on growth.
The central government could mitigate the worst of these effects with limited bailouts and a big consumeroriented tax cut, but that would mean a true adjustment of the country’s growth model – something that has
appeared tantalizingly close over the last few months, but has not yet occurred. Such an adjustment will mean
a dramatic increase in the country’s deficits, both to support a tax cut and at the same time engineer a massive
financial system bailout. The time is fast approaching when China is going to have to pay its own piper. The
sooner it takes action, the more likely that it can achieve a stable transition of its growth model.
The situation in China does not bode well for its growth in 2014. The government in China can generate
7%+ growth only with further credit extension – something that it seems unwilling to do. Reorienting growth
away from credit-financed investment and towards consumption may be possible with a huge tax cut or other
similar policies, but the transition is nevertheless going to prove difficult since investment is over 50% of GDP,
and consumption a scant 34%. If China were able to generate 3-4% growth during this transition, it would
be something of a miracle. Observers who think 7% growth in China is somehow “normal” are simply not
facing up to the facts. With slower growth, what is unfortunately almost certain is several bankruptcies in the
corporate sector and the attendant build up of bad loans in the financial system that will ultimately require
some capital injection from the government.
2013
DEC
3. The Coming Upheaval in Europe
UPDATE
The situation in Europe is much more perverse than that in either the U.S. or China. A number of the peripheral
Eurozone sovereigns are undeniably bankrupt when one considers the amount of debt they are carrying. Were
these losses on debt recognized by the region’s banking system, it would be insolvent. The European Union (EU)
politicians and the incompetent financial leadership in Europe were largely to blame for the current problems
the region faces. Since 2010, these two groups have forged an uneasy alliance to deny the problem with huge
transfers from the more prosperous countries in the region such as Germany to problem areas such as Greece.
With such aid has come a requirement for austerity in the recipient countries. Unfortunately, this dynamic has
just meant that private sector investment in the problem countries is unlikely to pick up dramatically even as the
need for austerity limits the governments’ ability to boost growth with fiscal measures. With the problem countries
already struggling with high levels of unemployment, the consumer is unlikely to be a source for growth.
The only growth possibility in the near term for the problem EU nations is through trade. However, rigidities in
the labor markets of these countries has limited their ability to become competitive even though unemployment
is high and shows little signs of declining. Slow or no growth only exacerbates the problem of unemployment and
the existence of government stabilizers such as unemployment insurance; and it also means a steady worsening
of the fiscal situations of the problem countries. Without structural reform there cannot be growth, but without
growth there has to be more austerity which in turn impacts growth even more negatively.
The policies followed in Europe are almost certain to result in more political instability going forward.
The elites who benefit from current EU policies are the leaders of the countries themselves and the top
management of the financial and corporate sectors. Current policies allow these elites to stay in power despite
their demonstrated incompetence and for the banks to retain their influence despite their insolvent status.
However, the benefits to this small coterie come at considerable cost to the vast majority of Europeans.
Citizens of the wealthier EU countries like Germany are locked into an increasing spiral of unrepayable aid
to problem countries such as Greece. The problem nations have it even worse as they are caught in a death
spiral of increasing debt levels, greater austerity (more accurately, poverty) and ineffective governments. Any
new leadership that can get elected and reasonably divorce itself totally from the existing governments will
demand more radical solutions. We believe that Greece, Portugal, Spain, and Italy all have the potential for
such political upheaval in 2014.
In Greece, the policies of austerity have reached their limits. The current government is operating with a
razor-thin majority in Parliament and any additional austerity will almost certainly mean its demise. The
Radical Left Party, Syriza, is emerging as the most popular alternative party to the current leadership. A viable
policy choice for a Syriza government would be to demand massive writedowns of Greek debt absent which
Greece could use its EU vote to stymie any joint action by the union. Such a move is likely to be supported
by the other problem countries in the region and could well precipitate an EU crisis that will finally result
in policy priorities aligned more closely with the economic welfare of the populations rather than the elites.
The government in Spain, while superficially still relatively strong, is likely to face increasing deficits and
pressure from EU authorities, even as restive regions in Spain militate for greater autonomy. Catalonia is likely
to vote on independence later in 2014, an act that could easily trigger a constitutional crisis in Spain, if not
the EU. The Portuguese government’s economic policies today are simply not working at all – the country is
in almost the same dire situation as is Greece. Unrest there is highly likely as well.
2013
DEC
UPDATE
With the backdrop in Europe, any growth resumption is likely to be minimal. Germany is undoubtedly in
decent health and as such can serve as a locomotive for EU growth. Yet, the effects of German growth will
be muted in the problem countries and certainly not enough to make their situations sustainable. A genuine
pickup in European growth, barring a radical economic and/or political adjustment is simply not in the cards.
What is perhaps most encouraging about Europe for the medium-term is that a radical political adjustment
may well occur in 2014. The disaffection of the people in the problem countries is increasing and can be
likened to dry tinder. A spark coming from a significant leadership change in one of the countries could
trigger a regional conflagration. The Euro-wide elections scheduled for May 2014 could prove such a catalyst
if large numbers of anti-Euro activists are elected into the European Parliament. Markets are likely to view
such an outcome very negatively, even though this might finally force the EU into a policy mix that will
finally address the ongoing crisis.
4. The Challenges in the Developing World
Finally turning to the emerging countries (for example, China) as a group, many of them today are also
facing political issues. Most emerging countries are grappling with high inflation thanks to huge foreign
inflows over the last several years due to QE and domestic credit bubbles. The recent concerns of Fed
tapering have resulted in currency weakness in many of them adding fuel to domestic inflation. Much of the
population in the developing world is seeing declining real wages due to inflation, even as the elites continue
to benefit from asset price increases. As a result, social unrest is a real problem in many developing countries
and the political leadership is well aware of the need for change.
Several developing countries have elections in 2014 that might result in significant changes to the status quo.
India should go to the polls early this year in what most observers would deem a critical election. The country
has seen a recent grassroots movement against corruption, something that is likely to be a dominant theme in
the elections. A political victory by anti-graft parties could well put India on the road to sustainable growth.
Equally likely however, is a hung Parliament which could result in even more political turmoil. Thailand
today is facing significant political unrest as well because of strong public desire to replace a government
that is run entirely by a group of rich cronies. Turkey is suffering through a government corruption crisis.
Venezuela has to deal with an inflationary crisis. And Argentina is dealing with a new currency crisis. Many of
the countries in the Middle East and Eastern Europe are also facing political turmoil. And conditions even in
relatively stable countries are getting worse because specific concerns about individual developing countries
are spilling over into a generalized investor exodus even from largely stable countries such as Brazil.
Many developing countries have always had political and economic issues to contend with. However, the
current environment forces them to deal with skittish foreign investors who seem to be voting with their feet
rather than their heads. The unfortunate result is that the fastest growing regions in the world will have to
institute policies that are inherently contractionary given the asset outflows. This only serves to exacerbate
the problem of weak global growth.
Conclusion
Markets today believe that 2014 will be a year where growth picks up significantly across the world and the crises
of the past few years can finally be put to rest. From our discussion above, it should be clear that we are not in
the same camp. We believe that global growth will be weak in 2014 and that political instability will increase
2013
DEC
UPDATE
significantly, especially in Europe. Despite these factors, we expect some paring back of aggressive monetary
policies because of political considerations. Paradoxically, while we expect the Fed to taper its asset purchases,
we believe that such tapering will be gradual and potentially even less than markets currently expect.
Markets have spent 2013 projecting a wonderful future. The data have not been entirely consistent with
such a rosy outlook, but participants have not been concerned about mundane issues such as the facts when
confronted with the almighty central banks that seem intent on imposing their hope for reality. Unfortunately,
we enter 2014 with much of the world’s middle and lower classes continuing to suffer weak growth and
high unemployment, even as high asset prices, courtesy of the central banks, enrich the elites. We believe
that the political environment for continued monetary extend-and-pretend policies is becoming increasingly
inhospitable. China may be moving to rein in its credit binge, Europe is facing numerous key political
challenges in 2014, and the Fed is starting to taper its asset purchases. Markets are on the high wire and the
safety net they are relying on may not exist much longer.
Performance Summary at December 31, 2013
Trident Global Opportunities Fund
1 Mth.
3 Mth.
6 Mth.
1 Yr.
2 Yr.
3 Yr.
5 Yr.
10 Yr.
YTD
Since Inception
(Feb. ‘01)
-0.5%
-0.8%
-4.1%
-2.1%
-1.3%
-0.3%
-1.9%
10.2%
-2.1%
8.6%
CI Global Opportunities Fund
1 Mth.
3 Mth.
6 Mth.
1 Yr.
3 Yr.
5 Yr.
10 Yr.
15 Yr. YTD
Since Inception
(Mar. ‘95)
-0.5%
-1.0%
-4.2%
-2.4%
-0.5%
-2.0%
9.6%
9.1%
-2.4%
15.4%
Nothing herein should be read to constitute an offer or solicitation by Trident Investment Management, LLC or its principal to provide investment
advisory services to any person or entity. This is not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of
units of the Trident Global Opportunities Fund are made pursuant to the Offering Memorandum only to those investors in jurisdictions of Canada
who meet certain eligibility or minimum purchase requirements. Important information about the Funds, including a statement of the Fund’s
fundamental investment objective, is contained in the Offering Memorandum. Obtain a copy of the Offering Memorandum and read it carefully
before making an investment decision. These Funds are for sophisticated investors only. ®CI Investments and the CI Investments design are
registered trademarks of CI Investments Inc.
2013
DEC