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Commentary iMGP DBi Managed Futures Strategy ETF Fourth Quarter 2024 Commentary

During the quarter, the iMGP DBi Managed Futures Strategy ETF (DBMF) lost 3.88% at NAV and 4.01% at market price versus a loss of 3.06% for the Bloomberg US Aggregate Bond Index (“the Bloomberg Agg”) benchmark and a loss of 0.15% for the SG CTA Index secondary benchmark. For the full year, the Fund was up 7.18% at NAV and 7.25% at market price, compared to the benchmark’s 1.25% gain and the secondary benchmark’s 2.37% gain.

Performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Short term performance is not a good indication of the fund’s future performance and should not be the sole basis for investing in the fund. Performance data current to the most recent month end may be obtained by visiting www.imgpfunds.com. 

For standardized performance click here: https://imgpfunds.com/im-dbi-managed-futures-strategy-etf/

Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. 

Quarterly Review

U.S. stocks saw a significant sell-off after the Federal Reserve announced a 0.25% interest rate cut, accompanied by signals of a slower pace of easing in the coming year. Although the rate cut had been widely expected, investors were disappointed by the Fed’s forward guidance, which fell short of the more dovish stance and accelerated rate reductions they had hoped for to boost economic growth. The cautious outlook on future liquidity and growth prospects weighed on market sentiment, pushing stock prices lower.  Bonds also fell while the U.S. dollar rallied on the uncertainty of future rate cuts.

The first half of 2024 saw disinflation across the globe which helped to prompt global central bank easing.  However, as inflation stays stubborn, normalizing is not proving to be easy.  Continued AI excitement drove equities higher this year and may continue to broaden to other non-tech sectors in 2025.  However, with elevated equity valuations, asset allocators should consider uncorrelated alternatives to diversify portfolios and navigate potential volatility in the year ahead.

Performance and Positioning

The Fund declined -3.88% net over the fourth quarter. Over this quarter, the portfolio faced whipsaws across multiple asset classes. At the start of the quarter, the portfolio was significantly long bond duration, expecting yields to come down as the Federal Reserve (“the Fed”) continues to ease. However, inflation data proved that prices were stickier than economists expected and there was a repricing within both stocks and bonds. The portfolio de-risked but by the end of the quarter, the Fed revised their dot plots and markets took another dive. The volatility in both stocks and bonds detracted from performance. Commodities also took a periphery shock from the volatility in interest rates and also detracted from performance. Currencies were an accretive asset class as the dollar surged. Going into 2025, the portfolio is short the Euro versus the US dollar, long gold, net long stocks, and modestly short bonds.

Portfolio Characteristics

Net Asset Class Exposure (%)
US Equities26%
Commodities7%
International Developed Equities-1%
Emerging Market Equities-6%
Fixed Income -50%
Currencies-81%
Top 5 Holdings
Euro-84%
US 10 Yr Treasury-31%
S&P 500 26%
US 30 Yr Treasury-18%
Gold7%

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DISCLOSURE

The Fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 800-960-0188 or visiting www.partnerselectfunds.com. Read it carefully before investing.
iMGP DBi Managed Futures Strategy ETF Risks: Investing involves risk. Principal loss is possible.
The Fund should be considered highly leveraged and is suitable only for investors with high tolerance for investment risk. Futures contracts and forward contracts can be highly volatile, illiquid and difficult to value, and changes in the value of such instruments held directly or indirectly by the Fund may not correlate with the underlying instrument or reference assets, or the Fund’s other investments. Derivative instruments and futures contracts are subject to occasional rapid and substantial fluctuations. Taking a short position on a derivative instrument or security involves the risk of a theoretically unlimited increase in the value of the underlying instrument. Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities. Exposure to foreign currencies subjects the Fund to the risk that those currencies will change in value relative to the U.S. Dollar. By investing in the Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. Fixed income securities, or derivatives based on fixed income securities, are subject to credit risk and interest rate risk.
Diversification does not assure a profit nor protect against loss in a declining market.
iM Global Partner Fund Management, LLC has ultimate responsibility for the performance of the iMGP Funds due to its responsibility to oversee the funds’ investment managers and recommend their hiring, termination, and replacement.
The iMGP DBi Managed Futures Strategy ETF is distributed by ALPS Distributors, Inc. iMGP, DBi and ALPS are unaffiliated.