Image of the article author, Michael Paciotti

Russia/Ukraine Market Update - February 24th

Friends, so far the 2020's have, shall I say, left something to be desired. Personally, I prefer 2019, so can we have that back!?! Of course, I speak of the global pandemic of the past 2 years, inflation, and now conflict in Ukraine, with the latter two being more recently relevant.  

First, let me acknowledge the tragedy in Ukraine and hope for a swift restoration of peace. Living in fear, the loss of life, and the suffering of those people must be awful and our hearts go out to them. As I must, I will now address this from the perspective of doing my job as CIO for iCM. While conflict has spurred some volatility, especially today with Russian forces launching a broader incursion against Ukraine, the initial shock value to markets is typically worse than the long-term effects. The caveat, of course this is unless the conflict spreads more broadly, which, at this point, seems remote. The greater implication will likely be the impact on energy markets and the corresponding flow through effects that may further inflation. This is, in our expectation, the greater economic problem and one that our portfolios have been positioned to address.  

YTD our Equity Completion with Alts strategy is down just -2.14% gross of management fees (GOF) but net of the expense ratio vs the -11.16% decline for the S&P 500. Likewise, our equity completion ETF strategy is down -4.44%(GOF). Finally, our very popular TICE strategy has declined -7.09%(GOF), while TAO 80/20 is lower by -2.77%(GOF). All have provided a very defensive posture against this backdrop, given our focus on undervalued assets, which includes commodities. In the next few weeks, I suspect the dust will settle and a sense of calm will be restored. In the meantime, however, please keep longer-term objectives in mind and rest easy knowing that to-date our strategies are holding up exceptionally well. Thank you for your trust and confidence. 

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