Dear Clients and Friends,
Entering the second month of war with Iran, much uncertainty remains about The Islamic Republic’s ability to continue its 47-year effort to dominate the Middle East, either directly as with its war with Iraq in the 1980s, or indirectly through its support of Hezbollah, Hamas, and the Houthis. Launching missiles and drones at its neighbors (and beyond), and effectively closing the Strait of Hormuz, Iran is testing the resolve of its opponents, especially the U.S. and Israel.
Global trade increased considerably after the end of the Cold War 35 years ago, helping economic growth—but more recently has been hindered by various contractions related to armed conflicts, such as in Ukraine and now Iran, and trade barriers erected by political leaders.1 These wars have also revealed the vulnerability of countries who pursued growing renewable energy sources intended to replace fossil fuels.2
The result, we expect, is a slowing of economic activity and growth. Financial markets provided strong returns from the lows of the 2008 financial crisis, reaching valuation levels similar to past market peaks.3 Current conflicts are understandably disquieting to investors.
Artificial Intelligence’s ability to increase productivity is difficult to quantify. However, prior to the most recent quarter, investors were willing to justify very high valuations for companies involved with enormous capital spending on infrastructure.4 Many of these companies have seen valuations recently reduced and remain at risk of further compression should the euphoria over AI’s potential economic impact diminish.
In constructing portfolios, we seek companies whose valuations are attractive and whose balance sheets are stronger than average. Over the next five years, this positioning should help us weather the current storms and beyond.
Sincerely,
Ric Dillon
CEO & CIO
*While the Russell 3000 index represents a broad-based equity index for comparison, under normal market conditions, the fund invests at least 80% of its assets in income producing securities, which may be a mix of equity and fixed income securities. The composition of the Fund and its returns may be more like the Fund’s secondary benchmark, a 50%50% blend between the Russell 3000 equity index and Bloomberg US Aggregate Bond index.
Mutual fund 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 redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Investors may obtain mutual fund performance data current to the most recent month-end by calling 833-399-1001.
The total expense ratio for the VELA Funds Class I is: Small Cap VESMX 1.09%; Large Cap Plus VELIX 1.02%; International VEITX 1.10%; Income Opportunities VIOIX 0.84%, Short Duration VESDX 0.64%.
Investors should carefully consider the investment objectives, risks, and charges and expenses of the fund before investing. The prospectus contains this and other information about the fund, and it should be read carefully before investing. Investors may obtain a copy of the prospectus by calling 833-399-1001.
Important Information:
Investing involves risk including the possible loss of principal. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The Russell 2000 Index is a small-cap stock market index of the smallest 2000 stocks in the Russell 3000 Index.
The Russell 1000 Index is an unmanaged market capitalization-weighted index comprised of the largest 1,000 companies by market capitalization in the Russell 3000 Index, which is comprised of the 3,000 largest U.S. companies by total market capitalization.
The MSCI World ex US Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries excluding the United States.
The Russell 3000 Index is a market-capitalization-weighted equity index. The index tracks the performance of the 3,000 largest U.S.-traded stocks, which collectively account for roughly 97% of all U.S.-incorporated equities. The secondary index for the fund is a blend of the Russell 3000 TR (50%) and The Bloomberg Aggregate Bond Index (50%). The Bloomberg Aggregate Bond Index broadly tracks the performance of the U.S. investment-grade bond market. The index is composed of investment-grade government and corporate bonds.
The Bloomberg 1-3 Year Government/Credit Bond Index is an unmanaged index that includes all medium and larger issues of U.S. government, investment grade corporate, and investment-grade international dollar-denominated bonds that have maturities of between 1 and 3 years and are publicly issued.
The Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States.
You cannot invest directly in an index.
The VELA Funds are distributed by Ultimus Fund Distributors, LLC. (Member FINRA). VELA Investment Management and Ultimus Fund Distributors are not affiliated.
VELA Investment Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
The views expressed are those of VELA Investment Management, LLC as of 04/02/2026 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice. Third-party information in this report has been obtained from sources believed to be accurate; however, VELA makes no guarantee as to the accuracy or completeness of the information.
The VELA International Fund invests in a diversified portfolio of non-U. S. equities from a broad market capitalization spectrum. The fund may invest in non-U.S. securities and U.S. securities of companies domiciled in non-U.S. countries that may experience more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. These companies may be subject to additional risks, including political and economic risks, civil conflicts and greater volatility, expropriation and nationalization risks, currency fluctuations, regulatory risk, higher transaction costs, delayed settlement, possible non-U. S. controls on investments, and less stringent investor protection and disclosure standards of U.S. market.
A complete list of holdings can be found at www.velafunds.com.
Intrinsic Value is a measure of what an asset is worth, arrived at by means of an objective calculation or financial model. Comparing a company’s estimated intrinsic value to current price can give investors an idea of whether the asset is undervalued or overvalued.
VELA Investment Management, LLC is a registered investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about VELA Investment Management, LLC, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, and/or Form CRS, which is available upon request.
Footnotes:
1World Trade Organization
2Wall Street Journal
3S&P Global
4Wall Street Journal
Dear Clients and Friends,
Entering the second month of war with Iran, much uncertainty remains about The Islamic Republic’s ability to continue its 47-year effort to dominate the Middle East, either directly as with its war with Iraq in the 1980s, or indirectly through its support of Hezbollah, Hamas, and the Houthis. Launching missiles and drones at its neighbors (and beyond), and effectively closing the Strait of Hormuz, Iran is testing the resolve of its opponents, especially the U.S. and Israel.
Global trade increased considerably after the end of the Cold War 35 years ago, helping economic growth—but more recently has been hindered by various contractions related to armed conflicts, such as in Ukraine and now Iran, and trade barriers erected by political leaders.1 These wars have also revealed the vulnerability of countries who pursued growing renewable energy sources intended to replace fossil fuels.2
The result, we expect, is a slowing of economic activity and growth. Financial markets provided strong returns from the lows of the 2008 financial crisis, reaching valuation levels similar to past market peaks.3 Current conflicts are understandably disquieting to investors.
Artificial Intelligence’s ability to increase productivity is difficult to quantify. However, prior to the most recent quarter, investors were willing to justify very high valuations for companies involved with enormous capital spending on infrastructure.4 Many of these companies have seen valuations recently reduced and remain at risk of further compression should the euphoria over AI’s potential economic impact diminish.
In constructing portfolios, we seek companies whose valuations are attractive and whose balance sheets are stronger than average. Over the next five years, this positioning should help us weather the current storms and beyond.
Sincerely,
Ric Dillon
CEO & CIO
*While the Russell 3000 index represents a broad-based equity index for comparison, under normal market conditions, the fund invests at least 80% of its assets in income producing securities, which may be a mix of equity and fixed income securities. The composition of the Fund and its returns may be more like the Fund’s secondary benchmark, a 50%50% blend between the Russell 3000 equity index and Bloomberg US Aggregate Bond index.
Mutual fund 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 redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Investors may obtain mutual fund performance data current to the most recent month-end by calling 833-399-1001.
The total expense ratio for the VELA Funds Class I is: Small Cap VESMX 1.09%; Large Cap Plus VELIX 1.02%; International VEITX 1.10%; Income Opportunities VIOIX 0.84%, Short Duration VESDX 0.64%.
Investors should carefully consider the investment objectives, risks, and charges and expenses of the fund before investing. The prospectus contains this and other information about the fund, and it should be read carefully before investing. Investors may obtain a copy of the prospectus by calling 833-399-1001.
Important Information:
Investing involves risk including the possible loss of principal. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The Russell 2000 Index is a small-cap stock market index of the smallest 2000 stocks in the Russell 3000 Index.
The Russell 1000 Index is an unmanaged market capitalization-weighted index comprised of the largest 1,000 companies by market capitalization in the Russell 3000 Index, which is comprised of the 3,000 largest U.S. companies by total market capitalization.
The MSCI World ex US Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries excluding the United States.
The Russell 3000 Index is a market-capitalization-weighted equity index. The index tracks the performance of the 3,000 largest U.S.-traded stocks, which collectively account for roughly 97% of all U.S.-incorporated equities. The secondary index for the fund is a blend of the Russell 3000 TR (50%) and The Bloomberg Aggregate Bond Index (50%). The Bloomberg Aggregate Bond Index broadly tracks the performance of the U.S. investment-grade bond market. The index is composed of investment-grade government and corporate bonds.
The Bloomberg 1-3 Year Government/Credit Bond Index is an unmanaged index that includes all medium and larger issues of U.S. government, investment grade corporate, and investment-grade international dollar-denominated bonds that have maturities of between 1 and 3 years and are publicly issued.
The Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States.
You cannot invest directly in an index.
The VELA Funds are distributed by Ultimus Fund Distributors, LLC. (Member FINRA). VELA Investment Management and Ultimus Fund Distributors are not affiliated.
VELA Investment Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
The views expressed are those of VELA Investment Management, LLC as of 04/02/2026 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice. Third-party information in this report has been obtained from sources believed to be accurate; however, VELA makes no guarantee as to the accuracy or completeness of the information.
The VELA International Fund invests in a diversified portfolio of non-U. S. equities from a broad market capitalization spectrum. The fund may invest in non-U.S. securities and U.S. securities of companies domiciled in non-U.S. countries that may experience more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. These companies may be subject to additional risks, including political and economic risks, civil conflicts and greater volatility, expropriation and nationalization risks, currency fluctuations, regulatory risk, higher transaction costs, delayed settlement, possible non-U. S. controls on investments, and less stringent investor protection and disclosure standards of U.S. market.
A complete list of holdings can be found at www.velafunds.com.
Intrinsic Value is a measure of what an asset is worth, arrived at by means of an objective calculation or financial model. Comparing a company’s estimated intrinsic value to current price can give investors an idea of whether the asset is undervalued or overvalued.
VELA Investment Management, LLC is a registered investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about VELA Investment Management, LLC, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, and/or Form CRS, which is available upon request.
Footnotes:
1World Trade Organization
2Wall Street Journal
3S&P Global
4Wall Street Journal
Author
Ric Dillon, CFA
Jun 16, 2020
Author
Ric Dillon is one of our firm’s founders and serves as Chief Executive Officer & Chief Investment Officer, as well as a Portfolio Manager on the Small Cap and Large Cap Plus strategies.
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