February 1, 2021

In the Frame – Issue 1, Investor updates
Managing Director

Frame Futures Fund – Jan 21

The Frame Futures Fund declined -0.84% in January 2021, leaving it up +20.02% for the previous 6 months to date. The core strategy contributed +0.09% to performance, whilst the trading strategy detracted -0.63%.

The fund held 44 investments at the conclusion of the month with our 3 largest investments being 2 Year US Treasury Note Futures, Japanese Yen Futures and S&P/ASX 200 Futures.

During the month, our investments in Equities, Currency and Fixed Income investments declined by -0.14%, -0.16% and -0.32% respectively. While Commodity investments rose +0.07%.

Global equity markets started the year strongly, however experienced aggressive selling into the last two days of the month. Market participants re-balanced portfolios as the GameStop saga unfolded. We describe the end of month selling as a Value at Risk (VaR) induced re-balance (as market volatility rises, fund managers adjust their positioning in line with the new level of market volatility), which we expect to be short lived.

The largest contributor to performance was Pan Asia Metals Limited (PAM.ASX), which we accumulated after their Initial Public Offering (IPO) last year. Pan Asia has a number of lithium deposits in South East Asia as well a large Tungsten project in New South Wales, which they are currently drilling. They were a beneficiary of strong investor inflow into the lithium and tungsten space near the start of the month. We also saw continued contribution from our investments in the rare earth and battery material space. Lynas Corporation, Syrah Resources, Galaxy Resources and Galileo Mining combined to contribute +1.46% to overall performance.

In terms of fund activity, we reduced exposure in our junior gold explorers, continued to add exposure to a selection of cannabis stocks as they continue their turn around, as well as actively traded the S&P/ASX 200 futures contract.