Lysander-Triasima All Country Long/Short Equity Fund
Second Quarter Commentary

The economy

COVID-19’s influence on economic activity has become largely immaterial by now. Notwithstanding, some impact was recently felt in China due to their zero-COVID policy shutdowns.

Inflation rose further in advanced countries to levels unexpected to most observers. A key reason for the elevated inflation is the rise in household wealth over the past two years and the consequent surge on spending for goods. Other causes include the tight labour market and lingering supply chain disruptions.

Central bankers stayed the course too long with their easy monetary policies and now must catch up by aggressively raising short-term interest rates. Mid- and long-term rates also rose further in the quarter.

The war in Ukraine carries on, limiting supply and causing prices to rise for energy in Europe and for foodstuff at large.

Growth in most countries is slowing due to the inflation headwinds and declining real disposable income. Some advanced countries started showing signs of recession late this quarter.

The performance benchmark

The performance benchmark (the benchmark used to calculate the performance fee payable by the Fund) was up 1.1% this quarter. It is derived from the return of the FTSE Canada 91-Day Index, plus 3% per annum, with a floor of 4%.

The world equity market

The MSCI All Country World Equity Index (CAD) (MSCI ACWI)* is representative of the sectors to which the Fund has exposure. It is comprised of equity securities of large- and mid-cap companies from developed and emerging markets around the world. It fell 13.0%.

Weakness was broad-based with every sector posting a negative return. The main causes are high inflation and rising interest rates leading to valuation multiples compression. Falling profits are not a concern since earnings estimates for 2022 are still rising.

The worst-performing sectors were Information Technology (-19%) and Communication Services (-16%), due to higher rates reducing growth stocks valuations, and the cyclical Materials (-17%) and the Consumer Discretionary (-18%) sectors.

The best-performing sectors were Energy (-2%) as well as the defensive Utilities (-4%) and Consumer Staples (-3%) sectors.

Lysander-Triasima All Country Equity Fund (the “Fund”)

The Fund’s performance was dragged down in the second quarter by the freefall experienced by equity markets. Top contributors to absolute return were all Short positions, while Long positions fell.

To take advantage of the equity market downtrend, Shorts positions were maintained near their regulatory maximum of 50%, averaging 46% of Fund’s portfolio market value.

The Fund’s cyclical exposure was reduced in the quarter with weightings in the Energy and Materials resources sectors and the cyclical Financials sector all decreased. This was partially offset by purchases late in the quarter in the cyclical Industrials and Consumer Discretionary sectors, which were both net short. Conversely, the defensive and stable Consumer Staples and Health Care sectors were added to.


On the quantitative side, combining the Long and Short positions, the Fund’s portfolio has better parameters and factors exposure relative to the MSCI ACWI, with two exceptions. Profitability level is in line and revenue growth is lower.

The world equity market’s negative trend continued this quarter. Defensive factors such as dividends, value, and profitability outperformed the growth and volatility factors.

The fundamental background to world equities deteriorated further due to elevated inflation and rising interest rates. Slowing economies and lower expected corporate earnings point to poor outlooks in the short term and for 2022.

Lysander Funds Limited (“Lysander”) is the investment fund manager of Lysander-Triasima All Country Long/Short Equity Fund (the “Fund”). Triasima Portfolio Management Inc. (“Triasima”) is the portfolio manager of the Fund. This document was prepared by Triasima as portfolio manager of the Fund. In this document, “we”, “our” and “us” means Triasima. This document has been prepared solely for information purposes. Information in this document is not intended to constitute legal, tax, securities or investment advice and is made available on an "as is" basis. Neither Lysander nor Triasima make any warranty or representation regarding the information herein. Information in this document is subject to change without notice. Neither Lysander nor Triasima assume any duty to update any information herein.

The MSCI All Country World (CAD) Index represents performance of the full opportunity set of large and mid-cap stocks across 23 developed and 24 emerging markets.

The performance benchmark is derived from the return of the FTSE Canada 91-Day Index, plus 3% per annum, with a floor of 4%.

Certain information in this document has been derived or obtained from sources believed to be trustworthy and/or reliable. Neither Lysander nor Triasima assume responsibility for the accuracy, currency, reliability, or correctness of any such information.

Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

Lysander-Triasima All Country Long/Short Equity Fund is an alternative mutual fund. It has the ability to invest in asset classes or use investment strategies that are not permitted for other types of mutual funds. The specific strategies that differentiate this Fund from other types of mutual funds include: increased use of derivatives for non-hedging purposes; increased ability to sell securities short; and the ability to borrow cash to use for investment purposes. While these strategies will be used in accordance with the Fund’s investment objectives and strategies, during certain market conditions they may accelerate the pace at which your investment decreases in value.

This document may contain forward-looking statements. Statements concerning a Fund’s or entity’s objectives, goals, strategies, intentions, plans, beliefs, expectations, and estimates, and the business, operations, financial performance, and condition are forward looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “aims”, “may”, “will”, “would”, and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward- looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forwardlooking statements. While Lysander and Triasima consider these risks and uncertainties to be reasonable based on information currently available, they may prove to be incorrect.

Nothing in this document should be considered a recommendation to buy, sell or short a particular security. Any specific securities discussed are intended as an illustration of the portfolio manager’s security selection process. The portfolio manager may sell these securities at any time, or purchase securities that have previously been sold. The positions may increase or decrease in value after the date hereof, and the portfolio that hold such positions may accordingly gain or lose money on the investment. The statements by the portfolio manager in their commentaries are intended to illustrate their approach in managing the portfolio and should not be relied upon for any other purpose.

The source of all MSCI indices is MSCI. Neither MSCI nor any other party involved in or related to compiling, computing, or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability, or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing, or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

No further distribution or dissemination of the MSCI data is permitted without MSCI's express written consent.

Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced, or disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, noninfringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (

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