Official Press Release: I/O Fund’s Cumulative Returns Double the Nasdaq Following a Tough 2022
March 30, 2023
Actively managed portfolio and research site announces its largest cumulative lead over institutional all-tech portfolios. The I/O Fund defies a challenging market, outperforming peers and providing innovative tools to level the playing field for retail investors.
I/O Fund, a tech research site that actively manages a real time portfolio, announces a cumulative return of 46.92% since inception versus the Nasdaq-100’s 18.65% return during the same time period.
Impressive Performance in a Challenging Year for Tech (and the Market as a Whole)
A few important highlights of the I/O Fund’s performance include:
- Cumulative return of 46.92% since inception, compared to the Nasdaq-100’s 18.65% return during the same time period
- More than doubled the Nasdaq since 2020 with an outperformance of 28.27%
- 2022 performance of (-38.8%), rivaling the Nasdaq-100 performance of (-32.9%)
- Relative outperformance in 2022 surpassing institutional all-tech portfolios by as much as 85%
- Since inception, the I/O Fund has a lead over institutional technology portfolios by as much as 174% including those who manage billions of assets under management (AuM)
Typically, in a risk-off environment, the indexes are known to protect investors to the downside. It also helps to gauge the overall cost of owning tech in a historic year for losses in the stock market. Meaning, even the most conservative tech investors lost (32.9%) in 2022, defined by those that hold their exposure to NDX through QQQ.
Notably, losses are geometric in nature, so a portfolio that is down (67%) has to go up 85% to catch up with our 2022 performance of (38.8%). Since inception, to catch up with the I/O Fund compared to other all-tech portfolios, you’d have to make up 174%.
Our 2022 relative outperformance followed an outperformance in 2021, with gains of 11.4% compared to many tech funds that were down (23%) or more. On a cumulative basis, we currently have the largest lead over Ark that we’ve ever had since inception.
Ark is not the only all-tech portfolio peer that we are outperforming on a cumulative basis. The portfolios listed below are managed by highly regarded portfolio managers, are reserved for high-wealth individuals only, and have billions of assets under management (AuM).
Pictured above: If you had invested $10,000 with the I/O Fund's picks versus other all-tech portfolios at inception, the difference would be a portfolio value of $14,692 with IOF versus $5,358 with institutional tech-focused portfolios. The difference in value is 174%.
You can read the official Business Wire press release here. A copy of the auditor’s engagement letter including verified procedures and the verified performance percentage is shared with I/O Fund customers in the paywall article “2022 Audited Returns.” To become a customer of the I/O Fund, learn more here.
How the I/O Fund was Able to Rival the Nasdaq During a Historic Bear Market for Tech
Our firm is well-known for carefully choosing allocations as an important risk management tool. Lead Tech Analyst, Beth Kindig, has over a decade of experience analyzing tech. Her deep dive research helped the firm build its highest allocations in the complex semiconductor industry, which was the best performing sector in tech in 2021 and 2022.
Kindig has made contrarian, bullish calls on Nvidia in her free newsletter. Her analysis led to the I/O Fund buying at the October low for a 35% gain by year end, which has turned into more than 140% gains. Year-to-date, Nvidia is the best performing S&P 500 stock on the market, and remains the I/O Fund’s top position. Notably, the firm takes gains throughout the year on their positions and issues real-time trade alerts to this effect.
“We stayed focused and pivoted to hedging in April which helped us stage a strong comeback. In addition to hedging, we built a defensive tech portfolio that included two of the tech industry’s leading stocks. We held these winners at some of our highest allocations in Q3 2022 with gains of 33% and 43% on our initial entries.” -Business Wire press release, Lead Tech Analyst, Beth Kindig
I/O Fund also owes its lead over other all-tech portfolios to technical analysis. Portfolio Manager, Knox Ridley, actively manages the portfolio in real-time, providing readers with weekly webinars and charts to show where the I/O Fund plans to buy and sell key positions.
Ridley is known for managing high-risk assets in 2022, such as Bitcoin, Nvidia, and Netflix, with a near-perfect track record. This led to outperformance during a historic selloff across tech stocks. Ridley issues real-time trade alerts to research subscribers for every stock entry and exit plus offers a pie chart of the portfolio’s allocations.
“Given that 2022 destroyed more wealth on record than any other time in modern history, beating the Nasdaq on a cumulative basis cannot be overstated. The far majority of our competitors cannot say the same. Our performance reflects our ability to outperform in any market condition,” said Portfolio Manager Knox Ridley.
Note: Knox Ridley holds weekly webinars that discusses the broad market and I/O Fund’s positions, including the positions the I/O Fund plans to trim, add, sell or buy. He also goes through details on the automated hedge weekly. Learn more here.
In April, the I/O Fund partnered with Vincent Duchaine of WealthUmbrella to develop an automated hedging signal. Duchaine is an A.I. and Machine Learning University Professor who worked with Ridley to create an automated risk-on/risk-off signal for retail investors. This marked an important turnaround for the I/O Fund as the team expanded their risk management tools during a critical year to stave off losses.
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Strategic Approach and Focus on Top-performing Stocks & Sectors
In 2022, we made a strategic shift by leveraging hedging strategies with exposure to top-performing sectors within the tech industry plus top performing stocks.
- The I/O Fund held a 30%+ allocation to semiconductors in 2022, which despite all odds, has been one of the top performing sectors in tech in 2021, 2022 and YTD 2023. Beth Kindig’s expertise in the tech industry helped the I/O Fund feel confident allocating 10% and even 15% positions in this complex sector over the past few years.
- As early as June last year, Beth shared bullish commentary on one of our most significant current portfolio holdings in the article “Netflix Stock Could Rally with Ad-Supported Content.” Since I/O Fund’s original entry, the stock was up 33% in 2022. The firm held up to a 9% allocation. We offered our free newsletter subscribers an in-depth analysis and investment rationale, enabling them to take advantage of this top performer in the second half of the year.
- As stated above, Kindig made contrarian, bullish calls on Nvidia in her free newsletter. Her analysis led to the I/O Fund buying at the October low for a 35% gain by year end, which turned into more than 140% gains total. This position and the others noted above helped the I/O Fund rival the Nasdaq’s performance in 2022.
Cutting-edge Analysis and Innovative Partnership Tools with a Focus on Hedging
The year 2022 marked an important turnaround for our firm as we gave up what I would call “retail idealism” which centers around the idea that holding a stock for a long period of time is retail’s only defense. This works during times of economic expansion, but this can go (horribly) wrong when a new, more challenging macro can change the outlook for any given company.
This year, we partnered with Vincent Duchaine of WealthUmbrella to develop an automated hedging strategy, which helped us successfully bridge the gap between human-driven actions and objective, emotionless machines. Ray Dalio calls this the “man and machine approach.”
With the automated hedging strategies, the I/O Fund was able to hedge up to 100% of our portfolio at times, focusing on playing defense rather than offense during last year’s market extremes. This hedge not only mitigated some of the most significant market drops after April but also set the stage for our relative outperformance towards the end of 2022.
As the market experienced a steep downtrend all year even into year's close, our portfolio manager Knox Ridley provided two long-term bullish scenarios, along with a detailed analysis of global market trends, divergences, and new market leadership. Knox also accurately predicted the August to September pullback and the October market bottom, helping investors make timely decisions in a demanding market environment. As the articles illustrate, Knox publicly navigated the broad market for free newsletter subscribers while reserving his real-time trade alerts for premium members.
A few of the biggest moves from the hedge in 2022 are detailed in the article “The Best of I/O Fund’s Newsletter in 2022” with more information including daily real-time trade alerts provided behind the paywall.
Commitment to Transparency and Accountability
At the heart of I/O Fund, we believe that transparency is key to our success. We keep our members in the loop with real-time trade alerts and audited performance reviews. This raises the bar on accountability as no other retail site goes to these lengths by offering an actively managed and transparent portfolio.
Over the past three years, the I/O Fund has invested over $130,000 into accountability and transparency for our Members. When we launched in July of 2019, for the first year or so, we used a forum hosted by Tribe for our trade alerts, but by January of 2021, we had migrated to SMS and email tools that are least likely to experience an outage for our real-time trade alerts. This costs us $40,000 per year.
In addition to this, we use an auditor from a large firm in San Francisco to mathematically review and verify the performance of our I/O Fund portfolio trading account and crypto account. The process is quite extensive and it takes up to four months to complete. This costs $4,500 per audit and we’ve completed four audits for a total of $18,000 spent on this process. Premium members can access the verified procedures, verified performance and engagement letter here.
I/O Fund Analyst, Beth Kindig, recently wrote “The Importance of Verified Returns and Risk Management for Retail” which identifies three key reasons retail tends to underperform professional investors. The I/O Fund has worked diligently and made sizable investments to empower retail by addressing these issues which include automation, risk management tools and being the only retail firm to offer a verified performance.
The I/O Fund Experiment: Empowering Retail Investors
The I/O Fund's mission is to help retail investors beat Wall Street in the competitive tech sector. Our experiment in providing institutional-level research and tools to retail investors has been successful since we launched in 2019. This includes beating our other all-tech portfolios in the tough years of 2021 and 2022.
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