Monthly Commentary - Running To Year End

November 29, 2023

The Leatherback Long/Short Alternative Yield ETF (LBAY) (the “Fund”) net asset value (NAV) declined by 3.13% in October, compared to a decline of 2.10% for the S&P 500 Index. LBAY paid its thirty-fifth consecutive monthly distribution, at $0.075 per share in October. This is a 2.62% SEC yield versus the S&P 500 Index dividend yield of approximately 1.65%, and the 10-Year US Treasury yield of 4.932%. Year to date as of October 31, 2023, NAV for the Fund has declined 12.79%, compared to an advance of 10.69% for the S&P 500 Index. NAV performance for the Fund to date since inception (November 16, 2020) has produced a 36.34% cumulative total return and a 11.05% annualized total return.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (833) 417-0090. The gross expense ratio for the fund is 1.32%.

View LBAY standardized performance here.

The Fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the Fund was traded.




In recent weeks the US stock market has experienced a relentless rally. In October, we pointed out that many investors may have been bewildered to see short-term interest rates at elevated levels. Just last month we witnessed the 10-year US Treasury briefly touch a 5% yield. While the speed with which rates increased to those prints was impressive, we are again seeing sharp declines across the curve since peaking at 5%-handles. We would argue the US Federal Reserve Board keeping short term interest rates higher for longer has begrudgingly become accepted as market consensus. Despite this, the market reaction to individual data releases that could indicate interest rate cuts continues to surprise many. We have been intrigued by bond market responsiveness to specific economic number data points and wonder how many market players were expecting this level of volatility in fixed-income investments. Recent favorable Consumer Price Index (CPI) readings coupled with declining oil prices has appeared to cause investor risk appetites to return as inflation may be showing signs of quelling. Could this be another fear of missing out (FOMO) rally as the same handful of stocks continue to lead and hit new highs? This narrowly led market may have legs…what do you think?


In the past couple of weeks, the Wall Street Journal (WSJ) has been running multiple stories exposing allegations of a toxic workplace culture with a series of articles outlining improprieties, harassment, and discrimination at the Federal Deposit Insurance Corporation (FDIC). FDIC Chair Martin Gruenberg, who was nominated by President Joe Biden to serve as Chairman last year, is advancing a series of new bank capital rules, with the comment period closing in January 20243. The “Proposed Rules to Strengthen Capital Requirements for Large Banks” requires banks with $100B or more in total assets to “include unrealized gains and losses from certain securities in their capital ratios.4” If you recall, this was a fear that contributed to the collapse of Silicon Valley Bank and Signature Bank. Post the WSJ reporting, GOP lawmakers have been calling for Chairman Gruenberg to resign.

“As a result of these troubling reports and your apparent unwillingness to address them, I call for your resignation so a new chair can restore the professional culture at the FDIC that the American people expect from its institutions.”5 - John Kennedy, US Senator

A change of leadership could be significant as it may call into question the more stringent capital rules. Notably, the Vice Chairman of the FDIC, Travis Hill, voted against the regulatory capital proposals advanced by Chair Gruenberg4. If Chair Gruenberg were to resign, could Vice Chair Hill take over as Chairman, and would implementation of the rules be derailed? It will be interesting to see what more may be reported between now and January when the comment period draws to a close.


“There’s no such thing as a worry-free investment. The trick is to separate the valid worries from the idle worries, and then check the worries against the facts.” – Peter Lynch

We have noted in prior commentaries our bullish positioning in the healthcare sector; specifically, medical devices and related stocks. We thought it would be healthy to revisit how we view the current market set up. Notably, the Dow Jones US Select Medical Equipment Total Return Index fell by over 19% from the end of July 2023 through the end of October. Currently, the index has declined slightly over 10% from July as we write this piece. The buzz related to new glucagon-like peptide-1 (GLP-1) and related weight loss drugs that can be delivered via injection seems to have driven the decline. While the obesity medications are welcome and potentially positive for the manufacturers of these novel drugs, we think the selloff in medical device names is misguided and overdone. In Zimmer Biomet Holdings, Inc’s (ZBH) November earnings call, management argues that it’s a positive for orthopedics and ZBH specifically.

“So why could GLP-1s then be a tailwind for orthopedics? Three compelling reasons. First, if we can lower the patient's BMI below a certain threshold, 40 or 30 in some cases, these patients now become eligible for surgery. And all the data points that we're getting in primary markets like the US is that there is a large percentage of patients who today are not going through surgery because their BMI is too high. Secondly, if a patient does lose the weight and I would say this is pretty logical, and they do become more active, there would be a greater risk for additional joint procedures because there will be injury. And third, if a patient loses weight, they are likely to live longer, again, expanding the patient final for an orthopedic procedure. A great example of these factors is Japan, the second largest market in the world for osteoarthritis with minimum obesity rates, but very, very long life expectancy dynamics. We don't see any near-term impact from GLP-1s, and we've seen the long-term impact would be a positive one for orthopedics and Zimmer Biomet.” – Ivan Tornos, President and CEO, Zimmer Biomet Holdings, Inc. Q3 2023 Earnings Conference Call

We continue to maintain long positions in GE Healthcare Technologies Inc. (GEHC), Johnson & Johnson (JNJ), Medtronic, PLC (MDT), and Zimmer Biomet Holdings, Inc. (ZBH).

View LBAY top 10 holdings here. Holdings are subject to change. Characteristics and metrics of the companies shown are for the underlying securities in the fund’s portfolio and do not represent or predict the performance of the fund. There is no guarantee that a company will pay or continually increase its dividend.


We hope our investor partners enjoy our monthly perspectives. We are finding many compelling ideas both long and short and we look forward to continuing our dialogue in the weeks and months ahead.

Successful investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time.” – Warren Buffett

1 The S&P 500 Index includes 500 leading companies and covers approximately 80% of the available market capitalization. The S&P 500 Dividend Yield is the estimated sum of all dividends paid by the index’s stocks in the last 12 months, divided by the index market capitalization as reported by the S&P. The dividend yield does not represent or predict the performance of the Fund. Indexes are unmanaged and it is not possible to invest in an index.

2 The 30-day SEC yield is calculated from the 30 days ending on the last day of the previous month. This figure approximates the yield an investor would receive in a year, assuming that each bond in the portfolio is held until maturity. View the 30 day SEC yield here.

3 Source:, October 20, 2023

4 Source:, July 27, 2023

5 Source:, November 16, 2023

6 View LBAY top 10 holdings here. Holdings are subject to change. Characteristics and metrics of the companies shown are for the underlying securities in the fund’s portfolio and do not represent or predict the performance of the fund. There is no guarantee that a company will pay or continually increase its dividend.  The Dow Jones U.S. Select Medical Equipment Total Return Index measures manufacturers and distributors of medical devices such as MRI scanners, prosthetics, pacemakers, X-ray machines and other non-disposable medical devices. Indexes are unmanaged and it is not possible to invest in an index.Section Sources: Bloomberg

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.