Paragon Australian Long Short Fund – Monthly Update May 2024
The Fund returned +8.4% after fees in May. Global Indices were up: Nasdaq +6.3%, Russell +4.9%, Copper +5.8% and Gold +6.6%. Local Indices were slightly up: All Ords AI +0.9%, Small Ords AI 0%, Resources +0.5%. Spartan, Mitre and Aya (both Silver), and Bravo performed well for the Fund, partially offset by falls in Firefly and Nexgen.
After inflation crept higher earlier in the year, US CPI lowered in April. 1.5 US rate cuts are expected this year commencing from November. The Fed is also slowing QT – in effect providing more liquidity to markets. The US$ fell -1.5% and US 10yr bonds fell 18bps. Gold was up +1.8% and Silver broke 11-year highs up +15.7%. Falls occurred in Oil -7.1%, Uranium -1.3% and Lithium -5.5%. Lastly, Copper hit all-time highs intra-month before finishing unchanged.
With Copper, Gold and Silver prices breaking out, high-cost leverage and exploration equities continue to outperform. Resources equities are responding well cum-raise, post-raise and post-IPO – confirming inflows into the sector.
In this month’s update, we discuss Bravo and provide a brief update on the outlook for Silver.