Sonic’s All-Short Equity Fund seeks bearish exposure to individual stocks in the form of outright short positions and long put options, although other strategies such as spreads and naked call selling may be employed at the manager’s discretion.
Individual securities are selected based on our internal equity research and our proprietary equity model. Short positions in this portfolio are generally held for less than one year and is actively managed to ensure risk thresholds are not exceeded. This often results in short-term capital gains, high turnover, and higher than average commission rates.
Although Sonic strives for excellent performance in all market conditions, being a net short strategy, this fund is susceptible to significant underperformance to most equity indices in periods of substantial growth. In positive years in the overall market, this fund seeks returns in modest excess to the risk free rate, but may deliver substantially higher returns in bear markets.
Like many of Sonic’s strategies, this fund is intended to be a diversification tool for long-term or high net worth individuals as a way to hedge some of their personal long-equity portfolio.