Brummer Multi-Strategy monthly commentary December 2024
Brummer Multi-Strategy (BMS) USD and Brummer Multi-Strategy 2xL (Bermuda) USD posted an estimated return of 1.3 and 2.7 per cent respectively in December.
Markets
As 2024 came to a close, political turmoil across various regions dominated global news headlines. The fall of the Assad regime, martial law in South Korea, the killing of United Healthcare’s CEO, and the collapse of governments in Germany and France were among the most notable developments. Despite these geopolitical events, market dynamics remained primarily shaped by the lingering effects of the US presidential election. US equities initially saw strong gains, with indices such as the S&P 500 repeatedly setting record highs as President-elect Trump doubled down on his aggressive trade policies and as the US economy looked to outpace its global peers. However, this rally lost momentum after the Federal Reserve delivered a hawkish message following their 25bps rate cut, indicating a significantly lower pace of rate cuts in 2025. This shift sent large indices, particularly the industrial-heavy Dow Jones tumbling, ultimately ending the month on a negative note, save for the tech-driven Nasdaq 100.
Across the Atlantic, European markets mirrored US movements, with the broad European equity index Stoxx 600 ending the month on flat note. In Asia, equities diverged from the major western economies. Japanese stocks saw mixed performance throughout the month, only to end in a rally as a severely weakened yen was perceived as highly beneficial to Japanese exports. Meanwhile, Chinese equities saw a significant rally near the beginning of the month after the CCP signalled additional stimulus measures, only to taper off in the latter half of the month.
Inflationary pressures, driven by Trump’s proposed tariffs, strong macro data, and a hawkish Fed, pushed sovereign bond yields higher with the US 10-year for example reaching its highest level since late April of 2024.
In currency markets, the Japanese yen depreciated heavily against the US dollar, while the dollar itself saw modest gains against other major currencies mostly due to signs pointing towards higher US rates.
Brummer Multi-Strategy
December 2024 concluded the year on a positive note as solid returns were delivered across all strategy buckets.
In the long/short equity space, short alpha was a key driver of returns. In the US TMT space, short positioning in semiconductors, media/telco and software delivered solid gains, offsetting losses from long positions in real estate and financial services names. Among European financials, the positive performance was mainly attributable to positioning in the banking sector, as potential mergers across the continent created significant opportunities. Gains were also generated from positioning in the brokerage and insurance spaces. Within global healthcare sectors, performance ended roughly flat for the month as the positive contribution from the short book was entirely offset by the long book, mainly due to long positioning in pharmaceuticals and biotech.
In the systematic macro bucket, solid returns were driven by relative positioning in equity index futures, with gains primarily stemming from short positioning in the US, UK, and Australia. Total performance from the remaining asset classes was marginally positive.
Lastly, systematic trend-following strategies also contributed positively to the fund’s performance in December. In developed markets, profitable positioning in FX was partially offset by losses in fixed income and commodities. Positioning in alternative markets ended flat for the month as gains in FX and fixed income were offset by losses in equities, power and credit.
As of January 1st, BMS’s portfolio managers decided not to rebalance the risk in the portfolio in any significant way.
This is marketing communication. Read the fund's information memorandum and key investor document (KID) before making any definitive investment decisions.