june 30, 2020 · 6/30/2020 · 1. the neutral market position is set at 20% of the stock...

June 30, 2020

Prosperously navigating

unexpected events

with great skill and agility

2

AGENDA

Who We Are

Investment Methodology

Performance by sectors

Risk Management

Current Opportunity and Investment pipeline

Performance

Summary

3

DISCLAIMER: The information and opinions expressed herein are current as of this document date and Black Swan Dexteritas Inc. assumes no obligation to provide updates or

advise on further developments. Any reference should not be considered as investment advice or a recommendation to buy or sell nor should it be considered as any indication of the

portfolio of any Black Swan Dexteritas investment fund or how it will be invested. Commissions, trailing commissions, management fees and expenses may all be associated with fund

investments. Please read the prospectus before investing.

Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

WHO WE ARE

4

BLACK SWAN

DEXTERITAS

(“BSD”)

TECHNOLOGY EXPERTISE

• Unique insight

from entrepreneurs leading

international tech development

based on needs creation

• Advisory Committee of tech leaders

who determine the global adoption

and success of new technologies

• Representation in all BSD-invested

tech sectors and sub-sectors, for

unrivalled expertise

• Portfolio Manager with 30 years of

portfolio management experience

across various asset classes at

asset management companies (LGT,

TAL, CIBC Asset Management), and

a pension (British Petroleum)

• Exceptional research team with a

wide breadth of knowledge in

research, finance, and engineering

• Intense due diligence process for our

stock selection process

• Unique risk management overlay

to minimize drawdowns and volatility

PORTFOLIO MANAGEMENT

EXPERIENCE

5

INVESTMENT METHODOLOGY

SECTOR ASSESSMENT

• Life Cycle: Sectors in introduction and growth stages with

high Total Addressable Market (TAM)

• Competition: High barrier of entry with differentiated products

and services within the sector

COMPANY ANALYSIS

• Business Model: Public ccompanies with high recurring revenue,

easily able to leverage network effects, strong negotiating power

with suppliers and customers, and strong corporate governance

• Size: Target small (500M+) to large cap public companies with

established track record of executing the business.

• Growth: Public companies with high and/or consistent revenue

growth

• Valuation: Determine if opportunities exist based on our fair

value expectation of stocks versus current stock prices

PORTFOLIO CONSTRUCTION

• Weightings: Determine % of portfolio allocated to holdings

based on risk-reward expectations

• Diversification: Well-diversified across 35 to 40 holdings to

maximize risk-adjusted returns

• Hedging: Utilize derivatives and fixed income products to

minimize drawdowns and generate alpha

IDEATION

• BSD Investment Advisory Committee: seek out global

growth themes and trends to overweight and underweight

various subsectors

• Experienced investment team sourcing trade ideas and

discussing vital macro economical forces in play

• Draw on sector experiences from members of the committee and

discuss emerging technology from the private and public space

• Deep dive into industry verticals to identify beneficiaries in other

primary, secondary, and tertiary markets

PORTFOLIO CONSTRUCTION

IDEATION

SECTOR

ASSESSMENT

COMPANYANALYSIS

PUBLIC COMPANIES

TOP 10 STRATEGIC TECH TRENDS FOR 2020-2021

6

INVESTMENT METHODOLOGY DIVERSIFICATION

BSD seeks out high potential technology sectors with promising unit sales projections and revenue

projections and minimizes exposure to low potential sectors

PORTFOLIO BY MARKET CAP PORTFOLIO BY TECH SUBSECTOR

$5B to $10B

5.0%

Over $10B

91.0%

As of June 30, 2020

BSD is well-diversified across 10 technology subsectors

across 30 to 35 holdings with minimal correlation.

Under $5B

4.0%

7

1.99%

3.63%

3.69%

3.95%

4.05%

7.13%

8.90%

13.42%

13.79%

Consumer Electronics

Technology Real Estate

Automation

Cyber Security

Consumer Services

Fintech

Communication Equipment

Semiconductors

Internet Software

HEDGING OVERLAY

HEDGING STRATEGY

The goal of the hedging strategy is threefold:

1. Minimize the portfolio’s drawdown

2. Lessen the portfolio’s volatility

3. Generate alpha

HEDGING TACTICAL PROCESS

There are 3 tactical steps in the execution of the hedging process:

1. The neutral market position is set at 20% of the stock portfolio, ex-cash

2. The hedging position will deviate from the neutral market position to underweight or

overweight, based on macro fundamental, technical, and capital flow factors

3. The combination of various futures instruments ( for example, S&P 500 futures,

Nasdaq 100 futures, and Russell 2000 futures) is determined by a proprietary

hedging model

HEDGING P&L IMPACT

The hedging strategy is an “insurance” policy in anticipation of an adverse market event

The hedging tactical process limits drawdowns, and potentially generates alpha

RISK MANAGEMENT

8

-35.00%

-25.00%

-15.00%

-5.00%

5.00%

15.00%BSD Global Tech

S&P/TSX Composite

Blended Nasdaq/Russell 2000

When we see certain signs of market

deterioration, we increase our hedging

positions.

RISK MANAGEMENT

Our prudent risk management system allows us to navigate market corrections

and black swan events with lower drawdowns and higher returns

9

2020 CORRECTION

CASE STUDY

*BSD’s Global Technology Hedge Fund benchmark is a 50/50 Nasdaq/Russell and any references to other indices are made for information purposes only; including the S&P/TSX Composite Index (Canada’s primary exchange) which is the 9th largest stock exchange in the world, based on the market capitalization. It is the equivalent of the

S&P 500 market index in the USA. Since the S&P/TSX is comprised of Canada's largest and most prominent companies, it is often used as a barometer for the health of the Canadian economy. Used here, the S&P/TSX has two primary functions: to provide an easily understood snapshot of how Canada's public companies are performing, and

to provide a benchmark against which fund managers can compare their results to assess their success.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

• DIGITALIZATION & ELECTRIFICATION

The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD 1.5

Trillion market in 2030

• 5G DEPLOYMENT

The 5G market will grow to $1.23 Trillion by 2026, according to a new report by Ericsson announced at the

Mobile World Congress

• DIGITAL TWINS

The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023

• BIG DATA

Worldwide Big Data market revenues for software and services are projected to increase from $42 Billion in

2018 to $103B in 2027, attaining a CAGR of 10.48%.

• AUTOMATION & ROBOTIZATION

The global market for robots is expected to grow at a CAGR of around 26% to reach just under USD 210

Billion by 2025. It is predicted that this market will hit the USD 100 Billion mark in 2020.

• GAMING

Gaming market to grow at a CAGR of +11% toward 2021 to reach $180.1 Billion

10Source: Statista, Gartner, Ericson, Newzoo


DIGITALIZATION & ELECTRIFICATION

11

Entire industries are changing with and through digitalization, while car drivers are demanding even

more from their vehicles. In addition to vehicle dynamics and consumption, the perceived intelligence,

comfort, and convenience of the car also play a significant role.

We are convinced that electromobility in its many different forms will be an essential component of

future mobility.

The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD

1.5 trillion market in 2030.


5G

12

5G networks are the next generation of mobile internet connectivity, offering faster speeds and more

reliable connections on smartphones and other devices than ever before.

The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at

the Mobile World Congress

Verizon CEO: 5G is a lot closer than people think.


DIGITAL TWINS

13

A digital twin is a virtual representation of a physical object or system across its lifecycle, using real-

time data to enable understanding, learning and reasoning.

Digital twins integrate artificial intelligence, machine learning and software analytics with data to create

living digital simulation models that update and change as their physical counterparts change.

The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023.


BIG DATA

14

Data Analytics is the process of examining data sets in order to draw conclusions about the

information they contain, increasingly with the aid of specialized systems and software.

Worldwide Big Data market revenues for software and services are projected to increase from $42B in

2018 to $103B in 2027, attaining a CAGR of 10.48%.

Big Data applications and analytics is projected to grow from $5.3B in 2018 to $19.4B in 2026,

attaining a CAGR of 15.49%.


AUTOMATION & ROBOTIZATION

15

The term robotic automation or robotization refer to the automation of industrial and business

processes using robots, of various guises.

Manufacturing is undergoing its greatest transformation since the Industrial Revolution. A wave of

intelligent technologies is shaping a more connected, flexible and efficient factory floor—and redefining

the ecosystem of equipment providers in the process.

The global market for robots is expected to grow at a CAGR of around 26% to reach just under USD

210 Billion by 2025. It is predicted that this market will hit the USD 100 Billion mark in 2020.


GAMING

16

Modern personal computers owe many advancements and innovations to the game industry: sound

cards, graphics cards and 3D graphic accelerators, faster CPUs, and dedicated co-processors like

PhysX are a few of the more notable improvements.

As of 2017, games industry generated $108.4bn in revenues worldwide, and were the third-largest

segment in the U.S. entertainment market, behind broadcast and cable TV.

Gaming market to grow at a CAGR of +6.2% toward 2020 to reach $128.5 billion

PERFORMANCE

PERFORMANCE METRICS* FUND RETURNS

Nasdaq /

Russell 2000

Return Since Inception

YTD Return

60 Day Return

20 Day Return

Daily Standard Dev.

Sharpe Ratio

Sortino Ratio

Correlation

FUND

88.83%

22.07%

5.36%

1.10%

0.80

0.74

1.07

-

90.86%

-1.22%

37.02%

3.20%

1.26%

0.48

0.62

0.91

* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.

October 1, 2013 to June 30, 2020

17

GLOBAL TECH FUND MONTHLY PERFORMANCE SINCE INCEPTION

BSD has outperformed our portfolio benchmark with lower risks through active diversification across various subsectors

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Se

p-1

3

Dec-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-1

5

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-1

6

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-1

7

Jun

-17

Se

p-1

7

Dec-1

7

Ma

r-1

8

Jun

-18

Se

p-1

8

Dec-1

8

Ma

r-1

9

Jun

-19

Se

p-1

9

Dec-1

9

Ma

r-2

0

BSD Global Tech

Blended Nasdaq/Russell 2000

Jan

-2.08%

0.53%

-7.41%

4.97%

2.89%

7.09%

0.92%

Nasdaq / Russell 2000

9.60%

8.40%

-0.10%

13.95%

20.55%

-8.52%

30.10%

-1.22%

YTD

4.55%

10.69%

10.16%

-1.63%

24.49%

-10.01%

10.62%

22.07%

2013

2014

2015

2016

2017

2018

2019

2020

Feb

3.63%

5.39%

-2.78%

2.14%

0.63%

1.55%

5.08%

Mar

-2.07%

-0.16%

5.31%

2.99%

-0.06%

-0.91%

8.26%

Apr

-4.39%

2.98%

-0.02%

2.08%

-1.57%

1.86%

1.11%

May

2.38%

0.90%

2.33%

3.85%

4.11%

0.44%

2.89%

Jun

2.80%

-0.91%

-0.29%

-2.55%

-1.63%

0.70%

1.11%

Jul

2.21%

0.43%

3.66%

2.68%

0.63%

1.83%

Aug

3.53%

-6.67%

0.65%

2.12%

1.72%

-0.27%

Sep

-1.64%

-1.48%

1.63%

0.51%

-2.18%

-0.13%

Oct

1.32%

4.95%

9.68%

0.38%

3.41%

-7.70%

-1.43%

Nov

0.35%

2.89%

0.63%

-3.90%

0.11%

2.70%

0.52%

Dec

2.83%

-1.51%

-0.76%

-0.71%

-0.20%

-7.41%

-0.85%

18

HOW BSD COMPARES TO OTHER HEDGE FUNDS

HEDGE FUND STRATEGIES‘ RETURN BY YEAR*

PERFORMANCE

BSD Global Technology Hedge Fund

Absolute Return

Multi-Region

Equal Weighted Strategies

Relative Value Arbitrage

Macro/CTA

Fixed Income - Credit

Global Hedge Fund

Equity Hedge

North America

Emerging Markets Composite

Market Directional

Event Driven

10.69%

0.79%

1.72%

-0.49%

-3.14%

5.24%

-1.77%

-0.58%

1.42%

-4.13%

-7.83%

5.13%

-4.06%

Our outperformance relative to other funds are indicative of our core competency in

generating outsized returns and navigating a challenging market environment

* Hedge fund index data is provided by Hedge Fund Research Index (HFRI) as of February 2020.

10.16%

2.86%

-1.19%

-1.54%

-3.10%

-1.96%

-4.38%

-3.64%

-2.33%

-9.35%

-5.26%

-8.58%

-6.94%

-1.63%

0.31%

1.95%

3.78%

1.03%

-2.93%

4.97%

2.50%

0.10%

4.14%

-1.77%

9.86%

11.08%

24.99%

3.39%

5.29%

4.81%

3.80%

2.51%

3.87%

5.99%

9.98%

4.42%

8.77%

3.16%

6.48%

-10.02%

-0.49%

-5.90%

-5.35%

-1.17%

-3.25%

-2.55%

-6.72%

-9.42%

-7.62%

-7.55%

-12.54%

-11.68%

10.62%

4.37%

8.62%

5.33%

6.55%

4.84%

6.22%

8.62%

10.71%

4.55%

2.05%

6.77%

9.96%

73.37%

5.19%

4.01%

-1.26%

-1.99%

2.91%

-0.77%

-1.77%

-5.22%

-10.71%

-30.37%

-8.85%

-3.09%

2014 2015 2016 2017 2018 2019 TOTAL

19

SUMMARY

• We bring unique, proven strengths

• Principal with 30 years of portfolio management experience

• Dynamic stock selection methodology

• Disciplined risk management process

• Our expertise in technology is unparalleled

• Team consisting of seasoned entrepreneurs that have co-founded billion dollar companies

• Global networks of advisors and analysts examining tech vendors and tech end-users

• Significant out-performance in risk-adjusted returns

• The BSD Global Tech Hedge Fund returned 88.83% since inception versus our benchmark

(Nasdaq/Russell) return of 90.86%

• Exhibited only 83% of the benchmark volatility

• Hedging strategy acts as an “insurance policy” in anticipation of adverse market events,

by limiting drawdowns and often generating alpha

* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be

repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.

june 30, 2020 · 6/30/2020 · 1. the neutral market position is set at 20% of the stock...

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