Bayou City Capital July Update
Bayou City Capital returned an estimated +1.6% in July, raising YTD performance to +9.5%. July 2017 provided the lowest print for the VIX on record, when the metric hit 8.84 after an uneventful Fed decision late in the month. 2nd quarter corporate earnings have received favorable market reactions and unemployment is at multi-year lows. Though as we look back at 2017, July may resemble the nadir for the year's volatility. The Fed will soon begin a program of reducing its bond holdings, and a government debt-ceiling increase is necessary in September. Meanwhile, any sign of inflation acceleration gives the Fed perfect impetus to raise interest rates. Given the historically low level of premium embedded in S&P 500 option prices, the Fund will continue a slow-and-steady approach when targeting its monthly performance.