We are very pleased to report strong results at the close of the third quarter. With three months left in the year, all our main arbitrage strategies have all contributed to this success, helping us achieve a year-to-date return of approximately 10%. These results validate our cautious opportunistic approach in the face of an uncertain economic environment and challenging outlook for central bank monetary policy. On several occasions we’ve emphasized our commitment to protecting your capital, even if it means occasionally forgoing some returns. Today, we see how this prudent approach has served us well, and our performance provides objective proof of its value.
The months ahead also look promising. We expect continued market volatility, with the recent central bank interest rate cuts providing us with a strong tailwind. At the same time, we will be exercising caution, recognizing that equity market valuations are at historically high levels and a sharp correction could occur at any time, given the highly uncertain political and geopolitical climate.
Our Long-Term Strategies
These factors underscore strength and value of well hedged arbitrage strategies, in both the equity and debt markets, enabling the Amethyst Arbitrage Fund—which includes the Canadian Sovereign Bond Absolute Return Fund (SBAR)—to effectively fulfill its role in our clients' portfolios. Our objective is to generate investment returns of 5% to 10% above the short-term benchmark interest rate (i.e., federal government Treasury bills) while preserving capital and maintaining a very low correlation with traditional asset classes like equities and bonds - and all the while reducing volatility, of course.
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