361 Global Long/Short Equity Fund
With strong earnings and improving economic fundamentals around the globe, the MSCI World Index gained 1.48% in April, bringing the year-to-date return to 7.95%. From a volatility perspective, those stocks with lower predicted betas slightly outperformed their higher beta counterparts, but the strongest performers were those in the middle quintile, which gained about 2%. For the month, the institutional share class of the 361 Global Long/Short Equity Fund was up 0.18%. The Fund’s 70% net exposure cost about 43 basis points, given the strong equity market performance. Additionally, the beta profile of the Fund added about 9 basis points for the month, while the alpha models cost about 79 basis points, as the lowest predicted alpha stocks, which the Fund was short, gained 2.12%. From a sector perspective, the short Energy exposure was additive, contributing about 59 basis points to the Fund’s return. Year-to-date the Fund has returned 4.71%.
361 Domestic Long/Short Equity Fund
The U.S. equity market grinded higher on the outlook for corporate earnings, helping the Russell 1000 Index to a 1.06% gain for the month of April; the Index is up 7.15% YTD. High beta stocks greatly underperformed low beta stocks for the month, which helped the 361 Domestic Long/Short Equity fund to a gain of 2.56% (4.52% YTD). The Fund’s beta profile added about 41 basis points to performance. Additionally, stock selection relative to both the beta profile and the alpha model profile was quite strong. However, the cash position of about 30%, given the Fund’s relatively static net exposure of 70%, reduced the Fund’s return by about 31 basis points, and the alpha models also worked against the Fund, as those stocks with the lowest expected alphas (and which were shorted) gained over 2% for the month.