A short 🧵and some fun GIFs at the end… Bravo to @justinaknope for cracking the explanation for Universa’s… dare I say fake returns. I had discussed this on @ritholtz MIB podcast but now we have confirmation: According to its January letter, an investor with 98% in the S&P 500… twitter.com/i/web/status/1…
2/ So, their 114% annual return calc is almost completely because a 60/40 plan gets to sell 38 of the 40, put 2 in Universa and then buy 38 more SPX. Here are a few problems with the logic: 1. That’s true for every tail fund - there’s nothing about Universa’s strategy that makes… twitter.com/i/web/status/1…
These are Universa’s actual returns. Note than since December 2008 they’re actually net DOWN with all of the return coming from the SPX vs bonds trick.