During December the Roubaix Fund Composite generated a net return of +3.04% relative to a total return of +3.63% for the HFRI Equity Hedge (Total) Index and +12.22% for the Russell 2000 Index.
For the full year, the Composite generated a net return of +15.21% relative to a total return of +10.44% for the HFRI Equity Hedge (Total) Index and +16.93% for the Russell 2000 Index. Average daily net exposure during December was 50.93% compared to 42.22% for the full year and 43.21% since inception in January 2010.
Q4 2023 hedge fund letters, conferences and more
The market rally broadened into the end of the year. All eleven sectors posted positive gains during December. Small caps outperformed large by more than 10%, but still finished the year lagging by more than 10%. Investor appetite for risk was aided by steady jobs data, resilient consumer spending into the holidays, and falling inflation. By year end, the large cap S&P 500 index finished within 1% of its all-time closing high, while the small cap Russell 2000 Index remained ~18% below its highs.
December long performance was driven by a meaningful portfolio shift back into healthcare and financials in the second half of 2023 as we took advantage of peak pessimism in those sectors. The short book faced headwinds in December as the sharp increase in small cap stocks was led by low quality factors. As we move into Q4 earnings season, we believe fundamental factors should once again drive individual stock performance, which has historically benefited performance.
Roubaix Composite 2023 Net Return +15.21%; 10.01% Annualized Net Return Since Jan2010 Inception
