Propel(x) has introduced access to the Svelland Global Trading Fund (SGTF) — a commodities focused hedge fund run by Svelland Capital.
Why is this a big deal?
Access to these types of funds is usually pretty limited. An Initial minimum investment in the SGTF is $3 million.
But thanks to Planck Fund Management Corporation (a subsidiary of Propel(x)), qualified purchasers can get involved for as little as $25,000. Qualified purchasers can be a bit similar to accredited investors in terms of criteria, but they’re not the same.
This is achieved through Planck creating a syndicate that allows investors to pool funds to access investments with higher minimum investment thresholds.
You can find more information on The SGTF here. Keep in mind you need to register to the Propel(x) site first, in order to access the information.
The Svelland Global Trading Fund’s three-year CAGR (Oct 2019 to Oct 2022) is 45.15%
This vastly outperformed most indices, including the S&P 500, and the HFRX Global Hedge Fund Index, during the period. Since August 2017, the net value of invested assets (NAV) in the Svelland Global Trading Fund has grown 217.71%, net of fees (NAV calculated by Apex Group, a 3rd party Fund Administrator for SGTF).
Svelland’s investment process starts with understanding in detail the supply and demand dynamics of the “physical” commodity markets within their investment universe.
The fund’s typical investment holding period is highly changeable, from longer term strategic trades to more short term tactical. 2022 has been a “trading year” for the fund due to the market volatility.
The SGTF focuses on the commodities sector. The strategy trades across three buckets
1) Commodity futures and Options
2) Commodity & Renewable Related Equities and
3) Freight Futures.
At present, the Fund doesn’t trade coal or power.
It’s good to see that for 11+ years, the Dow Jones Commodities Index has shown a similar trend to the rise and fall of inflation. (But do keep in mind that past performance is no guarantee of future performance.)
Since 2017, the fund has only posted a negative annual return once – in 2018. This was a tough year for most investments — it was just the second time the S&P and Dow had a down year since 2008. The main driver for the SGTF drawdown towards the back end of the year was the volatility created by President Trump’s trade war on China and its focus on commodities, specifically the way he often communicated to the market via Twitter. Early 2019, there was a tragic dam collapse in Brazil (Brumandinho – Vale dam burst). This unexpected event created shocks in the commodity and shipping markets which adversely impacted Svelland’s positions.
Investors in the fund will incur a 1% annual management fee and a 5% annual performance fee when using Propel(x) to invest (via the Planck SPV).
This is on top of the Svelland Fund’s native fees which are 1.75% (management) and 20%(performance)
The combined overall fee structure 2.75% and 25% is comparable to what many hedge funds/alternative investment funds charge.
There is a three-month “soft-lock,” which will incur a 5% penalty if assets are liquidated prior. Otherwise, the Fund requires 30 days’ notice before an investment can be redeemed.
The first close of the SGTF investment opportunity is November 20th. So, if you’re interested, you may want to act fast.
This message is not an offer to sell or the solicitation of an offer to buy any security, which only can be made through official offering documents that contain important information about risks, fees and expenses. Private Placements are a high-risk investment. Private investments are highly illiquid and risky and are not suitable for all investors. Past Performance is not a guarantee of future performance. Performance figures stated above for SGTF are based on calculations of NAV from a third-party administrator, the Apex Group. Securities, when offered, are typically offered through Propel(x)’s affiliated regulated broker-dealer, Hubble Investments. The SGTF offering is done through Planck Fund Management Corporation, a subsidiary of Propel(x). Please see Issuer Specific Risks concerning SGTF here.
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