We issued a press release yesterday in Business Wire with our full audited returns entitled “I/O Fund Catapults to 131% Cumulative Returns Due to Leading AI Allocation,” which you can find here.

The I/O Fund portfolio posted returns of 56.9% in 2023. If we were a hedge fund, our ranking would be #4 in the Wall Street’s Journal Winners’ Circle ranking of 1,191 funds. For those who don’t have access to the article since it’s behind a paywall, the average fund returned 19.7% in 2023 and the top three funds returned 65.2%, 59.1%, 57.2%, with the fourth returning 55.6%.

Source: Wall Street Journal

Our cumulative returns of 131% also exceeds other tech peers. When compared to the most popular tech ETF on the market, we are ahead by as much as 157%.

If you had invested $10,000 with the I/O Fund’s picks versus other all-tech portfolio at inception, the difference would be a portfolio value of $23,052 with IOF versus $8,982 with popular tech ETFs. The difference in value is 157%.

Our high allocation to AI of 45% in 2023 was timely as it allowed us to beat Wall Street to the explosive trend of AI. Nvidia was a strong call by our firm and was our largest position at the time of its knockout report. Most importantly, our track record places us as a front runner within this trend, and we are confident we will find additional winners. We exited the year with an AI allocation of 52%.

A Few Important Stats About our Performance:

• The I/O Fund’s cumulative returns of 131% outperformed the Nasdaq-100 by 49%
• The I/O Fund cumulative returns of 131% outperformed the S&P 500 by 68%.
• The I/O Fund’s cumulative returns since inception of 131% compared to popular tech ETFs at (-10%) with a relative outperformance of 141% in less than four years.
• Since inception, the I/O Fund has a lead over institutional technology portfolios by as much as 157%.
• Our 2023 returns of 56.9% would rank us as the #4 performing hedge fund in the United States, according to the Wall Street Journal.
• We had seven positions beat the Nasdaq-100. These positions were Nvidia +237%, Bitcoin +158%, Chainlink +168%, AMD +123%, Ethereum +92%, CrowdStrike 58%, and Microsoft 54.6%.
• In 2021-2022, we issued 9 buy alerts under $200 for Nvidia with the lowest at $108.51 on October 13, 2022 for gains of up to 775% in eighteen months.
• During the same time period, we issued 11 buy alerts on AMD under $110.

2023 Winning Positions Overview

Nvidia:

On average, a 15% allocation, which was our top position for most of 2022 and 2023. The returns for 2023 were 237% for 2023.

Bitcoin:

Once we confirmed a new uptrend in Bitcoin, we began to accumulate heavily throughout 2023. It is now one of our top 3 positions, and returned 158% in 2023.

Chainlink:

Chainlink has been a staple in our portfolio. It once held a 7% allocation in late 2020, and we reduced it to 2% in 2021. Now that we have a new confirmed bull cycle, we have been accumulating this alt coin in 2023. It returned 168% in 2023.

AMD:

AMD has been a top 3 position for most of 2022 – 2023. We heavily accumulated throughout most of 2023. The position was up 123% in 2023.

Ethereum:

Ethereum was up 92% in 2023 and has been a solid holding for us in 2024, so far.

CrowdStrike:

We began accumulating CrowdStrike in the $160 range. It returned 58% in 2023. We have since been taking significant gains in the $280 – $320 range, and it still remains a 6% position.

Microsoft:

Microsoft was up 54.6% in 2023. We began taking gains in 2023 and have continued into 2024. We plan to begin accumulate when the valuations become more favorable.

Performance Review:

Below is the engagement letter from the firm that reviews and verifies our performance. Our terms and conditions with the accounting firm state that this engagement letter is to only be shared with paying customers. For that reason, our performance letter resides behind our paywall. 

With that said, any paying customer can access the engagement letter which is posted on io-fund.com for this purpose. The I/O Fund owns the performance review and we do not authorize our customers or any person on our site to share a confidential engagement letter or performance review outside of our paywall. As the owner of the report, we will at times market our performance number outside of the paywall. The terms and conditions can be found here.

The I/O Fund Mission:

The I/O Fund began as an experiment to see if a team of retail investors can beat Wall Street. We are setting out to answer the million-dollar or billion-dollar question, which is how to safely participate in tech while limiting the downside. We do not believe this question has been truly answered. Hedge fund managers often pick one tech stock or a few tech stocks and place them alongside a diversified portfolio as a means of limiting the downside. However, tech is the world’s most valuable industry – no other industry offers you the opportunity for life-changing gains repeatedly, year after year. Therefore, diversifying away from tech certainly helps protect the downside but it greatly limits the upside, as well.

That leads to our mission, which is to offer an all-tech portfolio that participates in the upside yet aims to limit the downside. That’s how we hope to set our portfolio apart. Our comparison chart proves we are off to a great start in answering this problem.

When it comes to research sites, our edge is the accountability and transparency we offer. By tracking every trade in real-time, we are forced daily into instant accountability on every action we take. What results is rapid self-improvement, similar to athletes who track every mile they run, or every swing of the bat. By measuring every single daily action, our accountability has shot through the roof as has our drive to improve. 

Real-time trade alerts and an audited performance are extremely uncomfortable when you’re not performing well. However, it was this very thing that forced us to become better over the past four years. We made the case in our free newsletter that this is partly why retail performs so poorly. There are simply too few resources available that mirror what real money managers do. Transparency is integral to outperformance; money managers have to answer to their daily actions and this forces them to become better.

With that said, most professional money managers resemble what Knox does on the I/O Fund site, which is actively managing positions, with lots of activity, pivots and course corrections. This is the reality even if Retail is sold on the utopian idea that you can buy one stock and hold into eternity. In some cases, this is the correct thing to do, but it’s rare.

Risk Management:

What’s important to remember when viewing our returns is that Ark had strong returns in 2023, primarily due to Coinbase’s phenomenal performance of 400%+ which was their top position — yet our returns on a cumulative basis are 157% higher than Ark’s because of our emphasis on risk management. Retail investors are often hyper focused on the upside, which is a grave mistake because losses are geometric in nature. For example, if you are down 50%, you must go up 100% to break even. If you are down 80%, you have to go up 400% to breakeven. The impact is visible when you view our cumulative returns compared to others who had steeper losses in 2022. What separates smart money from retail is an emphasis on limiting the downside. 

Conclusion:

The I/O Fund's mission since inception is to help retail investors beat Wall Street in the competitive and complex tech sector. Our experiment in providing institutional-level research and tools to retail investors has been successful since we first launched in 2019. This includes having a cloud-focused portfolio in 2020, beating our other all-tech portfolios in the tough years of 2021 and 2022, and pivoting to a high AI allocation well ahead of 2023, which helped us triple our performance on a cumulative basis.

In the arena of investing, 2023 was a strong win for us. We easily rank in the top 90th percentile according to publicly available information on the annual returns and our cumulative returns. What I hope our members see when they review our performance is a team that has strived to deliver quality and value. The only way to truly beat Wall Street is by remaining humble while working hard at producing original analysis. The value of original analysis cannot be underestimated when working in an environment where ideas are recycled, an investment edge becomes quickly eroded, and competition is high. What we intend to deliver is the opposite, which is original and actionable analysis that helps our members get ahead of Wall Street.

We want to thank you for your business and your vote of confidence in our abilities. We love our jobs, and we are honored to tackle 2024 with you.