December capped a volatile and difficult trading year. DropShot returned -5.94% vs -2.48% for the BarclayHedge Balanced Index and -4.62% for ACWI. Both fixed income and equities again offered negative returns as investors were forced to abandon earlier hopes of the Fed softening its monetary policy. Intra-month volatility also remained high across the board with most asset classes having drawdowns of over 5%. DropShot’s equity underperformance was caused by positions in technology and software, with the Nasdaq finishing down 9% for the month. On the risk side, the fund maintained an average 0.71 equity market exposure and kept an average cash position of 21%.