Welcome to HIT Capital’s 2014 end of year update.

The Fund continued to build on its strong 2013 performance by returning 13.58% in 2014; this puts the fund up 66.29% since inception. In 2014 the S&P 500 and the Equity Hedge Index returned 11.38%, and 3.66% respectively. HIT Capital outperformed the S&P 500 by 2.2% and the Hedge Fund Index by 9.92%.

The fund’s objective is to achieve superior after-tax returns relative to the market over the long term. The strategy is not simply to invest in the market but to outperform it. Due to the long term approach, the fund may be susceptible to short and intermediate term underperformance. That being said, HIT Capital has done well over the past two years, averaging a compounded annual growth rate of 29%. This CAGR ranks HIT Capital number 1 in the Long Biased Fund category and 24th out of 910 funds listed on the hedge fund database HedgeCo.

Looking at the bigger picture, only 18% of all managed equity funds outperformed the market from year 1998 to 2013.  Unfortunately for you, the investor, this means that it can be difficult to find fund managers that are worth their fees.  We believe the long term approach in combination with our strategies to gain a mathematical edge is what gives HIT Capital a competitive advantage over other equity investments.

The fund’s performance thus far has solely come through our primary and secondary strategies, beta slippage and contango. In 2015 the fund may employ a third strategy, value investing, in conjunction with beta slippage and contango. Our program to analyze domestic company fundamentals has been completed. We are currently optimizing the trading strategy to maximize after-tax returns. Once this is accomplished, the value investing strategy may begin to complement our primary and secondary strategies. This third strategy should still provide an advantage while also lowering volatility.