April in review

1/ There’s an old saying in investing: “Whenever the Fed hits the brakes, someone goes through the windshield.” In 2023, it's been the regional banks, with four banks going under since March. 

You may have seen that the FDIC just seized First Republic and sold all of its deposits to J.P. Morgan. Many have been quick to say that this move marks the end of the banking uncertainty, which frankly feels a bit oxymoronic to us. However, at least for now, it appears that depositors have faith in the banking system, and sometimes perception is as good as reality.

2/ Any fears around the banking system or a recession have been overshadowed by strong first-quarter earnings reports, with Big Tech stealing the show. Through the end of April, more than 50% of S&P 500 companies had reported last quarter’s results, and there’s a consistent theme throughout: business trends are better than feared. 

Apple, Amazon, Microsoft, and Google were collectively up an average of ~26% YTD through the end of April, and have benefitted from a flight to quality amidst the turmoil. These companies may not have the same pace of sales growth they once did, but they generate extraordinary amounts of free cash flow.

3/ Let’s not forget about Meta Platforms, too. Zuckerberg’s “Year of Efficiency” has the stock up more than 90% YTD–by far the biggest winner within our portfolios to start 2023. Although the business appears to be firing on all cylinders, we wouldn’t be surprised to see the stock take a healthy pause at these levels to digest such a large move.

4/ Outside of tech, much of the broader energy complex has cooled this year after a historically strong 2022. Oil prices are down close to 20% YTD, and while this helps the inflation situation, it's taken a toll on many energy companies’ stock prices. In our opinion, sentiment is far too bearish, creating a set-up that feels a bit like a coiled spring. 

5/ Nothing seems to break the consumer’s will to spend on everything from luxury goods to household essentials. Offshore holding LVMH made new all-time highs during the month, and companies such as Uber and L’Oreal were able to pass along higher prices with ease. All in all, if we were to grade earnings so far, we would give them a solid ‘B+.’

6/ Calls for a recession are old news; it’s quite clear that economic growth is slowing. Many economists are calling for “even odds” of a slight recession or modest growth. We’ll just have to see how it plays out.

7/ In terms of the other asset classes on Titan, Private Credit has really caught our attention as of late. Banks have signaled their plans to lend less, but companies still need capital to fuel operations. Enter: Apollo & Carlyle’s credit teams. Both Apollo and Carlyle’s credit funds have current distribution rates north of 9%¹. 

8/ Although the venture capital world feels quieter today, deals are still getting done. ARK recently invested in three new private investments: Anthropic, an AI company founded by the ex VP of Research at OpenAI, Mythical Games, a gaming platform that provides developers and publishers a suite of blockchain tools, and Axiom Space, a space infrastructure developer with goals to own and operate the first commercial space station. It’s refreshing to see entrepreneurs continue to receive the funding they need to build.

9/ Lastly, it was great to see the reception around the launch of Titan Treasury. It's clear that clients are looking for a safer place to park cash while earning a competitive yield. We believe Titan Treasury, yielding up to 4.64%², is just that.

10/ Keep an eye out this month for enhancements to our retirement experience on Titan – from the retirement analyzer report to automated IRA transfers and more. We’re going to be here for the long haul, and we hope you join us.

It’ll be Memorial Day weekend before we know it, and we hope you have a great month. As always, please let us know if you have any questions.

Best,

Clay Gardner

Co-CEO and Chief Investment Officer

Returns at a glance

In the table below, you can see how each strategy performed in April, year-to-date, and over the last 12-months where applicable.

Disclosures:

1. As of 3/31/2023.

2. As of 5/2/2023. This is the current 7-day SEC yield and is subject to change.

As of writing, AAPL, AMZN, MSFT, META, GOOG, and UBER are holdings in Titan Flagship. LVMH and LRLCY are holdings in Titan Offshore.

Anthropic is a 7.31% holding in the ARK Venture Fund. Mythical Games is a 3.48% holding in the ARK Venture Fund. Axiom Space is a 3.48% holding in the ARK Venture Fund.

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Various Registered Investment Company products (“Third Party Funds”) are offered by third-party fund families and investment companies on Titan’s platform as one of many potential investment options available to Titan’s clients, that may or may not be recommended based on an individual client’s investment objectives and risk tolerance. Please review the Third Party Fund’s prospectus in its entirety for a full list of risks associated with investing in the Third Party Fund before making any investment decision. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.

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Apollo Diversified Credit Fund

Carlyle Tactical Private Credit Fund

Ark Venture Fund

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