As at June 30, 2025
Multi-Strategy Commentary
01/
Within our Multi-Strategy portfolios, alternatives were the notable contributors in the first half of 2025, validating the importance of uncorrelated return streams within our 40/30/30 framework.
02/
We’ve reduced equity beta and increased fixed income exposure as markets grapple with volatility, valuation risk, and macro uncertainty.
03/
Despite commodity weakness, disciplined trend-based exposure and capital-efficient options helped preserve capital while retaining upside potential.
The first half of 2025 reinforced our conviction in the value of diversification within portfolio construction. Within our 40/30/30 framework—40% equities, 30% fixed income, and 30% alternatives—we remained cautious on traditional beta exposures and emphasized the importance of diversifiers to help mitigate volatility and manage uncertainty.
Persistent inflation risks and renewed trade tensions—particularly the market’s pricing of a potential Trump 2.0 policy regime—underscored our inflation-sensitive positioning. Meanwhile, increased correlation across asset classes and growing geopolitical uncertainty highlighted the need to avoid concentrated directional bets and rely instead on data-driven, flexible strategies that can dynamically adapt.
As we look ahead to the second half of 2025, our outlook tilts more defensively:
Equities: Maintain an underweight in North American developed market equities, down-shifting beta exposure, either directly through lowering long only equity exposure or rotating long-short equity allocations into market neutral allocations. We believe Emerging Markets show interesting opportunities with supportive monetary and fiscal policy conditions.
Fixed Income: An increase in allocation from underweight to neutral. The inflation impulse has moderated, and government bond yields have stabilized in a trading range. However, we are wary of the trend in supply of U.S. treasuries due to ongoing large deficits as well as the regime change in Japanese monetary policy away from Zero Interest Rate Policy (ZIRP), both of which will tend to put upward pressure on global government bond yields.
Alternatives: Continue to be our highest-conviction area. Diversifiers and inflation-oriented strategies remain overweight and is expected to benefit in navigating geopolitically volatile and policy-sensitive regimes.
We continue to emphasize alternatives as key diversifiers. Within our Inflation strategy, trend signals were relatively neutral in the first half of 2025, leading us to maintain portfolio exposure below long-term strategic targets. This caution served us well—our strategy was effective in mitigating downside participation during the commodity sell-off after President Trump announced a slew of reciprocal tariffs. We dialed down our portfolio exposure to help weather heightened volatility. We’ve implemented more capital-efficient upside exposure using options on liquid commodities like copper and oil — enhancing upside participation with limited capital at risk.
We have moved to underweight within equities with a focus to ex-North American markets. Beta exposure has been reduced, and we’ve tilted more heavily toward market neutral strategies that we believe are better positioned to benefit from heightened dispersion and lower market directionality.
Within fixed income, we began the year underweight due to inflation concerns and tight credit spreads. For second half of 2025, we’ve shifted to a more neutral position. With inflation momentum waning and rate volatility becoming a larger concern, we view high-quality active fixed income strategies are somewhat attractive for navigating interest rate risk. The tightening of credit spreads to very narrow ranges leave us wary of credit exposure.
Alternatives were again the most resilient component of the portfolio in first half of 2025, particularly diversifiers which focused on uncorrelated returns. Alpha strategies as well as Quantitative Factor strategies have both added value in first half of 2025. Our Inflation strategy has proved resilient in the face of the disinflationary trend in inflation data with Precious Metals being a large driver of performance.
Within our equities exposure, returns were generated from our preference for non-U.S. equities. The rotation into market-neutral strategies also helped reduce beta exposure during the initial reaction to tariff announcements.
As of June 30, 2025 (%) | 1M | 3M | 6M | 1YR | 3YR* | 5YR* | Since Inception* | Inception Date |
PICTON Balanced Fund (F) | 2.36 | 5.60 | 7.04 | 14.78 | 11.91 | 9.24 | 7.90 | (2015-10-29) |
PICTON Multi-Strategy Alternative Fund (F) | 1.84 | 3.12 | 6.79 | 10.85 | 7.21 | 7.41 | 5.71 | (2018-09-27) |
PICTON Inflation Opportunities Alternative Fund (F) | 1.54 | 0.71 | 2.19 | 5.67 | – | — | 5.49 | (2023-05-04) |
(*) Annualized performance.
Source: Picton Mahoney Asset Management
This material has been published by Picton Mahoney Asset Management (“PMAM”) as at July 14, 2025. It is provided as a general source of information, is subject to change without notification and should not be construed as investment advice. This material should not be relied upon for any investment decision and is not a recommendation, solicitation or offering of any security in any jurisdiction. The information contained in this material has been obtained from sources believed reliable, however, the accuracy and/or completeness of the information is not guaranteed by PMAM, nor does PMAM assume any responsibility or liability whatsoever. All investments involve risk and may lose value. This information is not intended to provide financial, investment, tax, legal or accounting advice specific to any person, and should not be relied upon in that regard. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
This material may contain “forward-looking information” that is not purely historical in nature. These forward-looking statements are based upon the reasonable beliefs of PMAM as of the date they are made. PMAM assumes no duty, and does not undertake, to update any forward-looking statement. Forward-looking statements are not guarantees of future performance, are subject to numerous assumptions and involve inherent risks and uncertainties about general economic factors which change over time. There is no guarantee that any forward-looking statements will come to pass. We caution you not to place undue reliance on these statements, as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made.
Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Alternative mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale.
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